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 March 31,
2009





or





 ̈
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For 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  May 20, 2009 was 554,017 shares.









NORTHEAST
AUTOMOTIVE HOLDINGS, INC.




FORM
10-Q





March
31, 2009




TABLE
OF CONTENTS





PART
      I— FINANCIAL INFORMATIONItem
      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
      4T.
                Controls
      and Procedures
                15PART
      II— OTHER INFORMATIONItem
      1.
                Legal
      Proceedings
                16Item
      1A.
                Risk
      Factors
                16Item
      2.
                Unregistered
      Sales of Equity Securities and Use of Proceeds
                18Item
      3.
                Defaults
      Upon Senior Securities
                18Item
      4.
                Submission
      of Matters to a Vote of Security Holders
                18Item
      5.
                Other
      Information
                18Item
      6.
                Exhibits
                18SIGNATURES
                19


2





PART
1 - FINANCIAL INFORMATION





Item
1.  Financial Statements





The
financial statements of Northeast Automotive Holdings, Inc. (the "Company"),
included herein were prepared, without audit, pursuant to rules and regulations
of the Securities and Exchange Commission.  Because certain
information and notes normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States of
America were condensed or omitted pursuant to such rules and regulations, these
financial statements should be read in conjunction with the financial statements
and notes thereto included in the audited financial statements of the Company as
included in the Company's Form 10 -K for the year ended December 31,
2008.





NORTHEAST
AUTOMOTIVE HOLDINGS, INC.





CONSOLIDATED
BALANCE SHEETS




March
      31,
                        
                        
                        December
      31,2009
                        
                        
                        2008(unaudited)ASSETSCurrent
      Assets:Cash
                        
                        $
                        398,312
                        
                        
                        $
                        934,118Inventory
      (Note 4)
                        
                        
                        1,594,852
                        
                        
                        
                        1,485,247Accounts
      receivable
                        
                        
                        452,538
                        
                        
                        
                        421,909Total
      Current Assets
                        
                        
                        2,445,702
                        
                        
                        
                        2,841,275Equipment,
      net (Note 5)
                        
                        
                        20,336
                        
                        
                        
                        21,698Other
      assets (Note 6)
                        
                        
                        6,785
                        
                        
                        
                        8,479TOTAL
      ASSETS
                        
                        $
                        2,472,823
                        
                        
                        $
                        2,871,452LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      Liabilities:Accounts
      payable
                        
                        $
                        282,392
                        
                        
                        $
                        159,040Note
      payable to bank (Note 7)
                        
                        
                        100,000
                        
                        
                        
                        100,000Credit
      line (Note 7)
                        
                        
                        61,209
                        
                        
                        
                        198,006Demand
      loans payable (Note 7)
                        
                        
                        895,346
                        
                        
                        
                        904,246Credit
      Card loan payable (Note 7)
                        
                        
                        1,000
                        
                        
                        
                        -Due
      to stockholders (Note 7)
                        
                        
                        1,380,737
                        
                        
                        
                        1,746,269Accrued
      expenses
                        
                        
                        124,161
                        
                        
                        
                        133,946Payroll
      taxes withheld and accrued
                        
                        
                        4,331
                        
                        
                        
                        1,961Total
      Current Liabilities
                        
                        
                        2,849,176
                        
                        
                        
                        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 March 31, 2009 and December 31,
2008
                        
                        
                        554
                        
                        
                        
                        554Capital
      Stock to be issued (500,000 Shares)
                        
                        
                        20,000
                        
                        
                        
                        20,000Additional
      Paid in Capital
                        
                        
                        3,556,363
                        
                        
                        
                        3,556,363Deficit
                        
                        
                        (3,953,093
                        )
                        
                        
                        (3,948,756
                        )(375,176
                        )
                        
                        
                        (370,839
                        )Less:
      Treasury stock (200,000 common shares)
                        
                        
                        (1,176
                        )
                        
                        
                        (1,176
                        )Total
      Stockholders' Equity
                        
                        
                        (376,352
                        )
                        
                        
                        (372,015
                        )TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
                        
                        $
                        2,472,823
                        
                        
                        $
                        2,871,452




See
Notes to Financial Statements


3





NORTHEAST
AUTOMOTIVE HOLDINGS, INC.





