UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
   FORM
10-K
  x
                  ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
  FOR
THE FISCAL YEAR ENDED DECEMBER 31, 2007
 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 NO.:  000-52529
  MEZEY
HOWARTH RACING STABLES
 (EXACT
NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
   Nevada
                    7948
                    20-8623320(State
      or other jurisdiction of incorporation or organization)
                    (Primary
      Standard Industrial
                      Classification
      Code Number)
                    (IRS
      Employer Identification No.)
  1001 Ave Pico, Ste C-629, San Clemente,
      California 92673(Address
      of principal executive offices) (zip
code)
 (949) 429-4007(Registrant's telephone number, including area
      code)(949) 271-5730(Registrant's fax number, including area
      code)
   Securities
registered pursuant to Section 12(b) of the Act: Common Units representing
limited partner interests
  Title
      of Each Class
                  
                  Name
      of Each Exchange On Which RegisteredCommon
      Stock
                  
                  OTCBB
  Securities
registered pursuant to Section 12(g) of the Act: None
   Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. x
Yes  ̈
No
   Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.  ̈
Yes x
No
   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. x
Yes  ̈
No
   Indicate by check mark if disclosure of delinquent
filers pursuant to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.  ̈
   Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of “large accelerated filer,” “accelerated filer,” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (check one)
  Large Accelerated Filer      Accelerated
      Filer      ̈
      Non-Accelerated Filer  ̈    XXSmaller
      Reporting Company  ̈
                    (Do
      not check if 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 x
No
  As of
April 15, 2008, 36,613,458 common shares were outstanding.
   DOCUMENTS
INCORPORATED BY REFERENCE: None




PART
I
  FORWARD LOOKING STATEMENTS
AND ASSOCIATED RISKS
  This
prospectus contains certain forward-looking statements, including among others:
(i) the projected time for commencing operations; (ii) anticipated trends in our
financial condition and results of operations; (iii) our business strategy for
our plan of operations and (iv) our ability to distinguish ourselves from our
current and future competitors. These forward-looking statements are based
largely on our current expectations and are subject to a number of risks and
uncertainties. Actual results could differ materially from these forward-looking
statements. In addition to other risks described elsewhere in this “Risk
Factors” discussion, important factors to consider in evaluating such
forward-looking statements include (i) changes to external competitive market
factors or in our internal budgeting process which might impact trends in our
results of operations; (ii) anticipated working capital or other cash
requirements; (iii) changes in our business strategy or an inability to execute
our strategy due to unanticipated changes in the industry in which we will
operate; and (iv) various competitive factors that may prevent us from competing
successfully in the marketplace. In light of these risks and uncertainties, many
of which are described in greater detail elsewhere in this “Risk Factors”
discussion, there can be no assurance that the events predicted in
forward-looking statements contained in this prospectus will in fact transpire.
While these forward-looking statements, and any assumptions upon which they are
based, are made in good faith and reflect our current judgment regarding the
direction of our business, actual results will almost always vary, sometimes
materially, from any estimates, predictions, projections, assumptions or other
future performance suggested herein. Except as required by applicable law,
including the securities laws of the United States, we do not intend to update
any of the forward-looking statements to conform these statements to actual
results. The safe harbor for forward-looking statements provided in the Private
Securities Litigation Reform Act of 1995 does not apply to the offering made in
this prospectus
   ITEM
1. BUSINESS
   The
disclosures in this Item are qualified by the Risk Factors set forth in Item 1A
and the Section entitled “Contingency Information Concerning Forward-Looking
Statements” included in Item 7, Management’s Discussion and Analysis of
Financial Condition and Results of Operations in this report and any other
cautionary statements contained herein.




DESCRIPTION OF BUSINESS
  We were
organized as a business corporation under the laws of the State of Nevada on
February 27, 2007. On June 12, 2007, the Company changed its name to Mezey
Howarth Racing Stables, Inc.  The Company's business is the buying,
selling and racing thoroughbred race horses of every age from broodmares,
weanlings, and yearlings to racing age horses. The Company operates in four
different areas in the horse racing industry.  The four areas include: (1)
Claiming, (2) Racing allowance and stake level horses, and (3) breeding of
thoroughbreds.  Initially we are focusing on the claiming aspect of the
business model while we develop a barn of stake level horses and yearlings. The
Company's California Horse Racing Board license number is
293137.
  The
following is an inventory of the Company’s horses as of March 31, 2008:
  Name of Horse
    (1)
                  Type
                  Date
    Acquired
                  Interest
      OwnedDoblado
      (ARG)
                  Colt
      4 Yr
                  07/07
                  100%Sarah's
      Cool Dude
                  Filly 4
      Yr.
                  01/08
                  100%Forget
      You
                  Filly
      10 Yr
                  01/08
                  100%Valondra
                  Filly 3
      Yr.
                  06/07
                  35%Our
      Emblem Colt
                  Gelding
      2 Yr.
                  05/07
                  5%Angela's
      Rainbow
                  Filly
      3 Yr.
                  10/07
                  10%Ops
      Overload
                  Gelding
      6 yr.
                  10/07
                  10%The
      Emerald King
                  Gelding
      5 Yr.
                  10/07
                  25%Mahalo
      Maggie
                  Filly 2
      Yr.
                  02/08
                  50%
 (1) Mezey Howarth Racing Stables also has invested in two Partnerships
with Trans Atlantic Racing Stables. The Company holds a 10% interest in one
partnership and 1% in the other partnership.  Trans Atlantic is currently
searching for horses to fill these partnerships.
 Pods
  The
Company creates Pods of three horses.  Pods are either Running Pods or
Breeding Pods.  The Running Pods are horses that are currently running
and the levels are follows: (1) Horses $25,000 or greater, (2) Horses $50,000 or
greater and (3) Horses $50,000 or greater.   The Company uses the Pod
formula to ensure we have quality horses capable in competing in the higher
level races.  The Company cannot begin filling another Pod until the
previous Pod has been filed, except that one level of the next Pod may be filled
prior to the previous Pod being filled.   The Pods will be filled from
the Company's claiming, allowance and stake divisions.  The breeding Pods
are those that are used to bred horses and are not currently
running.   These Pods are broken down as follows:  (1) KY Bred
horse, (2) CA bred horse, and (3) yearling or 2-year old. The Company expects to
have 3 - 5 running Pods filled for 2008 and 2 - 4 breeding Pods filled by
the end of 2008.
  Claiming
 The
Company's Claiming activities consist of identifying horse in claiming races
that are more valuable, in the Company's opinion, then their respective claiming
price.  The factors leading to a horse being more valuable then its
claiming price may be it has been poorly trained to date, has run in the wrong
type of races or has dropped in class.  The Company acquires these horses
with the intention that the horses will be moved up in claiming class.  The
Company believes most of the horses acquired in this manner will be owned by the
Company for less than 12 months. A
claiming race is one in which all horses entered are eligible to be purchased by
a licensed owner or indirectly through a trainer for the specified claiming
price (see below for levels of claiming races).  For example, in a $32,000
Claiming all the horses are for sale for the purchase price of $32,000 plus
applicable taxes.  The procedure for a claiming race is as follows: 
the trainer puts a claim in for the horse prior to the race.  Immediately
upon the start of the race the horse is considered sold to the new owner,
however, the previous owner maintains any purse winnings from that race. If
two or more owners/trainers put a claim in on a horse, then a "shake" occurs to
determine who has purchased the horse.  A shake is when each claiming owner
is assigned a number.  Then a racing official draws a number at random and
the owner with corresponding number has purchased the
horse.
  The
intent behind claiming is to claim horses that are performing below the ability
or have been mismanaged by the current owners or
trainers.  Thereby, allowing the Company to move the horse up in class
and make a profit on the horse being claimed for an amount higher then the
Company paid.
  For
example, the Company acquired Blushing Bear Cat on July 22, 2007 through a
$20,000 Claiming Race.  There was three claims on the horse and the
Company won the shake and obtain title to the horse (which is done automatically
through the racing board).  The Company raced Blushing
Bear Cat August on 12, 2007 in a $25,000 claiming race.  Blushing
Bear Cat was claimed for $25,000 the Company earned $25,000 from the
claim plus the purse winnings of $4,320.
  Allowance/Stakes
Level Racing
  Stakes
and allowance races are races in which the horses are not for sale. 
Allowance races are a race other than claiming for which the racing secretary
drafts certain conditions (see below for more details).  Stakes race
are the top level races.  The purse money is significantly higher in
allowance and stakes level races.
  The
Company acquires horses that it believes could compete at these levels. 
The Company acquires horse not only in the United States but other countries as
well.  Few claimers ever will be able to consistently compete at the
allowance or stakes level.  Therefore, the Company acquires horses through
private purchases in an attempt to acquire horses that can race in
these levels.   Typically, once a horse is acquired in a private
sale it will be run in an allowance race to help gauge the talent level of the
horse and then depending on the results the Company will move the horse or down
in class as needed.
  For
example, the Company acquired Doblado for $95,000 on July 30,
2007.  Doblado is an Argentinean horse who arrived in the
United States in July 2007.  The Company acquired Doblado with the intent
of running the horse in first level allowance race (see below for definition) to
gauge its level with the hope the horse is capable of running at a stakes
level.
  Breeding
  The
Company expects to begin its breeding program in 2008.  The intent to breed
horses that will be able to compete in allowance and stake level races. 
Additionally, the Company will seek to take advantage of the California Bred
Incentive program.  California, and other states, have incentives to bred
quality horses in California.  In 2005, California paid over $10,000,000 in
Cal Bred bonus via the breeders and sires fund.  The Company is currently
looking for between 50 - 200 acres in which to build the breeding farm in
Southern California with the intent to purchase 10 - 15 broodmares (female
horses) for breeding purchases.  The Company has begun to perform research
on broodmares.
  Deciding on
Horse
  When
deciding on acquiring the horse the main pieces of information the Company
relies on are breeding,  past performance charts and race
replays.
  Types of
Races
  Maiden - A race for
Non-Winners
 Maiden
Special Weight - For horses that have never won a race, but cannot be
claimed
 Claiming
- Race in which horses entered are subject to purchase, or "claim", for the
specified claiming price (typically the horses have won at least one
claiming or maiden race)
 Allowance
- a race other than claiming for which the racing secretary drafts certain
conditions to determine weights
 Stakes -
The highest level of racing
 Class
Structure
  Stakes
 Grade 1 Stakes
 Grade 2 Stakes
 Grade 3 Stakes
 Non-Graded Stakes
  Classified
Allowance
  N4X - Non-Winners of less
then 4 races excluding claiming or Madien (also referred to as
"nonwinners of four races other than Madien or claiming" or "4th level
allowance")
 N3X - Non-Winners of less than 3
races excluding claiming or Madien (also referred to as nonwinners of
three races other than Madien or claiming" or "3rd level
allowance")
 N2X - Non-Winners of less than 2
races excluding claiming or Madien (also referred to as nonwinners of
two races other than Madien or claiming" or "2nd level allowance")
 N1X - Non-Winners of less
than 1 races excluding claiming or Madien (also referred to
as nonwinners of one race other than Madien or claiming" or "1st level
allowance")
  Claiming
  $100,000 - horses are entered but
are subject to sale for the claiming price of $100,000
 $80,000 -   horses are
entered but are subject to sale for the claiming price of $80,000
 $62,500 -   horses are
entered but are subject to sale for the claiming price of $62,500
 $50,000 -   horses
are entered but are subject to sale for the claiming price of
$50,000
 $40,000 -   horses are
entered but are subject to sale for the claiming price of $40,000
 $32,000 -   horses are
entered but are subject to sale for the claiming price of $32,000
 $25,000 -   horses are
entered but are subject to sale for the claiming price of $25,000
 $20,000 -   horses are
entered but are subject to sale for the claiming price of $20,000
 $16,000 -   horses are
entered but are subject to sale for the claiming price of $16,000
 $12,500 -   horses are
entered but are subject to sale for the claiming price of $12,500
 $8,000  -   
horses are entered but are subject to sale for the claiming price of
$8,000
  Maiden
  Maiden Special Weight
 $50,000 Maiden Claiming
 $32,000 Madien Claiming
 $25,000 Madien Claiming
  Levels
Compared
  Levels
                      Stakes
                      Allowance
                      Claiming
                      maidenGrade
      1Grade
      2Grade
      3Non-GradedN4X
                      $100,000N3X
                      $80,000N2X
                      $62,500N1X
                      $50,000 -
    $40,000$32,000$25,000$20,000$16,000
      - $12,500
                      Maiden
      Special Weight$12,500
      - $8,000
                      $50,000
      - $32,000 maiden Claiming$25,000
      maiden Claiming
  Competition
  The
Company is a very small player in the thoroughbred racehorse trading
business.  The main competitors include, but not limited
to, Juddmonte Farms, STD Racing, and J. Paul Reddam, and Martin Wygod.
While we consider bloodlines and the win-loss records of a particular horse's
lineage as well as other factors, our success will depend in large measure on
our ability to evaluate the potential of a horse. We will rely almost
exclusively on J. Wade Mezey and Paul J. Howarth to evaluate a horse and to buy
any horse we believe to be a good investment.