CONSOLIDATED
STATEMENTS OF OPERATIONS





Three
                
                
                ThreeMonths
                
                
                MonthsEnded
                
                
                EndedMarch
      31,
                
                
                March
      31,2009
                
                
                2008(unaudited)
                
                
                (unaudited)Net
      sales
                
                $
                4,801,921
                
                
                $
                18,259,490Cost
      of sales
                
                
                4,490,821
                
                
                
                17,809,106Gross
      profit
                
                
                311,100
                
                
                
                450,384Operating
      expenses:Officers
      salaries
                
                
                79,756
                
                
                
                121,688Interest
      expense
                
                
                60,777
                
                
                
                89,698Selling,
      general and administrative
                
                
                170,655
                
                
                
                214,014Total
      operating expenses
                
                
                311,188
                
                
                
                425,400Profit
      (loss) from operations
                
                
                (88
                )
                
                
                24,984Interest
      income
                
                
                -
                
                
                
                -Income
      taxes
                
                
                4,250
                
                
                
                1,300Net
      profit (loss)
                
                $
                (4,338
                )
                
                $
                23,684Net
      loss per share basic and diluted
                
                $
                (0.01
                )
                
                $
                (0.03
                )Weighted
      average number of shares outstanding
                
                
                692,879
                
                
                
                887,285




See
Notes to Financial Statements


4





NORTHEAST
AUTOMOTIVE HOLDINGS, INC.





CONSOLIDATED
STATEMENTS OF CASH FLOWS





Three
      Months
                
                
                Three
      MonthsEnded
                
                
                EndedMarch
      31, 2009
                
                
                March
      31, 2008(unaudited)
                
                
                (unaudited)CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      profit
                
                $
                (4,338
                )
                
                $
                23,684Adjustments
      to reconcile net profit to net cash used by operating
      activities:Depreciation
      and amortization
                
                
                1,362
                
                
                
                851Changes
      in operating assets and liabilities:(Increase)
      decrease in accounts receivable
                
                
                (30,629
                )
                
                
                170,497(Increase)
      decrease in inventory
                
                
                (109,605
                )
                
                
                259,508(Increase)
      decrease in other assets
                
                
                1,694
                
                
                
                9,642Increase
      (decrease) in accounts payable
                
                
                123,352
                
                
                
                26,557Increase
      (decrease) in accrued expenses
                
                
                (9,785
                )
                
                
                (64,636
                )Increase
      (decrease) in payroll taxes
                
                
                2,370
                
                
                
                (137,911
                )Total
      adjustments
                
                
                (22,603
                )
                
                
                263,657CASH
      PROVIDED (USED) BY OPERATING ACTIVITIES
                
                
                (25,579
                )
                
                
                288,192CASH
      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
                
                
                468,792
                
                
                
                2,196,833Repayment
      of line of credit
                
                
                (605,589
                )
                
                
                (2,575,670
                )Proceeds
      of stockholders loans
                
                
                101,981
                
                
                
                246,293Repayment
      of stockholders loan
                
                
                (467,511
                )
                
                
                (19,685
                )Proceeds
      of demand loans
                
                
                -
                
                
                
                257,214Repayment
      of demand loans
                
                
                (8,900
                )
                
                
                (200,000
                )Proceeds/(Repayments)
      on credit card loan
                
                
                1,000
                
                
                
                19,855CASH
      PROVIDED (USED)BY FINANCING ACTIVITIES
                
                
                (510,227
                )
                
                
                (75,160
                )NET
      INCREASE (DECREASE) IN CASH
                
                
                (535,806
                )
                
                
                209,685CASHBeginning
      of year
                
                
                934,118
                
                
                
                328,658End
      of period
                
                $
                398,312
                
                
                $
                538,343SUPPLEMENTAL
      CASH FLOW INFORMATIONCash
      paid for:Income
      tax payments
                
                $
                4,250
                
                
                $
                -Interest
      payments
                
                $
                60,777
                
                
                $
                89,698








See
Notes to Financial Statements.