Back To Index






ITEM 1A. RISK
FACTORS


The
statements contained in this report that are not statements of historical fact,
including without limitation statements containing the words “believes,”
“expects,” “anticipates,” and similar words, constitute forward-looking
statements that are subject to a number of risks and uncertainties. We make
forward-looking statements from time to time. Investors are cautioned that
forward-looking statements are subject to an inherent risk that actual results
may be different.
  The
following information highlights some of the factors that could cause actual
results to differ materially from the results expressed or implied by our
forward-looking statements. Forward-looking statements should be considered in
light of these factors. Factors that may result in such variances include, but
are not limited to the following:


1. We have incurred
losses from inception and may never generate profits.
  The
Company was organized in February 2007. Consequently, the Company has only a
limited operating history and limited revenues. Activities to date have been
limited to acquiring an interest in certain thoroughbreds, organizational
efforts and obtaining initial financing. The Company must be considered in the
developmental stage. Prospective investors should be aware of the difficulties
encountered by such enterprises, as the Company faces all the risks inherent in
any new business, including the absence of any prior operating history, need for
working capital and intense competition. The likelihood of success of the
Company must be considered in light of such problems, expenses and delays
frequently encountered in connection with the operation of a new business and
the competitive environment in which the Company will be operating.
  2. Limited
Capitalization and Lack of Working Capital.
  The
Company has extremely limited capitalization and is dependent on the proceeds of
this offering, achieving profitable operations and receipt of additional
financing to continue as a going concern. The Company has substantial
commitments for boarding and training of its existing Thoroughbreds and
repayment of debt, in addition to proposed capital expenditures for additional
Bloodstock. In the event the Company receives no or nominal proceeds from this
offering, acquisition of additional racing prospects and Bloodstock would be
curtailed. Even assuming receipt of maximum proceeds from this offering, the
Company will likely require additional capital from outside sources in order to
continue as a going concern. The Company will endeavor to finance its need for
additional working capital through debt or private equity financing. Additional
debt financing would be sought only in the event that equity financing failed to
provide the Company necessary working capital. Debt financing may require the
Company to mortgage, pledge or hypothecate its assets, and would reduce cash
flow otherwise available to pay operating expenses and acquire additional
assets. Debt financing would likely take the form of short-term financing
provided by officers and directors of the Company, to be repaid from future
equity financing. Additional equity financing is anticipated to take the form of
one or more private placements to qualified investors under exemptions from the
registration requirements of the 1933 Act or a subsequent public offering.
However, there are no current agreements or understandings with regard to the
form, time or amount of such financing and there is no assurance that any of
this financing can be obtained or that the Company can continue as a going
concern.
  3. Because
of the limited experience of management in claiming and racing of thoroughbred
horses our business could suffer.
  J. Wade
Mezey and Paul Howarth currently makes all of our decisions regarding the
purchasing, training, racing and selling of our thoroughbred horses.  Mr.
Mezey and Mr. Howarth has had limited experience in claiming and racing of
thoroughbred horses. There can be no assurance that Mr. Mezey and Mr. Howarth
will be able to make the decisions necessary to earn a profit in the business.
 4.
Dependence on a Limited Number of Prospects.
  The
success of the Company will be dependent on only a limited number of prospects.
Injury or loss to any one of these prospects could substantially and adversely
effect the Company's operations. The Company has endeavored to reduce this risk
by obtaining mortality and surgical insurance on three of the prospects
currently owned, but there is no assurance that this insurance will be continued
or that it will insure against all loses which might be incurred. Nonetheless,
the Company's future financial success will depend on the limited number of
horses currently owned until the Company can expand and diversify its stable.
  5.
Dependence on Key Personnel.
  Initially,
success of the Company is entirely dependent upon the management efforts and
expertise of J. Wade Mezey and Paul Howarth and trainers to be
retained by the Company. A loss of the services of any of these individuals
could adversely affect the conduct of the Company's business. In such event, the
Company would be required to obtain other personnel to manage and operate the
Company, and there can be no assurance that the Company would be able to employ
a suitable replacement for either of such individuals, or that a replacement
could be hired on terms which are favorable to the Company. The Company
currently maintains no key man insurance on the lives of any of its officers or
directors. Paul Howarth is employed by another Company and works after hours and
on the weekends for the Company.
  6. Conflict
of Interest.
  Officers
and directors of the Company are subject to potential conflicts of interest in
their service to the Company. The Company's interest in Dixie's Ruler was
purchased from Paul Howarth. Accordingly, the terms and conditions of that
acquisition were not negotiated in arms length transactions. The Company did not
obtain an independent appraisal of the value of the interest in that
Thoroughbred. However, management is of the opinion that the terms and
conditions of the transaction was no less favorable than could be obtained from
since the Company paid the same amount that Mr. Howarth paid for his interest in
Dixie's Ruler. Since each of the officers and directors is engaged in other
business enterprises, and has not devoted their full time to the affairs of the
Company, they are also subject to potential conflicts with regard to time,
effort and corporate opportunity. Messrs. Mezey and Howarth are each engaged in
a variety of other businesses, both within and without the Thoroughbred
industry. None of the officers or directors will devote full time to the affairs
of the Company. However, officers and directors are aware of their fiduciary
duty to the Company and believe they have sufficient time to devote to its
affairs. In addition, each of the officers and directors is aware of the
doctrine of corporate opportunity as it relates to their position as officers
and directors.  Mr. Howarth currently devotes 4-5 hours per week to
Company matters.
  7. Intense
Competition.
  There are
numerous nationally and internationally-known corporations and entities which
are engaged in the type of business proposed to be engaged in by the Company.
Numerous individuals and entities are engaged as owners and trainers of
thoroughbred racehorses, both within the United States and abroad. Competition
for the acquisition and training of thoroughbred prospects is intense. All of
these entities seek to place racing prospects in the premier races throughout
the United States, such as the Kentucky Derby, the Preakness and Belmont Stakes.
In the case of disposition of the Company's Thoroughbreds, the Company would be
competing against major breeders and dealers at private and public sales. Most
of these competitors have substantially greater financial and personnel
resources than the Company. Accordingly, the Company will be at a competitive
disadvantage vis-a-vis its competitors.
  8. Control
of the Company.
  Management
currently controls 72%  of the issued and outstanding shares of our common
stock.  As a result, they have the ability to influence matters affecting
our shareholders, including the election of our directors, the acquisition or
disposition of our assets, and the future issuance of our shares.  Because
our directors, executive officers, and principal shareholders control such
shares, investors may find it difficult to replace our management if they
disagree with the way our business is being operated.
  
 Back To
Index
  9. Lack of
Dividends.
  The
Company has paid no dividends on its Common Stock to date, and there are no
plans to pay any in the foreseeable future. Initial earnings which the Company
may realize, if any, will be retained to finance growth of the Company. Any
future dividends, of which there can be no assurance, will be directly dependent
upon the earnings of the Company, its financial requirements and other
factors.
  10.
Possible Rule 144 Sales and Market Overhang.
  An
aggregate of 9,872,223 shares of the Common Stock presently outstanding are
"restricted securities" within the meaning of the 1933 Act and may hereafter be
sold in compliance with Rule 144 promulgated thereunder. Rule 144 provides,
among other things, and subject to certain limitations, that a person holding
restricted securities for a period of one year may sell, every three months,
those securities in brokerage transactions in an amount equal to 1% of the
Company's outstanding Common Stock or the average weekly trading volume during
the four weeks preceding the sale, whichever amount is greater. After two years,
holders of restricted stock who are not affiliates of the Company may apply to
sell all restricted stock free of restrictions. Possible sales of the Company's
Common Shares pursuant to Rule 144 may, in the future, have a depressive effect
on the price of the Company's Common Shares.
  11.
Preferred Stock Authorized.
  The
Articles of Incorporation of the Company, as amended, authorize the issuance of
a maximum of  20,000,000 shares of Preferred Stock, par value $.001 per
share.
  12. Risks
Related to Thoroughbred Racing.
  The
business of training and racing thoroughbreds is a high-risk venture. There is
no assurance that any thoroughbred acquired by the Company will possess
qualities of a championship character. While a thoroughbred may have an
excellent bloodline, there is no assurance that the racing performance of the
thoroughbred will conform to the bloodline. Moreover, thoroughbreds are subject
to injury and disease which can result in forced retirement from racing, or at
the extreme, natural death or euthanasia of the animal. There can be no
assurances that the value of the thoroughbreds which may be acquired and owned
by the Company, will not decrease in the future or that the Company will not
subsequently incur losses on the racing careers or sale or other disposition of
any or all of the thoroughbreds which the Company may acquire.
  13.
Valuation of Thoroughbreds.
  The
valuation of thoroughbreds is a highly speculative matter and prices have
fluctuated widely in recent years. The success of the Company is dependent upon
the present and future values of thoroughbreds generally, and of the Company's
Thoroughbreds in particular, as well as the racing success of the Company's
Thoroughbreds. Although the future value of thoroughbreds generally cannot be
predicted, it will be affected by the state of the economy, the amount of money
available for investment purposes, and the continued interest of investors and
enthusiasts in the thoroughbred industry. The expense of maintaining, boarding,
training and racing thoroughbreds can be expected to increase during the term of
the Company, regardless of what happens to the future market price of
thoroughbreds or the performance of the Company Thoroughbreds.
  14.
Thoroughbred Racing Business.
  Thoroughbred
racing is extremely speculative and expensive. In the event that the Company
Thoroughbreds were to be transported to various tracks and training centers
throughout the United States, and thus exposed too many other horses in
training, the risk of injury or death increases significantly. The Company's
Thoroughbreds must earn enough through racing to cover expenses of boarding and
training. If the Company Thoroughbreds are unsuccessful in racing, their value
will be adversely affected, as will the shareholders' investment therein.
Furthermore, revenues from racing are dependent upon the size of the purses
offered. The size of the purses depends in general on the extent of public
interest in thoroughbred racing, and in particular on the relative quality of
the specific horses in contention in any specific meeting or race. Although
public interest has been strong in recent years, there is no assurance that
public interest will remain constant, much less increase. Legalized gambling
proliferating in many states threatens to curtail interest in horse racing as a
means of recreation. In addition, there is no assurance that the Company
Thoroughbreds will be of such quality that they may compete in any races which
offer purses of a size sufficient to cover the Company's expenses.
  15.
Government Regulation of Racing.
  The
racing future of and/or market for the Company's Thoroughbreds depends upon
continuing governmental acceptance of thoroughbred racing as a form of legalized
gambling. In the opinion of management, thoroughbred racing is gaining a greater
governmental acceptance and a dependence as a source of revenue. However, at any
time, thoroughbred racing could be subjected to restrictive regulation or banned
entirely. The value of the Company's Thoroughbreds would be substantially
diminished by any such regulation or ban. Thoroughbred racing is regulated in
various states and foreign countries by racing regulatory bodies with which the
owners of thoroughbred racehorses must be licensed. In addition, many regulatory
bodies require the licensing of a stable name for owners racing their racehorses
under such a designation. All of the current officers, directors and principal
shareholders are currently licensed as owners by the Colorado and Kentucky
racing commissions. As a result of these current licenses, the lack of any
disciplinary actions against these individuals, and their reputation within the
industry, management does not anticipate any obstacles to registration in other
states. However, there is no assurance that necessary registrations can be
completed.
  16.
Uninsured Losses.
  Mortality
insurance insures against the death of a horse during the Company's ownership.
Surgical insurance covers possible risks of injury during racing or training.
However, there is no assurance
that insurance will be purchased, or that all of the horses will be covered, or
that the amount of insurance will be adequate, or that it will insure against
all risks. Currently, the Company does not insure its horses.
  17.
Uncertainty of Market for Thoroughbreds.
  Several
major broodmare and yearling sales dominate the public auction market, although
there is also a substantial and active private market of Thoroughbred
bloodstock. Sales of racehorses at public auction can be used as a yardstick of
the relative increases or decreases in the value of racehorses, but there is
still a dominant private market about which no statistics are available. If the
Thoroughbred racing industry suffers a decline, or if general economic
conditions deteriorate, the average sales price in the Thoroughbred market may
decline. If general economic conditions deteriorate, the average sales price in
the Thoroughbred market may decline and, as a result, the owner could suffer
substantial losses from its proposed operations. Moreover, many of the factors
that affect the prices paid for Thoroughbreds are beyond the owner’s control.
Among these factors are the presence of purchasers who buy for speculative
purposes, the apparent attractiveness of Thoroughbreds to foreign investors, the
federal income tax treatment of racing and related activities, the rules of The
Jockey Club prohibiting artificial insemination, the continuation or expansion
of legalized gambling (including the legalization of gambling on other sporting
events) and the size of racing purses.
 
 Back To
Index
  18.
Racetrack Attendance and Wagering.
  A decrease
in average attendance per racing date coupled with increasing costs could
jeopardize the continued existence of certain racetracks which could impact the
availability of race tracks available for the Company to race at and
then negativity impact its operations.
  19.
Involvement by Foreign Interests.
  Foreign
purchasers have accounted for a significant portion of the purchases of the most
expensive yearlings and racehorses over the past decade. Any number of factors,
including world economic and political conditions, the development of
foreigners’ own bloodstock bands, restrictions upon the international transfer
of funds, the strength of the American dollar compared to foreign governments,
could adversely affect the prices paid for the racehorses purchased by the
Partnership.
  20. Penny
Stock Regulation.
  Broker-dealer
practices in connection with transactions in "Penny Stocks" are regulated by
certain penny stock rules adopted by the Securities and Exchange Commission.
Penny stocks generally are equity securities with a price of less than $5.00
(other than securities registered on certain national securities exchanges or
quoted on the NASDAQ system). The penny stock rules require a broker-dealer,
prior to a transaction in a penny stock not otherwise exempt from the rules, to
deliver a standardized risk disclosure document that provides information about
penny stocks and the risk associated with the penny stock market. The
broker-dealer must also provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker- dealer and its
salesperson in the transaction, and monthly account statements showing the
market value of each penny stock held in the customer's account. In addition,
the penny stock rules generally require that prior to a transaction in a penny
stock, the broker- dealer must make a written determination that the penny stock
is a suitable investment for the purchaser and receive the purchaser's written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the level of trading activity in the secondary market for a stock
that becomes subject to the penny stock rules. If the Company's securities
become subject to the penny stock rules, investors in this offering may find it
more difficult to sell their securities.
  21.
Arbitrary Offering Price; Dilution.
  The
offering price, upon listing, of the Common Shares offered hereunder will be
determined by the Company, and bears no necessary relationship to the appraised
value of any Bloodstock or any other ordinary investment criterion. In making
such determination, the prospects for the Company's pursuit of its proposed
business plan, the proceeds to be raised by this offering, the relative costs
and expenses involved in acquiring and training thoroughbreds, and the
competition and market for thoroughbreds racehorses were all considered. In
addition, since the Company has not retained an underwriter for purposes of this
offering, the offering price has not been subject to evaluation by any third
party as would be the case in an underwritten offering.
  22. Racing
Customs.
  Because
Thoroughbred racing is a sport as well as a business, industry practices and
structures have developed which may have not been attributable solely to
profit-maximizing economic decision-making.) For instance, a particular
bloodline could command substantial prices owing principally to the interest of
a small group of individuals having particular goals unrelated to economics. A
decline in this interest could be expected to adversely affect the value of the
bloodline.
  23.
Investors Bear Risk of Loss.
  The
investors of the Company will bear the risk of the Company's operations for the
foreseeable future, with no assurance that management will be successful in
increasing the growth and profitability of the Company.
  23. We may
not be able to comply with all current and future government
regulation.
  Our
business operations are subject to all government regulations normally incident
to conducting business (e.g., occupational safety and health acts, workmen's
compensation statutes, unemployment insurance legislation, income tax and social
security laws and regulations, environmental laws and regulations, consumer
safety laws and regulations, etc.) as well as to governmental laws and
regulations applicable to small public companies and their capital formation
efforts. In addition, we are subject to laws and regulations regarding the
purchase, sale, breeding, transportation, care, and possibly, racing of horses.
Although we will make every effort to comply with applicable laws and
regulations, we can provide no assurance of our ability to do so, nor can we
predict the effect of those regulations on our proposed business activities. If
we are unable to compete effectively with our competitors, we will not be able
to increase revenues or generate profits.
  24. Our
ability to increase revenues and generate profitability is directly related to
our ability to compete effectively with our
competitors.
  There are
many competitors in the claiming industry. Due to the fact that the majority of
claiming operations are run by private companies and partnerships, we are unable
to state the size or profitability of our competitors.
  25. There
is no assurance that our common stock will be cleared to trade on the
over-the-counter Bulletin Board.
  A market
maker has agreed to file a Form 211 with the National Association of
Securities Dealers (the "NASD") to have our Common Stock quoted on the
OTC-Bulletin Board. To date, the NASD has not cleared our Common Stock to be
quoted on the OTC-Bulletin Board and there is no assurance that our Common Stock
will ever be quoted on the OTC-Bulletin Board.
  26. We
cannot guarantee that an active trading market will develop for our common
stock.
  There is
no public market for our Common Stock and there can be no assurance that a
regular trading market for our Common Stock will ever develop or that, if
developed, it will be sustained. Therefore, purchasers of our Common Stock
should have a long-term investment intent and should recognize that it may be
difficult to sell the shares, notwithstanding the fact that they are not
restricted securities. There has not been a market for our Common Stock. We
cannot predict the extent to which a trading market will develop or how liquid a
market might become.
  27.
Existing stockholders may experience significant
dilution from the sale of securities pursuant to our Investment Agreement with
Dutchess.
 The sale
of shares pursuant to our Investment Agreement with Dutchess will have a
dilutive impact on our stockholders. As a result, our net income per share, if
any, could decrease in future periods, and the market price of our common stock
could decline. In addition, the lower our stock price at the time we exercise
our put option, the more shares we will have to issue to Dutchess to draw down
on the full equity line with Dutchess. If our stock price decreases, then our
existing stockholders would experience greater dilution.
 The
common stock to be issued under our agreement with Dutchess will be purchased at
a 7% discount to the lowest closing bid price for the ten days immediately
following our notice to Dutchess of our election to exercise our put right.
These discounted sales could cause the price of our common stock to decline and
you may not be able to sell our stock for more than you paid for
it.
 28. Our
securities have been thinly traded, which may not provide liquidity for our
investors.
  Our
securities are quoted on the OTCBB. We are currently trading ion the OTCBB
 The OTCBB is a regulated quotation service that displays real-time quotes,
last sale prices and volume information in over-the-counter (OTC) securities.
The OTCBB is not an issuer listing service, market or exchange. Although the
OTCBB does not have any listing requirements per se, to be eligible for
quotation on the OTCBB, issuers must remain current in their filings with the
SEC or applicable regulatory authority. Market Makers are not permitted to begin
quotation of a security whose issuer does not meet this filing requirement.
Securities already quoted on the OTCBB that become delinquent in their required
filings will be removed following a 30 or 60 day grace period if they do not
make their required filing during that time. We cannot guarantee that our
application will be accepted or approved and our stock listed and quoted for
sale. As of the date of this filing, there have been no discussions or
understandings between Mezey Howarth Racing Stables, Inc.; nor anyone
acting on our behalf with any market maker regarding participation in a future
trading market for our securities. As
of the date of this filing, there is no public market for our securities. We
have paid no cash dividends and have no outstanding options.Securities
traded on the OTC BB are usually thinly traded, highly volatile, have fewer
market makers and are not followed by analysts. The Securities and Exchange
Commission's order handling rules, which apply to NASDAQ-listed securities, do
not apply to securities quoted on the OTCBB. Quotes for stocks included on the
OTCBB are not listed in newspapers. Therefore, prices for securities traded
solely on the OTCBB may be difficult to obtain and holders of our
securities may be unable to resell their securities at or near their original
acquisition price, or at any price.
  29.
We may not be able to access sufficient funds under the equity line of credit
with Dutchess when needed.
  We will
depend on external financing to fund our planned expansion. We expect that these
financing needs will be partially met by our agreement with Dutchess. However,
due to the terms of the Investment Agreement, this financing may not be
available in sufficient amounts or at all when needed.
  30.
Investors may have to contact a broker-dealer to trade our securities.
  As a
result, you may not be able to buy or sell our securities at the times that you
may wish. Even though our securities are quoted on the OTCBB, the OTCBB may not
permit our investors to sell securities when and in the manner that they wish.
Because there are no automated systems for negotiating trades on the
Over-the-Counter Bulletin Board, they are conducted via telephone. In times of
heavy market volume, the limitations of this process may result in a significant
increase in the time it takes to execute investor orders. Therefore, when
investors place market orders an order to buy or sell a specific number of
shares at the current market price it is possible for the price of a stock to go
up or down significantly during the lapse of time between placing a market order
and its execution.
   31.
Our stock price is volatile and you may not be able to sell your shares for more
than what you paid.
  Our stock
price has been subject to significant volatility, and you may not be able to
sell shares of common stock at or above the price you paid for them. The trading
price of our common stock has been subject to wide fluctuations in the past. The
market price of the common stock could continue to fluctuate in the future in
response to various factors, including, but not limited to: quarterly variations
in operating results; our ability to control costs and improve cash flow;
announcements of technological innovations or new products by us or our
competitors; and changes in investor perceptions.
  The stock
market in general has continued to experience volatility which may further
affect our stock price.As such,
you may not be able to resell your shares of common stock at or above the price
you paid for them.
 32.
We are in the process of registering an aggregate of  6,000,000 shares
of common stock to be issued under the Equity Line of Credit. The sale of such
shares could depress the market price of our common
stock.
  A S-1 was
filed with the Securities and Exchange Commission registering an aggregate
of 6,000,000 shares of common stock under the registration statement of which
this prospectus forms a part for issuance pursuant to the Equity Line of Credit.
The sale of these shares into the public market by Dutchess could depress the
market price of our common stock.
  33.
Assuming we utilize the maximum amount available under the Equity Line of
Credit, existing shareholders could experience substantial dilution upon the
issuance of common stock.
  Our
Equity Line of Credit with Dutchess contemplates the potential future issuance
and sale of up to $10,000,000 of our common stock to Dutchess subject to certain
restrictions and obligations. The following table is an example of the number of
shares that could be issued at various prices assuming we utilize the maximum
amount remaining available under the Equity Line of Credit. These examples
assume issuances at a market price of $0.15 per share and at 10%, 25% and 50%
below $0.15 per share.
  The
following table should be read in conjunction with the footnotes immediately
following the table.
 
 Percent below current market
      price
                    Price per share
      (1)
                    Number of shares
      issuable
      (2)(5)
                    Shares
                      outstanding
      (3)(5)
                    Percent
      of outstanding
                      shares
      (4)(5)0%
                    $0.15
                    66,666,667
                    82,026,667
                    81.3%10%
                    $0.135
                    74,074,074
                    89,434,074
                    82.8%25%
                    $0.1125
                    88,888,889
                    104,248,889
                    85.350%
                    $0..075
                    133,333,334
                    148,693,334
                    89.7%
  (1)Represents
purchase prices equal to 95% of $0.15 and potential reductions thereof of 10%,
25% and 50%.
  (2)Represents
the number of shares issuable if the entire commitment of $10,000,000 under the
Equity Line of Credit were drawn down at the indicated purchase
prices.
  (3)Based on
28,207,223 as of February 22, 2008. Our Articles of Incorporation currently
authorize 180,000,000 shares of common stock; therefore, we would need to amend
our Articles of Incorporation in order to issue these shares. Such an amendment
would require the approval of our shareholders and Board of
Directors.
  (4)Percentage
of the total outstanding shares of common stock after the issuance of the shares
indicated, without considering any contractual restriction on the number of
shares the selling shareholder may own at any point in time or other
restrictions on the number of shares we may
issue.
  (5) The Company currently intends to
issue only 6,000,000 under the Investment Agreement with Dutchess.  The
entire share requirement for the full $10,000,000 would be 66,666,667. 
However, the Company has decided to limit itself to 6,000,000 shares
available or $1,004,400 based on current market prices.  If the company
decides to issue more than 6,000,000 to Dutchess under the Investment Agreement,
we will need to file an additional registration statement with the SEC covering
those additional shares.
  34. Dutchess will pay less than the
then-prevailing market price for our common
stock.
  The
common stock to be issued to Dutchess pursuant to the Investment Agreement will
be purchased at a five percent discount to the lowest closing “best bid” price
(the highest posted bid price) of the common stock during the five consecutive
trading days immediately following the date of our notice to Dutchess of our
election to put shares pursuant to the Investment Agreement. Dutchess has a
financial incentive to sell our common stock immediately upon receiving the
shares to realize the profit equal to the difference between the discounted
price and the market price. If Dutchess sells the shares, the price of our
common stock could decrease. If our stock price decreases, Dutchess may have a
further incentive to sell the shares of our common stock that it holds. These
sales may have a further impact on our stock price.
  35.
There may not be sufficient trading volume in our common stock to permit us to
generate adequate funds from the exercise of our
put.
  The
Investment Agreement provides that the dollar value that we will be permitted to
put to Dutchess will be either: (A) 200% of the average daily volume in the US
market of the common stock for the ten trading days prior to the notice of our
put, multiplied by the average of the three daily closing bid prices immediately
preceding the date of the put, or (B) $10,000.If the
average daily trading volume in our common stock is too low, it is possible that
we would only be permitted to exercise a put for $10,000, which may not provide
adequate funding for our planned operations.
  36.
Our common stock is thinly traded, so you may be unable to sell at or near ask
prices or at all if you need to sell your shares to raise money or otherwise
desire to liquidate your shares.
  Our
common stock has historically been sporadically or “thinly-traded” on the OTCBB,
meaning that the number of persons interested in purchasing our common stock at
or near ask prices at any given time may be relatively small or nonexistent.
This situation is attributable to a number of factors, including the fact that
we are a small company which is relatively unknown to stock analysts, stock
brokers, institutional investors and others in the investment community that
generate or influence sales volume, and that even if we came to the attention of
such persons, they tend to be risk-averse and would be reluctant to follow an
unproven company such as ours or purchase or recommend the purchase of our
shares until such time as we became more seasoned and
viable.
  As a
consequence, there may be periods of several days or more when trading activity
in our shares is minimal or non-existent, as compared to a mature issuer which
has a large and steady volume of trading activity that will generally support
continuous sales without an adverse effect on share price. It is possible that a
broader or more active public trading market for our common stock will not
develop or be sustained, or that current trading levels will
continue.
   37.
The market price for our common stock is particularly volatile given our status
as a relatively unknown company with a small and thinly traded public float,
limited operating history and lack of net revenues which could lead to wide
fluctuations in our share price. The price at which you purchase our common
stock may not be indicative of the price that will prevail in the trading
market.
  The
market for our common stock is characterized by significant price volatility
when compared to seasoned issuers, and we expect that our share price will
continue to be more volatile than a seasoned issuer for the indefinite
future. The volatility in our share price is attributable to a number of
factors. First, as noted above, the shares of our common stock are sporadically
and/or thinly traded. As a consequence of this lack of liquidity, the trading of
relatively small quantities of shares by our shareholders may disproportionately
influence the price of those shares in either direction. The price for our
shares could, for example, decline precipitously in the event that a large
number of shares of our common stock are sold on the market without commensurate
demand, as compared to a seasoned issuer which could better absorb those sales
without adverse impact on its share price.
  Secondly,
we are a speculative or “risky” investment due to our limited operating history
and lack of profits to date, and uncertainty of future market acceptance for our
products and services. As a consequence of this enhanced risk, more risk-adverse
investors may, under the fear of losing all or most of their investment in the
event of negative news or lack of progress, be more inclined to sell their
shares on the market more quickly and at greater discounts than would be the
case with the stock of a seasoned
issuer.

















ITEM 2. PROPERTIES





The
principal owned and leased properties of the Company and its subsidiaries are
listed in the table below.
  Location
      Facilities
              
              Principal
      Use
              
              
              Owned/LeasedSan
      Clemente, California USA
              
              Administrative
      and Corporate
              
              
              Leased;
      provided by J. Wade MezeySanta
      Anita Race Track, Santa Anita, California, USA
              
              Stable
              
              
              Leased;
      provided by track and trainerRancho
      Temescal, Piru, California, USA
              
              Stable
              
              
              Leased;
      provided by track and trainerHemet,
      California, USA
              
              Stable
              
              
              Leased;
      provided by track and trainerCharlestown,
      West Virgina, USA
              
              Stable
              
              
              Leased;
      provided by track and trainer
   ITEM 3. LEGAL
PROCEEDINGS


None.