5


NORTHEAST
AUTOMOTIVE HOLDINGS, INC.





NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


(Amounts
and Disclosures at and for the Three Months Ended March 31, 2009 and 2008 are
unaudited)





NOTE
1 – ORGANIZATION AND NATURE OF BUSINESS





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.




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.


6


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.




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.


7


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.




Interim Financial
Information





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 March 31, 2009 are not necessarily indicative of
the operating results for the entire year.


8





NORTHEAST
AUTOMOTIVE HOLDINGS, INC.





NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


(Amounts
and Disclosures at and for the Three Months Ended March 31, 2009 and 2008 are
unaudited)





NOTE
3 – ACCOUNTS RECEIVABLE





March
      31,
                
                
                December
      31,2009
                
                
                2008Accounts
      receivable
                
                $
                452,538
                
                
                $
                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:
                
                March
      31,
                
                
                December
      31,2009
                
                
                2008Automobiles
      purchased for resale
                
                $
                1,594,852
                
                
                $
                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:
                
                March
      31,
                
                
                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
                
                
                (19,428
                )
                
                
                (18,066
                )$
                20,336
                
                
                $
                21,698





NOTE
6 – OTHER ASSETS





Other
      assets consists of the following:
                
                March
      31,
                
                
                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 Three Months Ended March 31, 2009 and 2008 are
unaudited)





NOTE
7 – NOTES AND LOANS PAYABLE





March
      31,
                  
                  
                  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.
                  
                  $
                  61,209
                  
                  
                  $
                  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.
                  
                  
                  100,000
                  
                  
                  
                  100,0009%
      unsecured demand notes payable. Interest is payable
    monthly.
                  
                  
                  795,346
                  
                  
                  
                  804,246Credit
      cards payable - Credit cards payable are unsecured, pay interest from
      4.99% to 13.25% per annum and are payable in monthly installments. The
      average rate is 9.36%.
                  
                  
                  1,000
                  
                  
                  
                  -Due
      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.
                  
                  
                  1,380,737
                  
                  
                  
                  1,846,269$
                  1,057,555
                  
                  
                  $
                  1,202,252


10





NOTE
8 – RELATED PARTY TRANSACTIONS





None





NOTE
9 – INCOME (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.





NOTE
10 – OFF BALANCE SHEET RISK





Included
in the accompanying balance sheet is inventory of used automobiles at a carrying
value of $1,594,852 as of March 31, 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.





NOTE
11- SUBSEQUENT EVENTS





DEBT
EXCHANGE





On April
22, 2008 a Debt Exchange Agreement (“Agreement”) was entered into between
Northeast Automotive Holdings, Inc. (the “Company” or “NEAH”) and William Solko
(the “Holder”). The Agreement calls for the Holder to waive, release, forgive
and cancel a portion of the debt in the amount of $100,000 owed to the Holder by
the Company. In addition, in consideration for this Agreement, the Holder hereby
agrees to cancel 10,000,000 of the Holders’ 15,000,000 Common
Shares.




In
exchange and in consideration for the cancellation of the 10,000,000 Common
Shares and forgiveness of the $100,000 of Debt, NEAH will issue to the Holder
10,000,000 shares of Series A Convertible Preferred Stock (“Series A
Preferred”).




Each
share of the Series A Preferred carries with it (i) voting rights equal to 30
times the number of Common Stock votes, (ii) no dividends, (iii) liquidation
preference equal to eight times the sum available for distribution to Common
Stock holders, (iv) automatically convert after three years to one (1) common
share, (v) not be subject to reverse stock splits and other changes to the
common stock capital of the Company, and (vi) convertible at the option of the
holder after forty-five (45) days.