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


No
matters were submitted to a vote of security holders during the quarter ended
December 31, 2007.









Item 5.MARKET
FOR REGISTRANT’S COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES
OF EQUITY SECURITIES
  Market
Information
  Our
common shares, $.001 par value, trade on the OTCBB Stock Market under the symbol
“MZYH”. The Company's stock did not begin trading until January
2008.
   Holders
  As of the
close of business on, March 31, 2008, there were approximately 50 holders
of record of our common shares. Since many of the common shares are registered
in “nominee” or “street” names, we estimate that the total number of beneficial
owners is considerably higher.
   Dividends
  We have
never declared or paid cash dividends on our common shares. We currently intend
to retain any current and future earnings to finance the growth and development
of our business and, therefore, do not anticipate paying any cash dividends in
the foreseeable future.
   Securities
Authorized for Issuance Under Equity Compensation Plans
  We have
not issued any options as of March 31, 2008.
  Item 6. Selected Financial
Data
  SELECTED
FINANCIAL DATA
 
 The
following selected financial data as the year ended December 31, 2007 is derived
from our audited financial statements. This information should be read together
with the financial statements of Mezey Howarth Racing Stables, Inc., including
the related notes, and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations.” The selected financial data in this
section is not intended to replace the financial statements.
     Item 7. MD&A


MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
   Introduction
Portions of the section include "forward looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995.
  Organization
of Financial Information
  The
Company’s Management Discussion and Analysis provides material historical and
prospective disclosures intended to enable investors and other users to assess
the Company’s financial condition and results of operations. Statements that are
not historical are forward-looking and involve risks and uncertainties, as
discussed under the caption “Forward-Looking Statements” in Item 1 of this
Annual Report on Form 10-K. The financial statements and notes are presented in
Part IV of this Annual Report on Form 10-K. Included in the financial statements
are the Balance Sheet, Statement of Operations, Statement of Shareholders’
Equity and Statement of Cash Flows. The notes, which are an integral part of the
financial statements, provide additional information required to fully
understand the nature of amounts included in the financial statements. The
Company’s Management Discussion and Analysis provides a more detailed discussion
related to the operations of business segments.  In the sections that
follow, statements with respect to 2007 or fiscal 2007 refer to the period from
inception to December 31, 2007.
  Critical
Accounting Policies
  In
December 2001, the Securities and Exchange Commission (the “SEC”) issued
disclosure guidance for “critical accounting policies.” The SEC defines
“critical accounting policies” as those that require application of management’s
most difficult, subjective or complex judgments, often as a result of the need
to make estimates about the effect of matters that are inherently uncertain and
may change in subsequent periods.
  The
Company’s significant accounting policies are described in Note 1 in the Notes
to Consolidated Financial Statements included in Part IV of this Annual Report
on Form 10-K. Not all of these significant accounting policies require
management to make difficult, subjective or complex judgments or estimates.
However, the following policies are deemed to be critical within the SEC
definition. The Company’s senior management has reviewed these critical
accounting policies and estimates and the related Management’s Discussion and
Analysis of Financial Condition and Results of Operations with the Board of
Directors.
  Investments
 The
Company makes strategic investments in companies, LLPs and LLCs that
own race horses. Investments in corporate entities with less than a 20% voting
interest are generally accounted for under the cost method. The cost method is
also used to account for investments that are not in-substance common stock. The
Company uses the equity method to account for investments in common stock or
in-substance common stock of corporate entities, including limited liability
corporations that do not maintain specific ownership accounts, in which it has a
voting interest of 20% to 50% or in which it otherwise has the ability to
exercise significant influence, and in partnerships and limited liability
corporations that do maintain specific ownership accounts in which it has other
than minor to 50% ownership interests.
  Under the
equity method, the investment is originally recorded at cost and adjusted to
recognize the Company's share of net earnings or losses of the investee, limited
to the extent of the Company's investment in and advances to the investee and
financial guarantees on behalf of the investee that create additional
basis.
 The
Company regularly monitors and evaluates the realizable value of its
investments. If events and circumstances indicate that a decline in the value of
these assets has occurred and is other-than-temporary, the Company records a
charge to investment income (expense). As of December 31, 2007, the Company does
not believe there is an impairment of the carrying value of their
investments.
 Impairment
of Long-Lived And Intangible Assets
   The
Company’s long-lived and intangible assets primarily consist of fixed assets,
goodwill and other intangible assets. The Company periodically reviews the
carrying value of its long-lived assets held and used, other than goodwill and
intangible assets with indefinite lives, and assets to be disposed of whenever
events or circumstances indicate that the carrying amount of an asset may not be
recoverable. The Company assesses the recoverability of the asset by estimated
cash flows and at times by independent appraisals. It compares estimated cash
flows expected to be generated from the related assets, or the appraised value
of the asset, to the carrying amounts to determine whether impairment has
occurred. If the estimate of cash flows expected to be generated changes in the
future, the Company may be required to record impairment charges that were not
previously recorded for these assets. If the carrying value of a long-lived
asset is considered impaired, an impairment charge is recorded for the amount by
which the carrying value of the long-lived asset exceeds its fair value. Asset
impairment evaluations are by nature highly subjective. There were no asset
impairment charges for the period presented.
  Revenue
Recognition
 Revenue
is recognized when persuasive evidence of an arrangement exists, delivery has
occurred or services have been rendered, the purchase price is fixed or
determinable and collectability is reasonably assured. Revenue is recorded in
accordance with Staff Accounting Bulletin (“SAB”) No. 104 and in certain
circumstances in accordance with the guidance provided by the Emerging Issues
Task Force (“EITF”) 00-21 “Revenue Arrangements with Multiple Deliverables.” The
major portion of the Company’s revenue is derived from purse winnings and horse
being claimed from the Company. However, the Company has revenue from the sale
or gain of horses investments. The Company recognizes purse winnings revenue
upon the completion of the race.  The Company recognizes revenue from
horses being claimed or from the gain or loss of an investment upon
the transfer of title of the horse.
  Certain
judgments affect the application of the Company’s revenue policy, as mentioned
above. Revenue recognition is significant because net revenue is a key component
of results of operations. In addition, revenue recognition determines the timing
of certain expenses, such as training fee, jockey fee and veterinary fees.
Revenue results are difficult to predict. Any shortfall in revenue or delay in
recognizing revenue could cause operating results to vary significantly from
year to year and quarter to quarter.
 
 
  Results
for the period from Inception to December 31, 2007
 Revenues
  The
following table summarizes our revenues for the period December 31,
2007:
  Revenues:Horse sales
                    $
                    25,000Purse winnings
                    
                    5,301Other
                    
                    750Total
                    $
                    31,051
 Substantially
all of the Company's revenues are obtained from sale of horses through claiming
races and purses offered by races in which its Thoroughbreds participate. As the
Company matures, it may receive revenues from the sale or syndication of its
Thoroughbreds during or following completion of their racing career. Expenses
incurred by the Company include operating expenses associated with training and
racing its Thoroughbreds, as well as administrative expenses.
  Cost
of Sales
  The cost of sales includes the expenses relating to
the upkeep of the company's claimers and the acquistion cost of horses that have
been claimed from the Company.
  General
and Administrative Expenses
 General
and administrative expenses consist primarily of (a) salaries and related
personnel costs, related to our executive, finance, human resource,
information technology and operations organizations, (b) facilities expenses,
(c) accounting and legal professional fees, and (d) other related overhead. We
expect general and administrative expenses to continue to increase in absolute
dollar terms for the foreseeable future as we invest in infrastructure to
support continued growth and incur additional expenses related to being a public
company, including increased audit and legal professional fees, costs of
compliance with securities and other regulations, investor relations expenses,
and higher insurance premiums.
 Liquidity
and Capital Resources
  Net
      cash provided by (used in):Operating
      activities
                        $
                        (589,221)Investing
      activities
                        
                        (28,675)Financing
      activities
                        
                        637,214Net
      increase (decrease) in cash and cash equivalents
                        $
                        19,318
 Cash
Flows Used by Operating Activities
  Cash used
in operating activities primarily consists of net loss adjusted for certain
non-cash items including depreciation and amortization, stock-based compensation
expenses, and the effect of changes in working capital and other
activities.
  Cash used
in operating activities for the period from February 27, 2007 (inception) to
December 31, 2007 was $589,221 and consisted of a $922,903 net
loss.  Stock based compensation for the period from Inception to
December 31, 2007 was $50,000 for employees and $5,750 for
non-employees.
 Cash
Flows Used in Investing Activities
  Cash used
in investing activities was $28,675.  Our principal cash investments are
related to purchases of horses and from the transfer of real estate to the
Company from its officers.
  Cash
Flows Provided by Financing Activities
  Cash
flows provided by financing activities were $637,214. Cash flows provided by
financing activities consisted primarily from loans or investments from its
officers.
  Management
is of the opinion that the Company is dependent upon the obtaining additional
capital and achieving profitable operations to continue as a going concern. The
auditors have also issued their opinion that the Company is a going
concern.  The Company continues to require cash from outside sources to
continue operations, as the Company's operations use, rather than provide
cash.
 Plan
of Operations
  The
general objective of the Company is to acquire Thoroughbred race prospects, race
them and resell them if they are claimers to generate revenue and profit
for the Company. Initially, revenue will be limited to the Company's portion of
any purses won by horses owned by the Company during their racing campaign and
from horses claimed from the Company. While the Company's administrative office
is located in California, it is anticipated that a some of its activities will
take place outside that state. Public sales and premier races of thoroughbreds
are primarily centered in Kentucky, California, New York and Florida.
  While the
Company's business plan anticipates acquisition of additional yearlings or
two-year olds in training to supplement existing horses, the proceeds from this
offering will largely dictate the number and quality of additional racing
prospects which the Company will obtain during 2007. Receipt of no or nominal
proceeds from this offering will limit or curtail acquisition of additional
prospects by the Company. In that event, Company resources will be devoted to
boarding and training of existing Thoroughbreds and other required expenses. If
the Company receives sufficient proceeds, one or more additional Yearlings may
be acquired at public or private sales.
  Important
factors in predicting racing success of Thoroughbreds are pedigree and
conformation. Pedigree refers to the breeding history of the horse determined by
bloodlines from the Sire and Dam. Conformation is the physical attributes of the
horse as determined by personal observation. Management considers both of these
attributes in selecting all of its Thoroughbreds, and anticipates suitable
investigation for any future prospects acquired by the Company. Management may
retain the services of outside consultants and veterinarians to assist in
evaluation of future Bloodstock. No agreements currently exist with any
consultants, and whether management will continue to utilize the services of the
same consultants is yet to be determined; however, management would not hesitate
to recommend these consultants for service in the future. Given the very large
number of prospects placed into the market in any given year, management does
anticipate that it may be necessary to enlist the aid of bloodstock agents in
locating thoroughbreds suitable to the Company's purpose in the future.
  In the
event management determines it is in the best interest of the Company to retain
the services of bloodstock consultants, the factors that will be relied upon in
making such choices will include, but not be limited to: the past relationship
between the Company and the consultant, if any; the consultant's reputation
within the industry; the fees charged by the consultant in performing services;
and the geographic area served by the consultant. In the event management
determines it is in the best interest of the Company to retain the services of a
bloodstock consultant, management anticipates the term of the relationship will
be limited to performance of a specified project. Management does not anticipate
that any long term relationships or agreements will be entered into with any
consultant, although it reserves the right to do so should it be determined to
be in the Company's best interest
   The
Company was organized and exists for the purpose of acquiring, owning, managing,
training, racing and ultimately syndicating thoroughbred racing prospects. It is
not the intention of the Company to enter into the business of breeding
thoroughbreds, although management reserves the right to do so should it
ultimately be determined that it is in the best interest of the Company and its
shareholders. Management has set its efforts towards producing revenues and
profit through the placement of Company Thoroughbreds in established races
throughout the United States. Management anticipates that eventually, Company
revenues and profit will depend to a certain extent upon the sale or syndication
of Company owned Thoroughbreds. It is the intention of management to primarily
focus on the acquisition of Yearlings, although horses of racing age may be
acquired from time to time depending upon the then existing circumstances.
Management anticipates that acquisitions of Bloodstock will initially be limited
due to the Company's limited working capital. Results of Operations
Substantially all of the Company's revenues are obtained from purses offered by
races in which its Thoroughbreds participate. As the Company matures, it may
receive revenues from the sale or syndication of its Thoroughbreds during or
following completion of their racing career. The Expenses incurred by the
Company include operating expenses associated with training and racing its
Thoroughbreds, as well as administrative expenses.
  The
Company contracts with trainers for each horse, which is stabled with the
trainer. The trainers used by the Company maintain their stables at the various
racetracks. Accordingly, all of its Thoroughbreds are boarded with independent
third parties.Many
factors will influence the Company's determination of whether and where to race
the thoroughbreds acquired by the Company. Pedigree, past performance,
conditioning and purses will be evaluated by the Company in conjunction with any
trainers retained by the Company in plotting the horse's racing campaign. While
no specific venue has been determined as of the date of this Prospectus, it is
anticipated that the Thoroughbreds will be raced at the race tracks in the
United States, as the condition and breeding of its Bloodstock dictates.
Possible venues include Churchill Downs and Keeneland in Kentucky, Hollywood
Park and Santa Anita in Los Angeles, Del Mar in San Diego, Remington Park in
Oklahoma City, Aqueduct and Saratoga in New York, Arlington Park in Chicago and
Garden State in New Jersey. Evaluation of racing venues will depend primarily on
recommendations of trainers retained by the Company and the condition, training
and breeding of Company racing prospects. Shareholders may be provided specific
information as to important races in advance and results following conclusion of
races conducted by thoroughbreds of the Company.
  Horses
not deemed qualified to be raced by the Company may be "pinhooked" or re-sold by
the Company shortly following acquisition. Pinhooking can be a means of reducing
the Company's risk in any particular prospect by transferring the horse prior to
completion of his development. A ready market for resale of Thoroughbred racing
prospects exists in various parts of the United States, and management is
familiar with various sales in those venues. While pinhooking may be utilized to
reduce the Company's risk in any single fiscal year, it is not anticipated to be
a major source of revenue in the foreseeable future.
  The
Company will have multiple divisions: Claiming, Allowance/Stakes,
Pinhooking, Breeding and Investments.  Currently, the Company is
operating the Claiming, Allowance/Stakes, and
Investments divisions.
  Claiming
Division
  The
Claiming Division entails the acquisition of horses through Claiming Races at
various racetracks.  The Company seeks to acquire horses that may be moved
up in class and resold for a higher amount than that which the company
paid.  The Company will generate revenue from the sell of the horse in
Claiming Races and from the purse money generated as well.  Horses that are
acquired for this division will likely be resold within 120 days since they are
for sell in every race they run in.  For example, the Company acquired
Blushing Bear Cat for $21,550.  The Company ran Blushing Bear Cat in a
$25,000 Claiming Race and Blushing Bear Cat was claimed for $25,000 from the
Company and won $4,691 in purse winnings.
  Stakes/Allowance Division
  The
Stakes/Allowance Division consists of horses that are acquired to run in
allowance and stakes level races.  These horses are not intended to be
resold and the main source of revenue will be from purse winnings.  This
division consists of a higher caliber of horses than the Claiming
Division.  The Company will acquire horses for this division through
private purchase, auctions and high level claiming race.  For example, the
Company acquired Doblado from Argentina to race in allowance and stake
races.  The
Company is currently allowing Doblado to adjust to the artificial dirt tracks in
California.
  Investments
  This division acquires a minority
interest in horses that are owned by other stables.  The purpose of this
division is to allow the Company to acquire horses in other states than
California without incurring the cost of setting up stables in those
states.
  The
Company's long term objective is to is develop a stable of race horses
sufficient to generate a steady stream of revenue and profit. In order to
achieve this objective, management anticipates the need for substantial
additional capital. Depending upon the success of its initial efforts, on the
state of the thoroughbred industry and other factors beyond the Company's
control, management anticipates conducting a subsequent public offering in the
future to obtain such capital. Syndication or sale of Company Thoroughbreds may
also provide a source of capital.
  Real
Estate Division
 The
Company has been deeded three properties from its founders.  These
properties were intended to be used at vacation rentals for third parties and
shareholders. Subsequent to year end the transaction was rescinded.
   ABTTC,
INC.
  On
February 4, 2008, the Company entered into a letter of intent to acquire ABTTC,
Inc. for $7,750,000.  ABTTC, Inc. provides drug and alcohol rehabilitation
services. It was intended that upon closing of the transaction, ABTTC, Inc.
would become a wholly owned subsidiary of Mezey Howarth Racing Stables,
Inc.  Paul Howarth is a shareholder of ABTTC, Inc. and abstained from all
negotiations related to the transactions and did not vote on the
transaction.  In addition, the Company issued 9,722,223 shares of
common stock valued at $1,750,000, or $0.18 per share, to ABTTC, Inc. as the
initial payment for the acquisition.  The fair value of the Company’s
common stock was determined by using the closing market price of the Company’s
common stock on the date of issuance. The remaining amount under the proposed
acquisition is will be paid over the next 18 months from the date of close.
  On March
31, 2008, the Company terminated the pending transaction due to the desire to
focus on the horse racing operations before expanding into other business
segments. The initial payment of 9,722,223 shares of Company are
non-recoverable and served as a break up fee in the event the Company does not
close on the transaction without cause. The break up fee was based on ABTTC
having received previous cash offers to be acquired and in exchange for ABTTC
acting exclusively with the Company. In connection, with the termination the
Company forfeited the common stock issued and recorded an expense of
$1,750,000.  The Company decided to cancel the ABTTC transaction in order
to devote all the resources and time of the Company on growing its breeding
division and stable of thoroughbreds instead of adding a subsidiary in a
different industry.  Mr. Howarth abstained from all negotiations and
discussions related to the transactions and did not vote on the
transaction.
 Inflation
  We
believe that inflation has not has a material effect on our
operations.
  Off
Balance Sheet Arrangements
  We do not maintain off-balance sheet
arrangements.
 
  Recent Accounting
Pronouncements
  SFAS
No. 141R, Business Combinations
   In
December 2007, the FASB issued Statement of Financial Accounting Standards No.
141(R), Business
Combinations (SFAS No. 141R). SFAS 141R will significantly change the
accounting for and reporting of business combination transactions in
consolidated financial statements. SFAS 141R retains the fundamental
requirements in Statement 141, Business
Combinations while providing additional definitions, such as the
definition of the acquirer in a purchase and improvements in the application of
how the acquisition method is applied. This Statement becomes effective January
1, 2009. Early adoption is not permitted. We are currently evaluating the impact
this guidance will have on our financial statements.
   SFAS
No. 157, Fair Value Measurements
   In
September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements (SFAS No. 157). This statement defines fair value as used in
numerous accounting pronouncements, establishes a framework for measuring fair
value in GAAP and expands disclosure related to the use of fair value measures
in financial statements. SFAS No. 157 does not expand the use of fair value
measures in financial statements, but standardizes its definition and guidance
in GAAP. The standard emphasizes that fair value is a market-based measurement
and not an entity-specific measurement based on an exchange transaction in which
the entity sells an asset or transfers a liability (exit price). SFAS No. 157
establishes a fair value hierarchy from observable market data as the highest
level to fair value based on an entity's own fair value assumptions as the
lowest level. SFAS No. 157 became effective for our financial statements
starting January 1, 2008. It does not have a significant impact on our results
of operations and financial condition at this time.
   SFAS
No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities
   In
February 2007, the FASB issued SFAS No. 159, The Fair Value
Option for Financial Assets and Financial Liabilities. SFAS No. 159
provides an entity with the option, at specified election dates, to measure
certain financial assets and liabilities and other items at fair value, with
changes in fair value recognized in earnings as those changes occur. SFAS No.
159 also establishes presentation and disclosure requirements that include
displaying the fair value of those assets on the face of the balance sheet and
providing management's reasons for electing the fair value option for each
eligible item. The revisions
of SFAS No. 159 are effective beginning January 1, 2008. It does not have a
significant impact on our results of operations and financial condition at this
time.


Item
      7A.
              Quantitative
      and Qualitative Disclosures About Market
  Risks
  Not applicable
  Item
      8.
              Financial
      Statements and Supplementary
Data
  The
financial statements and supplemental data required by this item are set forth
at the pages indicated in Item 15(a) (1) of this annual report on Form
10-K.
  Item
      9.
              Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
  None.
  Item
      9A.
              Controls
      and Procedures
  Conclusion Regarding
the Effectiveness of Disclosure Controls and Procedures
  We maintain disclosure controls
and procedures that are designed to provide reasonable assurance that
information required to be disclosed in our filings with the SEC under the
Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules and
forms and that such information is accumulated and communicated to management,
including our chief executive officer (“CEO”) and chief financial officer
(“CFO”), as appropriate, to allow for timely decisions regarding required
disclosure. In designing and evaluating the disclosure controls and procedures,
management recognizes that any controls and procedures, no matter how well
designed and operated, can provide only reasonable assurance of achieving the
desired control objectives, and management is required to apply its judgment in
evaluating the cost-benefit relationship of possible controls and
procedures.
 We are
not required by SEC Rule 13a-15(b), in connection with filing this Annual
Report on Form 10-K, therefore management has not conducted an
evaluation, with the participation of our CEO and CFO, of the effectiveness of
the design and operation of our disclosure controls and procedures, as such term
is defined under Rule 13a-15(e) promulgated under the Exchange Act, as of
December 31, 2007, the end of the period covered by this report. Our CEO and CFO
concluded that as of the end of the period covered by this report, our
disclosure controls and procedures have been effective at a reasonable assurance
level as a development stage enterprise. However, additional disclosure controls
and procedures to improve the assurance level will be proposed, reviewed and
implemented by management.
  Management
Report on Internal Control Over Financial Reporting
   Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f)
under the Securities Exchange Act of 1934, as a process designed by, or under
the supervision of, the Principal Executive Officer and Principal Financial
Officer and effected by our management and other personnel to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with GAAP and
includes those policies and procedures that:
  •
                
                pertain
      to the maintenance of records that in reasonable detail accurately and
      fairly reflect the transactions and disposition of the assets of the
      Company;
  •
                
                provide
      reasonable assurance that the transactions are recorded as necessary to
      permit preparation of financial statements in accordance with GAAP, and
      that receipts and expenditures of the Company are being made only in
      accordance with authorizations of management and/or members of the Board
      of Directors; and
  •
                
                provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of the Company's assets that
      could have a material effect on the financial
  statements.
  Because
of the inherent limitations of internal control over financial reporting,
including the possibility of human error and the circumvention or overriding of
controls, material misstatements may not be prevented or detected on a timely
basis. In addition, projections of any evaluation of effectiveness to future
periods are subject to the risks that controls may become inadequate because of
changes and conditions or that the degree of compliance with policies or
procedures may deteriorate. Accordingly, even internal controls determined to be
effective canprovide
only reasonable assurance that the information required to be disclosed in
reports filed under the Securities Exchange Act of 1934 is recorded, processed,
summarized and represented within the time periods required.
   This
annual report does not include an attestation report of the Company’s registered
public accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by the Company’s registered
public accounting firm pursuant to temporary rules of the SEC that permit
the Company to provide only management’s report in this Annual Report on
Form 10-K.
   Changes
in Internal Control Over Financial Reporting
   There
have been no significant changes in our internal control over financial
reporting during the quarter ended December 31, 2007 that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.
 Changes in Internal
Control Over Financial Reporting
   There was
no change in our internal control over financial reporting during our most
recent fiscal quarter that has materially affected, or is reasonably likely to
materially affect, our internal controls over financial reporting.
  ITEM
      9B.
                OTHER
      INFORMATION.
  For the
quarter ended December 31, 2007, all items required to be disclosed under Form
8-K were reported under Form 8-K
 PART
III
  Item
      10.
              Directors,
      Executive Officers of the Registrant and Corporate
      Governance
  The officers and directors of Mezey
Howarth Racing Stables, Inc., whose one year terms will expire March 1, 2009, or
at such a time as their successor(s) shall be elected and qualified are as
follows:
  Name
                  Age
                  PositionJ.
      Wade Mezey
                  33
                  CEO,
      Secretary and DirectorPaul
      Howarth
                  40
                  President, Director
   J. Wade
Mezey, CEO/Director. Mr. Mezey is our President and CEO and a
member of the Board of Directors. Mr. Mezey was previously the President/COO of
NAPP Tour, Inc. From 2004 - 2005, Mr. Mezey was the Chief Legal Officer and
Interim Chief Accounting Officer of College Partnership, Inc. While at College
Partnership Mr. Mezey worked with the auditors and finance department to create
a system of accounting control and procedures. From 2003 - 2004, Mr. Mezey
worked for Vision Direct Marketing as its Vice-President of Operations and
General Counsel. From 2002 - 2003, Mr. Mezey worked as an attorney in Washington
D.C. Mr. Mezey graduated from Georgetown University Law Center with an LL.M. in
Securities and Financial Regulation. Mr. Mezey received his J.D., with cum laude
honors, from New England School of Law and his B.S. from Virginia Commonwealth
University.
  Paul
Howarth, Exec. President/Director.Mr. Howarth is our Exec.
Vice-President, CFO and a member of the Board of Directors.  After
graduating from Seton Hall University with a BA degree, he continued his
graduate studies at Seton Hall University accepting a scholarship from the state
of New Jersey. His area of study in graduate school was education and
administration. Mr. Howarth previously worked as production manager
for Western Home Mortgage Corp.  Mr. Howarth then was
recruited by Home Loan Center "HLC" (HomeLoanCenter.com) where he was
promoted several times to the level of Director of Production and became a major
share holder of the Company. Mr. Howarth was responsible for 13 sales managers
and over 150 sales staff. HLC was later sold to Lending Tree.com and Mr. Howarth
was recruited by Bear Stearns & CO. (Bear Stearns.com, Beardirect.net) Bear
Stearns Residential Mortgage Corp. "Bear Res." is Mr. Howarth's third successful
start up in 10 years. Between HLC and Bear Res., Mr. Howarth has helped
cultivate on average $500,000,000 per month in funded loan volume. Mr. Howarth
was promoted several times with in Bear Stearns escalating to SVP. of
Correspondent Lending. Mr. Howarth is also co-founder and co. owner of A Better
Tomorrow Inc, (ABTTC.com)a Drug and Alcohol treatment center in Riverside, Ca.
  The foregoing persons are promoters
of Mezey Howarth Racing Stables, Inc., as that term is defined in the rules and
regulations promulgated under the Securities and Exchange Act of 1933.
  Directors are elected to serve until
the next annual meeting of stockholders and until their successors have been
elected and qualified. Officers are appointed to serve until the meeting of the
board of directors following the next annual meeting of stockholders and until
their successors have been elected and qualified.
  Mr. Mezey devotes all of his time to
Company matters.  Mr. Howarth currently devotes 4-5 hours per week to
Company matters. After receiving funding per our business plan they intend
to devote as much time as the board of directors deems necessary to manage the
affairs of the Company. No executive officer or director of the corporation has
been the subject of any order, judgment, or decree of any court of competent
jurisdiction, or any regulatory agency permanently or temporarily enjoining,
barring, suspending or otherwise limiting him or her from acting as an
investment advisor, underwriter, broker or dealer in the securities industry, or
as an affiliated person, director or employee of an investment Company, bank,
savings and loan association, or insurance Company or from engaging in or
continuing any conduct or practice in connection with any such activity or in
connection with the purchase or sale of any securities. No executive officer or
director of the corporation has been convicted in any criminal proceeding
(excluding traffic violations) or is the subject of a criminal proceeding which
is currently pending.
   Committees
of the Board
  We do not
have a separate audit committee at this time. Our entire board of directors acts
as our audit committee. We intend to form an audit committee, a corporate
governance and nominating committee and a compensation committee once our board
membership increases. Our plan is to start searching and interviewing possible
independent board members in the next six months and have a independent board in
place in the next 9 months.
   Family
Relationships
  There are
no family relationships among our directors or officers.
   Involvement
in Certain Legal
   Our
directors, executive officers and control persons have not been involved in any
of the following events during the past five years:
  1.
                  Any
      bankruptcy petition filed by or against any business of which such person
      was a general partner or executive officer either at the time of the
      bankruptcy or within two years prior to that time,2.
                  Any
      conviction in a criminal proceeding or being subject to a pending criminal
      proceeding (excluding traffic violations and other minor
      offenses);3.
                  Being
      subject to any order, judgment, or decree, not subsequently reversed,
      suspended or vacated, of any court of competent jurisdiction, permanently
      or temporarily enjoining, barring, suspending or otherwise limiting his or
      her involvement in any type of business, securities or banking activities;
      or4.
                  Being found by a court of
      competent jurisdiction (in a civil action), the Commission or the
      Commodity Futures Trading Commission to have violated a federal or state
      securities or commodities law, and the judgment has not been reversed,
      suspended, or vacated.
  Item
      11.
              Executive
      Compensation
  Name and
      Position
                Year
                Salary($)
                Bonus($)
                Other Annual
      Compensation($)
                Restricted
      Stock Award ($)
                Options SARs
      (#)
                LTIP
      Payouts ($)
                All
      Other Compensation ($)J.
      Wade Mezey, CEO and Director
                2007
                50,250(1)
                0
                0
                0
                0
                0
                0Paul
      Howarth,  President, Director
                2007
                50,250(1)
                0
                0
                0
                0
                0
                0
  Compensation
Committee Interlocks and Insider Participation
  The
Company does not have a compensation committee. All compensation agreements are
determined by Mr. Mezey and Mr. Howarth based their perception of the fair value
of the services. Effective February 1, 2008, the Company entered into new
employment agreements with J. Wade Mezey and Paul Howarth. The term of each
agreement is five years. Under the terms of the agreement, each individual will
receive a base annual salary of $360,000, $100,000 bonus payable on the
effective date of the agreement that is convertible into common stock at the
fair market value of the Company’s common stock on the date of the agreement;
$200,000 retention bonus at the end of each year the employee is employed; and
if termination is without cause the employee has a right to be paid up to twelve
months of salary.
 