STOCK
SPLIT





The Board
of Directors and Shareholders have voted and approved a 1-for-30 reverse share
split (the “Reverse Stock Split”) of the common stock of the Corporation, $0.001
par value per share (the “Common Stock”).


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
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.




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.




13




For
the Three Months Ended March 31, 2009 and March 31, 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 three month periods ended March 31, 2009 and March 31, 2008.





Three Months ended March
                              31,2009
                            
                            
                            2008Percentage
      of net revenues:Net
      revenues
                            
                            
                            100
                            %
                            
                            
                            100
                            %Cost
      of revenues
                            
                            
                            93.5
                            %
                            
                            
                            97.5
                            %Gross
      profit
                            
                            
                            6.5
                            %
                            
                            
                            2.5
                            %Sales,
      general and administrative expenses
                            
                            
                            3.6
                            %
                            
                            
                            1.2
                            %Other
      operating expenses
                            
                            
                            2.9
                            %
                            
                            
                            1.2
                            %Total
      operating expenses
                            
                            
                            6.5
                            %
                            
                            
                            2.4
                            %Profit
      (loss) from operations
                            
                            
                            (0.0
                            )%
                            
                            
                            0.1
                            %





Revenues


Revenue
for the three month period ended March 31, 2009 were $4,801,921 a decrease of
$13,457,569 or 73.7% as compared to revenues for the three month period ended
March 31, 2008 of $18,259,490. The decrease in revenue was a result of a
decrease in the number of vehicles we sold in the three month period in 2009
over 2008. Specifically, in the three month period ended March 31, 2009 we sold
367 vehicles at an average sales price of $13,084 as compared to 1,215 vehicles
at an average sales price of $15,028 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 $4,490,821 or 93.5% of net revenues during the
three month period ended March 31, 2009 as compared to $17,809,106 or 97.5% for
the comparable period in 2008, a decrease of $13,318,285 or 74.8%. Thus, our
gross margin was 6.5% for the three month period ended March 31, 2009 as
compared to 2.5% 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 three month period ended March 31, 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 $170,655 for the three month period
ended March 31, 2009 or 3.6% of net revenue as compared to $214,014 or 1.2% of
net revenue for the comparable period in 2008, a decrease in such expenses of
$43,359 or 2.4% The decrease in the ratio of SGA expenses to net revenue was
primarily due to a decrease in operating expenses.


14





Other
Expenses


Our
combined expenses for officers salaries and interest was $140,533 for the three
month period ended March 31, 2009or 2.9% of net revenue compared to the
comparable period in 2008 when such expenses were $211,386 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.





Three Month
                  Period Ended
                  March
                  31, 2009
                
                
                Three Month
                  Period Ended
                  March 31,
                  2008
                
                
                Change
                
                
                Percent ChangeOfficers
      Salaries
                
                $
                79,756
                
                
                $
                121,688
                
                
                $
                (41,932
                )
                
                
                (34.5
                )
      %Interest
      Expense
                
                $
                60,777
                
                
                $
                89,698
                
                
                $
                (28,921
                )
                
                
                (32.2
                )%





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 March 31, 2009 was
($4,338) or (0.1)% of net revenue as compared to an operating gain of $23,684 or
0.1% of net revenue for comparable period in 2008, an decrease of ($28,022).
This increase in operating (loss) was primarily as a result of a decrease in
gross revenues which was greater than the decrease of operating
expense.





ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





As of
March 31, 2009, we had cash and cash equivalents of $398,312 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 March 31, 2009,
we had an outstanding balance of $61,209 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 March 31, 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%.





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 March 31, 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.




15




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





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.


16


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.





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 contain
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.


17


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, William Solko, 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.




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





None




ITEM 3. DEFAULTS
UPON SENIOR SECURITIES





None





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





None





ITEM
5. OTHER INFORMATION





None





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


18





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:
      May 20, 2009
                                      By:
                                      /s/
      William SolkoWilliam
      Solko, Chief ExecutiveOfficer
      and Chief Financial
Officer


19