  Item
      12.
              Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
  The following table sets forth
information on the ownership of Mezey Howarth Racing Stables, Inc. voting
securities by officers, directors and major shareholders as well as those who
own beneficially more than five percent of our common stock as of March 31,
2008:
 Name
      and Address (1)
                  Amount
      and Nature of Beneficial
    Ownership
                  Percent
      OwnedJ. Wade
Mezey
                    1001 Ave Pico, Ste C-629, San
      Clemente, CA 92673
                  4,750,000(1)
                  18%Paul J. Howarth
                    1001 Ave Pico, ste C-629, San
      Clemente, CA 92673
                  7,916,667(1)
                  28%The Mezey Howarth Group,
      Inc.
                    1001 Ave Pico, Ste C-629, San
      Clemente, CA 92673
                  150,000(1)
                  *Total
                  12,816,667(1)
                  46%
  (1) The
Mezey Howarth Group currently owns 150,000 shares of Common Stock and was issued
2,525,850 of our Series A Convertible Preferred Stock.  These preferred
shares have been split between Mr. Mezey and Mr. Howarth as a result each owns
1,262,925 of these shares.  The 2,525,850  Series A Convertible
Preferred Stock can be converted into 25,258,500 shares of Common
Stock.   Additionally subsequent to December 31, 2007, Mr. Mezey
and Mr. Howarth each own an additional 2,500,000 shares of Series A
Convertible Preferred Stock that may convert to 25,000,000 shares of Common
Stock that where issued upon converting the $500,000 note from Mr. Mezey. 
Therefore, Mr. Mezey and Mr. Howarth each own 3,762,925 shares of Series A
Convertible Preferred Stock which may be converted into 37,629,250 shares of
Common Stock at anytime.
  * Less than 1%
  Item
      13.
              Certain
      Relationships and Related Transactions, and Director
      Independence
  The
Company issued 150,000 of unregistered shares of common stock to The Mezey
Howarth Group for pre-incorporations services and expenses.  All of such
shares are "restricted" securities, as that term is defined by the Securities
Act of 1933, as amended, and are held by an officer and director of the Company.
(See "Principal Stockholders".)
  On May
18, 2007, the Company acquired its interest in Dixie's Ruler and Our Emblem 2
Year Colt from Paul Howarth, an officer of the Company, for the price paid by
Mr. Howarth for such interests.
  In July
2007, the Company received a promissory note from The Mezey Howarth Group for
$252,585 in cash and real estate in exchange for 2,525,855 shares of Series A
Convertible Preferred Stock.   All of such shares are "restricted"
securities, as that term is defined by the Securities Act of 1933, as amended,
and are held by an officer and director of the Company. (See "Principal Stockholders".)  
In
April 1, 2008, the Company and shareholders rescinded the contribution. In
connection with the rescindment the shareholders returned 2,101,500 shares of
Series A Convertible Preferred stock and the Company transferred back the real
estate and related mortgages to the shareholders.
 On July
25, 2007, the Company agreed to convert the payroll liabilities of $25,000
payable to J. Wade Mezey into 2,500,000 shares of Common
Stock.
  On July
25, 2007, the Company agreed to convert the payroll liabilities of $25,000
payable to Paul J. Howarth into 2,500,000 shares of Common Stock.
  On January
11, 2008, the Company agreed to convert $150,000 in deferred
compensation liabilities owed to each J. Wade Mezey and Paul Howarth into
1,500,000 shares of restricted stock.  Additionally, the Company converted
$100,000 in deferred Compensation to J. Wade Mezey and Paul Howarth into
1,000,000 shares of Common Stock under the Company's S-8.
  On
February 4, 2008, the Company agreed to acquire ABTTC, Inc. for
$7,750,000.  Mr.  Howarth is a shareholder of ABTTC, Inc.  Mr.
Howarth has abstained from any and all discussions and negotiations regarding
this transaction and will abstain from the shareholder vote set for February 20,
2008 on this matter. Subsequent
to December 31, 2007, the transaction was cancelled. On March 31, 2008, the
Company terminated the pending transaction due to the desire to focus on the
horse racing operations before expanding into other business segments. The
initial payment of 9,722,223 shares of Company are non-recoverable and
served as a break up fee in the event the Company does not close on the
transaction without cause. The break up fee was based on ABTTC having received
previous cash offers to be acquired and in exchange for ABTTC acting exclusively
with the Company. In connection, with the termination the Company forfeited the
common stock issued and recorded an expense of $1,750,000.
 On April 1, 2008, the Company transferred title
of the real estate deeded from the founders in July 2007 back to the
founders.  In exchange, the founders agreed to exchange the previous
compensation given to them upon transfering the propoperties in July
2007
  Our
executive offices are located at  1001 Ave Pico, Suite C-629, San Clemente,
California 92673. We believe that this space if adequate to operate our current
business and as business warrants we may expand into a larger space.
  .
 Item
      14.
              Principal
      Accountant Fees and Services
  Fees
Paid to the Independent Registered Public Accountants
  The
Company’s fees for the period ended December 31, 2007, are set forth in the
table below.
  McKennon
      Wilson & Morgan LLPAudit
      Fees
                $
                24,250Other
      Audit Related Fees
                
                12,500Total
                $
                36,750
  For
purposes of the preceding table, the professional fees are classified as
follows:
  •
                
                Audit
      Fees – These are fees for professional services performed for the audit of
      our annual financial statements and review of financial statements
      included in our Form 10-QSB filings, services that are normally provided
      by independent registered public accountants in connection with statutory
      and regulatory filings or engagements, and services that generally
      independent registered public accountants reasonably can provide, such as
      statutory audits, attest services, contents, and assistance with and
      review of documents filed with the
SEC.
   •
                
                Other Audit Related
      Fees – These
      are fees for other permissible work performed that do not meet the
      above-described categories, including procedures related to the filing of
      the Company’s SB-2, S-1 and S-8 registration
      statements.
    PART
IV
  Item
      15.
              Exhibits
      and Financial Statement
Schedules
  (a) Financial
Statements
   (1)Index
to Consolidated Financial Statements
   The
consolidated financial statements required by this item are submitted in a
separate section beginning on page A-1 of this Annual Report on Form
10-A.
  PageReport
      of Independent Registered Public Accounting Firm
              
              F-2Consolidated
      Balance Sheet as of December 31, 2007
              
              F-3Consolidated
      Statement of Operations for the period from February 27, 2007
      (inception) through December 31, 2007
              
              F-4Consolidated
      Statement of Cash Flows for the period from February 27, 2007
      (inception) through December 31, 2007
              
              F-5Consolidated
      Statement of Stockholders’ Deficit for the period from February 27, 2007
      (inception) through December 31, 2007
              
              F-6Notes
      to Consolidated Financial Statements
              
              F-7
  (2)Financial
Statement Schedules
   The
financial statement schedules required by this item are omitted because they are
not applicable or the required information is shown in the Financial Statements
or the notes thereto.
   (3)Listing
of Exhibits





SIGNATURES
   Pursuant
to the requirements of Section 13 or 15(d) 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, on this 15th day of April
2008.
   Mezey
Howarth Racing Stables, Inc.
  By
                /s/J.
      Wade Mezey
  J. Wade Mezey
   President and Chief
Executive Officer
   KNOW ALL
MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints J. Wade Mezey, his attorney-in-fact, with the full
power of substitution, for him in any and all capacities, to sign any amendments
to this Annual Report on Form 10-K, and to file the same, with exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact, or his or her substitute or substitutes, may do or cause to
be done by virtue hereof.
   Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
  Signature
                
                Title
                
                Date/s/J.
      Wade Mezy
                  J.
      Wade Mezey
                
                Chief Executive
      Officer (Principal
      Executive Officer & Prinicpal Financial and Accounting
      Officer)
                
                April
      15, 2008
     Back
To Index
 INDEX
TO FINANCIAL STATEMENTS
  PAGEReport of Independent Registered Public
      Accounting Firm
                  F-2Consolidated Balance
      Sheet
                  F-3Consolidated Statement of
      Operations
                  F-4Consolidated Statement of
      Changes in Stockholders' Deficit
                  F-5Consolidated Statement of Cash
      Flows
                  F-6Notes To Consolidated Financial
      Statements
                  F-7
    Back To
Index
  
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
   To the
Board of Directors and Stockholders
 Mezey
Howarth Racing Stables, Inc. (formerly MH 1, Inc.)
   We have
audited the accompanying consolidated balance sheet of Mezey Howarth Racing
Stables, Inc. (formerly MH 1, Inc.) as of December 31, 2007, and the
related statements of operations, changes in stockholders' deficit, and cash
flows for the period from February 27, 2007 (Inception) to December 31, 2007.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
  We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
includes examining on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
  In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Mezey Howarth Racing
Stables, Inc. as of December 31, 2007, and the results of its operations and its
cash flows for the period from February 27, 2007 (Inception) to December
31, 2007, in conformity with generally accepted accounting principles in the
United States of America.
  The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, at December 31, 2007, the Company has a
working capital and stockholders’ deficit, and it has incurred losses from
operations.   These conditions raise substantial doubt about the
Company’s  ability to continue as a going concern. Management’s plans
are also described in Note 1. The accompanying consolidated financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
 /s/
McKennon, Wilson & Morgan, LLP
 April 15, 2008
 Irvine,
California
  
  F-2
   MEZEY
      HOWARTH RACING STABLES, INC.(Formerly
      MH 1, Inc.)CONSOLIDATED BALANCE
      SHEETAssets
      (Note 4)December 31,
      2007Current
      Assets:Cash or cash equivalents
                  $                   19,318Investments
      in limited liability entities (see Note 2)
                  19,925Total Current Assets
                  39,243Fixed
      Assets:Livestock, net of accumulated depreciation of
      $5,278
                  89,722Real estate
                  1,585,000Total Assets
                  $              1,713,965Liabilities
      and Stockholders' DeficitCurrent
      Liabilities:Accrued
      liabilities
                  $                 254,814Note payable
                  77,000Loans payable to related party
                  79,739Note payable to related party, net of unamortized discount of
      $36,364
                  463,636Total Current Liabilities (Note 4)
                  875,189Long-Term
      LiabilitiesMortgages payable (Note 4)
                  1,374,850Total Liabilities
                  2,250,039Stockholder's
      Deficit (Note 3):Series A convertible preferred stock, $.001 par value; 20,000,000
      authorized; 2,525,855
                    issued
      and outstanding as of December 31, 2007.
                  252,585Common
      stock, $.001 par value; 180,000,000 authorized, 7,675,000 issued and
                    outstanding
                  7,675Additional paid-in capital
                  126,569Accumulated deficit
                  (922,903)Total
      Stockholders' Deficit
                  (536,074)Total
      liabilities and stockholders'
    equity
                  $              1,713,965
  The
accompanying notes are an integral part of the consolidated financial
statements.
   F-3
 
 MEZEY
      HOWARTH RACING STABLES, INC.(Formerly MH
      1, Inc.)CONSOLIDATED
      STATEMENT OF OPERATIONSFor
      the Period from February 27, 2007 (Inception) to December 31,
      2007Revenue:Horse
      sales
                      
                      $                 25,000Purse
      winnings
                      
                      5,301Other
                      
                      
                      750Total
                      
                      31,051Cost
      of Sales
                      
                      39,876Gross
      Profit
                      
                      (8,825)Operating
      ExpensesGeneral
      and administrative
                      871,285Operating
      Loss
                      (880,110)Other
      Income (expense):Minority
      interest
                      
                      (8,750)Interest
      expense
                      
                      (33,773)Other
      expense
                      
                      (270)Net
      loss
                      
                      $               (922,903)Weighted
      average number of common shares outstandingBasic
      and Diluted
                      3,970,847Net
      loss per common shareBasic
      and Diluted
                      $                    (0.23)
  The accompanying
notes are an integral part of the consolidated financial
statements.
   
 F-4
 
 MEZEY
      HOWARTH RACING STABLES(Formerly MH
      1, Inc.)CONSOLIDATED
      STATEMENT OF CHANGES IN STOCKHOLDERS'DEFICITFor
      the period from February 27, 2007 (Inception) through December
      31, 2007Series
      A Preferred Stock
                  Common
      Stock
                  
                  Additional
                    Paid-in
      Capital
                  
                  Stock
      Subscriptions Receivable
                  
                  Accumulated Deficit
                  
                  Total Stockholders’
      EquityShares
                  Amount
                  Shares
                  AmountBalances,
      February 27, 2007
                  
                  
                  -
                  $
                  -
                  
                  -
                  $
                  -
                  $
                  -
                  
                  $
                  -
                  $
                  -Sale
      of common stock at $.001 per share on March 14, 2007 to
      founders
                  -
                  
                  -
                  
                  150,000
                  
                  150
                  
                  2,030
                  
                  -
                  
                  -
                  
                  2,180Sale
      of Series A Preferred Stock  at $.10 per Share on June 18, 2007 to
      founders
                  2,150,000
                  
                  215,000
                  
                  -
                  
                  -
                  
                  -
                  
                  (200,000)
                  
                  
                  
                  15,000Repayment
      of note under stock subscription agreement on July 19,
2007
                  -
                  
                  -
                  
                  -
                  
                  -
                  
                  -
                  
                  27,435
                  
                  -
                  
                  27,435Issuance
      of common stock to officers at $0.01 per share for services on July 25,
      2007
                  -
                  
                  -
                  
                  5,000,000
                  
                  5,000
                  
                  45,000
                  
                  -
                  
                  -
                  
                  50,000Issuance
      of common stock for acquisition of Doblado at $0.01 per share on July 30,
      2007
                  -
                  
                  -
                  
                  300,000
                  
                  300
                  
                  2,700
                  
                  -
                  
                  -
                  
                  3,000Sale
      of common stock to selling stockholders at $.01 per share on July 31,
      2007
                  -
                  
                  -
                  
                  1,650,000
                  
                  1,650
                  
                  13,350
                  
                  -
                  
                  -
                  
                  15,000Issuance
      of common stock to consultants at $.01 per share for services on August
      15, 2007
                  -
                  
                  
                  
                  575,000
                  
                  575
                  
                  5,175
                  
                  -
                  
                  -
                  
                  5,750Sale
      of Series A Preferred Stock  at $.10 per Share on September 21, 2007
      to founders (Note 3)
                  375,855
                  
                  37,585
                  
                  -
                  
                  -
                  
                  -
                  
                  -
                  
                  -
                  
                  37,585Net
      fair value of property contributed by shareholders
                  
                  
                  
                  
                  
                  -
                  
                  -
                  
                  
                  
                  172,565
                  
                  -
                  
                  172,565Discount
      on related party note payable
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  45,455
                  
                  
                  
                  
                  
                  45,455Capital
      Contribution
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  12,857
                  
                  
                  
                  
                  
                  12,857Net
      loss
                  
                  
                  -
                  
                  -
                  
                  -
                  
                  -
                  
                  -
                  
                  -
                  
                  (922,903)
                  
                  (922,903)Balances
      at December 31, 2007
                  
                  
                  2,525,855
                  $
                  252,585
                  
                  7,675,000
                  $
                  7,675
                  $
                  126,569
                  $
                  -
                  $
                  (922,903)
                  $
                  (536,076)
   The accompanying notes are an
integral part of the consolidated financial statements.
 
 F-5
  MEZEY
      HOWARTH RACING STABLES(Formerly MH
      1, Inc.)CONSOLIDATED
      STATEMENT OF CASHFLOWSFor
      the period from February 27, 2007 (Inception) through December
      31, 2007
 For
      the Period from February 27, 2007 (Inception) to
                      December
      31, 2007Cash
      flows from operating activities:Net loss
                    
                    (922,903)Minority interest expense
                    
                    8,750Stock issued to employees for services
                    
                    50,000Stock issued to consultants for services
                    
                    5,750Accretion
      of related party note payable discount
                    
                    9,090Depreciation expense
                    
                    5,278Adjustments to reconcile net loss to net cash providedby operating activities:Accrued liabilities
                    
                    254,814Net cash used in operating activities
                    
                    (589,221)Cash
      flows from investing activities:Investments in limited liability entities
                    
                    (19,925)Payments to minority interest
                    
                    (8,750)Net
      cash used in investing activities
                    
                    (28,675)Cash
      flows from financing activities:Proceeds from related party notes payable
                    
                    583,439Payments
      on releated party loans payable
                    
                    (3,698)Capital contribution
                    
                    12,857Repayment of note payable
                    
                    (15,000)Proceeds from issuance of Series A Preferred Stock
                    
                    42,436Proceeds from issuance of common stock
                    
                    17,180Net
      cash provided by financing activities
                    
                    637,214Net
      increase (decrease) in cash for the period
                    
                    19,318Beginning
      cash at inception
                    
                    -Cash
      at the end of the period
                    
                    $                      19,318
 Supplemental
      disclosure of cash flow information:Cash
      paid during the period for interest
                    
                    $                       7,009Supplemental
      disclosure of non cash
                      investing
      and financing activitiesReal
      estate contributed by related parties
                    
                    $1,585.000Related
      party mortgages assumed by the Company
                    
                    $1,374,850Issuance
      of note payable for acquisition of
                      Doblado
                    
                    $                     95,000Issuance
      of common stock for repayment of
                      note
      payable
                    
                    $                       3,000
 The accompanying notes are an
integral part of the consolidated financial
statements.
 MEZEY
HOWARTH RACING STABLES, INC.
 (Formerly
MH 1, Inc.)
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
   NOTE
1 – HISTORY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  History
  Mezey
Howarth Racing Stables, Inc. (the "Company"), formerly MH 1, Inc., was
organized under the laws of the State of Nevada on February 27, 2007. On June
12, 2007, the Company changed its name to Mezey Howarth Racing Stables,
Inc.  The Company's business is the buying, selling and racing
thoroughbred race horses of every age from broodmares, weanlings, and yearlings
to racing age horses. The Company operates in four different areas in the horse
racing industry.  The four areas include: (1) Claiming, (2) Racing
allowance and stake level horses, and (3) breeding of thoroughbreds. 
Initially we are focusing on the claiming aspect of the business model while we
develop a barn of stake level horses and yearlings. The Company's California
Horse Racing Board license number is 293137. During
September 2007, the Company exited the development stage as defined in Financial
Accounting Standards Board Statement No. 7 due to the commencement of intended
operations and the generation of revenues from such
operations.
  Cash
Equivalents
  Management
considers all highly-liquid investments with an original maturity of three (3)
months or less to be cash equivalents.
  Going
Concern and Plan of Operation
  The
Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The Company just exited the
development stage and has not earned any significant revenues from operations as
of December 31, 2007.   It is the Company’s plan to become profitable
through the acquisition of at least 50 horses and to earn revenues from racing
these horses.  To finance these planned acquisitions, the Company has plans
to raise $1,000,000 in capital through either debt or equity
offerings.  There are no assurances that management will be able to
raise these funds, to obtain 50 horses or generate sufficient revenues from
racing these horses to achieve profitability. These conditions raise substantial
doubt about its ability to continue as a going concern.
  Revenue
Recognition
  Revenue
is recognized when persuasive evidence of an arrangement exists, when title and
risk of ownership passes, the sales price is fixed or determined and
collectibility is reasonably assured.  The Company currently has three
different revenue sources from horse racing: 
Claiming, Allowance/Stakes, and Investment in other's
horses.
  Claiming
  The
Claiming Division entails the acquisition of horses that are intended to be
resold through Claiming Races.  The Company treats these horses as
inventory and receives income from the sale and purse winnings from these
horses.  The Company accounts for the cost of the acquisition, training
fees, veterinarian fee and other fees associated to the horses as cost of goods
sold ("COGS").
  Allowance/Stakes
  The
Allowance/Stakes Division entails the acquisition of horses that are not
intended to be resold but raced in Allowance and Stakes level races.  The
Company accounts as revenue any and all purse winnings.  Since the horse is
not intended to be resold only the gain or loss from the sale of the
horse is accounted for and not the entire sales amount.  Any expenses
associated to these horses are accounted as COGS.
  Investment
in Other's Horses
  The
Company accounts pursuant to section Investment in Limited Liabilities Entities
as stated below.
 Principles
of Consolidation
 The
consolidated financial statements include the accounts of the Company and its
wholly-owned and partially owned subsidiaries. The Company uses the
consolidation method of accounting for companies where its ownership is over 50%
and for other ventures and partnerships in which a controlling interest is held.
All significant inter-company transactions have been
eliminated.
  Investment
in Limited Liability Entities
  The
Company makes strategic investments in companies, LLPs and LLCs that
own race horses. Investments in corporate entities with less than a 20% voting
interest are generally accounted for under the cost method. The cost method is
also used to account for investments that are not in-substance common stock. The
Company uses the equity method to account for investments in common stock or
in-substance common stock of corporate entities, including limited liability
corporations that do not maintain specific ownership accounts, in which it has a
voting interest of 20% to 50% or in which it otherwise has the ability to
exercise significant influence, and in partnerships and limited liability
corporations that do maintain specific ownership accounts in which it has other
than minor to 50% ownership interests. Under the equity method, the investment
is originally recorded at cost and adjusted to recognize the Company's share of
net earnings or losses of the investee, limited to the extent of the Company's
investment in and advances to the investee and financial guarantees on behalf of
the investee that create additional basis.
  The
Company regularly monitors and evaluates the realizable value of its
investments. If events and circumstances indicate that a decline in the value of
these assets has occurred and is other-than-temporary, the Company records a
charge to investment income (expense). As of December 31, 2007, the Company does
not believe there is an impairment of the carrying value of their
investments.
 Income
Taxes
  The
Company uses the liability method of accounting for income taxes pursuant to
Statement of Financial Accounting Standards No. 109. Under this method, deferred
income taxes are recorded to reflect the tax consequences in future years of
temporary differences between the tax basis of the assets and liabilities and
their financial amounts at year end.  As of December 31, 2007, the
Company’s deferred tax assets consisted of net operating losses of $922,903, tax
effect loss of $341,804.  The Company has provided a valuation allowance in
the full amount of the deferred tax asset since there is no assurance of future
taxable income. Tax deductible losses can be carried forward for 20 years until
utilized for federal income tax purposes expiring in 2027.
  In July
2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation
No. 48, “Accounting for Uncertainty in Income Taxes— an interpretation of FASB
Statement No. 109 ("FIN 48")”. FIN 48 clarifies the accounting for uncertainty
in income taxes recognized in an enterprise's financial statements in accordance
with SFAS No. 109, Accounting for Income Taxes. FIN 48 describes a recognition
threshold and measurement attribute for the recognition and measurement of tax
positions taken or expected to be taken in a tax return and also provides
guidance on derecognition, classification, interest and penalties, accounting in
interim periods, disclosure and transition. FIN 48 is effective for fiscal years
beginning after December 15, 2006. The cumulative effect of adopting FIN 48 is
required to be reported as an adjustment to the opening balance of retained
earnings (or other appropriate components of equity) for that fiscal year,
presented separately. The adoption of FIN 48 did not have a material impact to
the Company’s financial statements.
  Per
Share Information
  Basic per
share information is computed based upon the weighted average number of common
shares outstanding during the period. Diluted per share information consists of
the weighted average number of common shares outstanding, plus the dilutive
effects of options and warrants calculated using the treasury stock method. In
loss periods, dilutive common equivalent shares are excluded as the effect would
be anti-dilutive. There are no options and warrants outstanding. The Series A
Convertible Preferred Stock converts into 25,258,555 shares of Common Stock
and have been excluded from the diluted net loss per share for the period from
February 27, 2007 (Inception) to December 31, 2007, as the effects would have
been anti-dilutive.
    
  Fair
Value of Financial Instruments
  Financial
instruments are recorded on the consolidated balance sheets. The carrying amount
for accounts payable and accrued expenses approximates fair value due to the
immediate or short-term maturity of these financial instruments. The fair value
of long-term debt approximates the carrying amounts based upon our expected
borrowing rate for debt with similar remaining maturities and comparable
risk.
  Long-Lived
Assets
  The
Company depreciates horses that it acquires a 50% or greater position
in.  The Company depreciates the horse via straight line depreciation over
its useful life of nine years.  The Company reviews its fixed assets
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an asset
to the future undiscounted operating cash flow expected to be generated by the
asset. If such assets are considered to be impaired, the impairment to be
recognized is measured by the amount by which the carrying amount of the asset
exceeds the fair value of the asset. Long-lived assets to be disposed of are
reported at the lower of carrying amount or fair value less costs to
sell.
 Use
of Estimates in the Preparation of Financial
Statements
  The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting periods.
Actual results could differ from those estimates and
assumptions.
  New
Accounting Pronouncements
  SFAS
No. 141R, Business Combinations
  In
December 2007, the FASB issued Statement of Financial Accounting Standards No.
141(R), Business
Combinations (SFAS No. 141R). SFAS 141R will significantly change the
accounting for and reporting of business combination transactions in
consolidated financial statements. SFAS 141R retains the fundamental
requirements in Statement 141, Business
Combinations while providing additional definitions, such as the
definition of the acquirer in a purchase and improvements in the application of
how the acquisition method is applied. This Statement becomes effective January
1, 2009. Early adoption is not permitted. We are currently evaluating the impact
this guidance will have on our consolidated financial statements.
  SFAS
No. 157, Fair Value Measurements
  In
September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements (SFAS No. 157). This statement defines fair value as used in
numerous accounting pronouncements, establishes a framework for measuring fair
value in GAAP and expands disclosure related to the use of fair value measures
in financial statements. SFAS No. 157 does not expand the use of fair value
measures in financial statements, but standardizes its definition and guidance
in GAAP. The standard emphasizes that fair value is a market-based measurement
and not an entity-specific measurement based on an exchange transaction in which
the entity sells an asset or transfers a liability (exit price). SFAS No. 157
establishes a fair value hierarchy from observable market data as the highest
level to fair value based on an entity's own fair value assumptions as the
lowest level. SFAS No. 157 became effective for our financial statements
starting January 1, 2008. It does not have a significant impact on our results
of operations and financial condition at this time.
  SFAS
No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities
  In
February 2007, the FASB issued SFAS No. 159, The Fair Value
Option for Financial Assets and Financial Liabilities. SFAS No. 159
provides an entity with the option, at specified election dates, to measure
certain financial assets and liabilities and other items at fair value, with
changes in fair value recognized in earnings as those changes occur. SFAS No.
159 also establishes presentation and disclosure requirements that include
displaying the fair value of those assets on the face of the balance sheet and
providing management's reasons for electing the fair value option for each
eligible item. The provisions of SFAS No. 159 are effective beginning January 1,
2008. It does not have a significant impact on our results of operations and
financial condition at this time.
  NOTE 2
- INVESTMENTS
  As of
December 31, 2007, the Company's investments in the Horses are done
through the acquisition of interest in LLP or LLC that own the horse. 
Each LLP or LLC owns a single horse and its sole business plan is the business
of that horse.  Upon the death or sale of the horse, the LLP or LLC will be
dissolved and the proceeds will be distributed to the members.  All
investments at December 31, 2007, were accounted for under the cost method due
to the Company not have significant influence over any of the entities. The
Company currently has invested the following amounts and percentages of the LLP
or LLC:
  The
      Emerald King
                        
                        $  6,000
                        25%Valondra
      (Partnership 56, LLP)
                        
                        11,375
                        35%Three
      Across (Partnership 52, LLP):
                        
                        1,425
                        5%Angela's
      Rainbow & Ops Overload:
                        
                        900
                        10%Roar
      in Solana (Partnership 57, LLP):
                        
                        225
                        1%Total
      Invested
                        
                        $19,925
  The
Company acquired 100% interest in Blushing Bear Cat through a claming race at
Del Mar for $21,150.  The Company proceeded to sell 35% of its interest in
Blushing Bear Cat to Trans Atlantic Racing Stable for $7,543.  At a
subsequent race, Blushing Bear Cat was claimed. The Company recognized a gain on
the sale of approximately $2,500 and distributed to Trans Atlantic Racing Stable
its share of the proceeds of
$8,500.
 NOTE 3
– NOTE PAYABLE
  On July
31, 2007, the Company purchased a horse with a note payable in the amount
of $95,000.  The note bears no interest and is due on December 31,
2008.  The Company made payments of $18,000 against the note during
the period from February 27, 2007 (inception) through December 31,
2007.
  See Note
6 for discussion of mortgages payable.
  NOTE 4
- COMMITTMENTS
  On
October 8, 2007, the Company entered into an agreement with a consulting firm
named Renegade Farms whereby the firm would assist the company in searching
for horses throughout the world for the Company to purchase or to make
investments in.  Total amounts paid to Renegade Farms for the period
from February 27, 2007 (Inception) through December 31, 2007 under the contract
were $500,000. This agreement expired as December 31, 2007.
  NOTE 5
- STOCKHOLDERS' DEFICIT
  Common
Stock
 On March
14, 2007, the Company sold for 150,000 shares of its common stock to
various investors for $2,180 in cash. The proceeds were mostly used to pay
expenses.
  In July
2007, the Company issued 2,525,855 shares of Series A Convertible Preferred
Stock to Mezey Howarth Group in exchange for $42,435 in cash and $210,150 net
real estate contributed to the Company. See Note 6 for additional information
regarding the transfer of the real estate.
  On July
25, 2007, the Company issued 5,000,000 shares of it $0.001 par value common
stock in exchange for $50,000 in accrued salaries to it officers at $0.01 per
share price, the deemed fair value of the Company’s common stock on the date of
issuance.
  On July
30, 2007, 300,000 shares were issued in exchange for the purchase of a horse
named Doblado valued at $3,000 or $.01 per share price, the deemed fair value of
the Company’s common stock on the date of issuance. The value of the common
stock issued for Doblado was offset against the note payable resulting from
Doblado's purchase
  On July
31, 2007, the Company sold 1,650,000 shares of common stock to various
investors for $15,000n cash.
  August
15,  2007, the Company issued 575,000 shares of its $0.001 par value
common stock to consultants that assist the Company in identifying horses to
acquire for $5,750 in services at $0.01 per share price, the deemed fair value
of the Company’s common stock on the date of issuance..  The fair value of
the common stock was expensed immediately as these shares were fully vested and
the consultant did not have any further obligation to perform.
  See Note
7 for discussion of subsequent events.
  Stock
Option Plan
  The
Company's Incentive Stock Plan ("Incentive Plan") was adopted in 2007. An
aggregate of 14,000,000 shares of common stock were reserved for issuance
pursuant to the Incentive Plan. The Incentive Plan is administered by the Board
of Directors. The Board of Directors determines, subject to the provisions of
the Incentive Plan, the employees to whom incentives are awarded. The Board of
Directors may award (i) "incentive stock options" within the meaning of Section
422 of the Internal Revenue Code of 1986, (ii) "non-qualified stock options"
(options which do not meet the requirements of Section 422), (iii) shares of
"restricted stock", (iv) stock grants and (v) "stock bonuses". Subject to the
terms of the Incentive Plan, the Board of Directors will also determine the
prices, expiration dates and other material features of the incentive awards. As
of December 31, 2007, 575,000 shares of common stock were issued under the
Incentive Plan.
  Preferred
Stock
  The
Company's Board of Directors approved the issuance of its Series A Convertible
Preferred Stock.  The Series A Convertible Preferred Stock provides for
voting rights of 20 to one and conversion rights of ten to one.  As of
December 31, 2007, there have been 2,525,855 shares of Series A Convertible
Preferred Stock authorized, issued, and outstanding. See Note 6 for discussion
of the issuance.  The Series A Convertible Preferred Stock has preferences
in liquidation but not with regard to dividends.
 
 NOTE 6
- RELATED PARTY TRANSACTIONS
  Purchase of
Horses
  The
initial purchases of horses where purchased from Paul Howarth.  The
transactions where conducted at the purchase price that Mr. Howarth
paid.  Total amounts paid to Paul Howarth related to these transactions
were $2,950.
  Purchase of
Series A Convertible Preferred Stock
  In July
2007, the Company received a promissory note from The Mezey Howarth Group for
$252,585 in cash and real estate in exchange for 2,525,855 shares of Series A
Convertible Preferred Stock.
  In July
2007, the Company’s majority shareholders, J. Wade Mezey and Paul Howarth,
deeded three real estate parcels to the Company.  As a result of these
transactions the Company received $1,585,000 in assets and $1,374,850 in
liabilities.  These transactions where accounted for on the carry over
basis; the original cost of the acquired assets by these
related parties.  The mortgage underlying the liabilities currently
have interest rates ranging from 6.5% - 11.5% and are interest only notes until
July 1, 2008, June 1, 2010, and August 1, 2011. The mortgages are
secured by the underlying properties and are not crossed secured by the
non-underlying properties.  The mortgages have been personally secured by
the officers of the Company.  On April 1, 2008, the Company and
shareholders rescinded the contribution. In connection with the rescindment the
shareholders returned 2,101,500 shares of Series A Convertible Preferred stock
and the Company transferred back the real estate and related mortgages to the
shareholders. The Company is currently assessing the accounting for this
transaction. The Series A Convertible Preferred was valued at approximately
$2,521,800 at the rescindment date, where the real estate had a net carrying
value of $210,150.  The following is a summary of the real estate
contributed and mortgages assumed.
  Real
      Estate
                  
                  MortgageLa
      Quinta
                  $                           650,000
                  
                  $                           594,850Temecula
                  615,000
                  
                  492,000Willow
      Springs
                  320,000
                  
                  288,000$                         1,585,000
                  
                  $              
                1,374,850
 
 Shareholder
Notes Payable
  In
September 2007, the Company received loans from Wade Mezey in the amount of
$500,000 and from Cindy Howarth in the amount $20,000 to be used for
operations.  These notes are due on December 31, 2008 and incur no
interest. Upon funding, the Company recorded imputed interest of $45,455 at 10%
as a discount to the note and is amortizing until maturity. For the period from
February 27, 2007 (Inception) to December 31, 2007, the Company amortized $9,091
of the discount to interest expense. The note payable to J. Wade Mezey was
converted into common stock in January 2008, see Note 7 for additional
information.
  In
addition, in November and December 2007, Wade Mezey loaned the Company an
additional $59,739 for operating purposes. The loans are due on demand and incur
no interest. See Note 7 for additional advances subsequent to December 31,
2007.
  NOTE 7
- SUBSEQUENT EVENTS
  January
11, 2008, the Company issued 1,000,000 shares of common stock to J. Wade Mezey
in satisfaction of $100,000 in accrued compensation. The common stock was valued
at $0.10 on the date of the conversion based on the deemed fair market value of
the Company’s common stock.
  January
11, 2008, the Company issued 1,000,000 shares of common stock to Paul Howarth in
satisfaction of $100,000 in accrued compensation. The common stock was valued at
$0.10 per share on the date of the conversion based on the deemed fair market
value of the Company’s common stock.
  January
11, 2008, the Company issued 2,000,000 shares of common stock to Renegade Farms
valued at $300,000. The common stock was issued in connection with a consulting
agreement, whereby Renegade Farms will be assisting the company in searching for
horses throughout the world and collecting samples of blood and tissue from
various horses for genetic testing and DNA profiling.  The common
stock was valued at $0.15 per share based on the deemed fair market value of the
Company’s common stock on the date of the transaction. Under the agreement
Renegade Farms does not have any future performance conditions related to the
common stock and thus, the Company expensed the value of the common stock on the
date of the transaction.
  January 11, 2008, the
Company converted the $500,000 note payable due to J. Wade Mezey into 5,000,000
shares of Series A Convertible Preferred Stock at $0.10 per share. Of these
shares, 2,500,000 shares were issued J. Wade Mezey and Paul Howarth. As a result
of the conversion, $250,000 was recorded a interest expense based on the fair
market value on the date of the transaction.
 On January 15, 2008, the Company issued 3,810,000 shares
of common stock to a consultant for services related to the promotion of the
Company’s horses. The Company valued the common stock at $0.155 per share,
totaling $600,000 based on the fair market value of the Company’s common stock
on the date of the transaction. Under the agreementthe consultant does
not have any future performance conditions related to the common stock and thus,
the Company expensed the value of the common stock on the date of the
transaction.
  January
21, 2008, the Board of Directors voted to increase the number of authorized
common shares to 180,000,000 and preferred shares to 20,000,000.
  On January
28, 2008, the Company entered into an Investment Agreement with
Dutchess also referred to as an Equity Line of Credit. Pursuant to Sections
2(a) and 2(b) of that agreement, following notice to Dutchess, we may put to
Dutchess up to $10 million in shares of our common stock for a purchase price
equal to 93% of the lowest closing bid price of our common stock during the five
day period following that notice. Each put will be equal to either (a) 200% of
the average daily volume of our common stock for the three trading days prior to
the put notice date, multiplied by the average of the three daily closing best
bid prices immediately preceding the Put or (b) $250,000. To date no proceeds
from the agreement have been received.
  Effective
February 1, 2008, the Company entered into new employment agreements with J.
Wade Mezey and Paul Howarth. The term of each agreement is five years. Under the
terms of the agreement, each individual will receive a base annual salary of
$360,000, $100,000 bonus payable on the effective date of the agreement that is
convertible into common stock at the fair market value of the Company’s common
stock on the date of the agreement; $200,000 retention bonus at the end of each
year the employee is employed; and if termination is without cause the employee
has a right to be paid up to twelve months of salary.
  On
February 4, 2008, the Company entered into a letter of intent to acquire ABTTC,
Inc. for $7,750,000.  ABTTC, Inc. provides drug and alcohol rehabilitation
services. It was intended that upon closing of the transaction, ABTTC, Inc. will
become a wholly owned subsidiary of Mezey Howarth Racing Stables, Inc. 
Paul Howarth is a shareholder of ABTTC, Inc. and has abstained from all
negotiations related to the transactions and did not vote on the
transaction.  In addition, the Company issued 9,722,223 shares of
common stock valued at $1,750,000, or $0.18 per share, to ABTTC, Inc. as the
initial payment for the acquisition.  Paul Howarth received 30% of the
shares of common stock.  The fair value of the Company’s common stock was
determined by using the closing market price of the Company’s common stock on
the date of issuance. The remaining amount under the proposed acquisition is
will be paid over the next 18 months from the date of close. On March 31, 2008,
the Company terminated the pending transaction due to the desire to focus on the
horse racing operations before expanding into other business segments. The
initial payment of 9,722,223 shares of Company are non-recoverable and
served as a break up fee in the event the Company did not close on the
transaction without cause. The break up fee was based on ABTTC having received
previous cash offers to be acquired and in exchange for ABTTC acting exclusively
with the Company. In connection, with the termination the Company forfeited the
common stock issued and will record an expense of $1,750,000.
  On April 1, 2008, the Company
transferred title of the real estate deeded from the founders in July 2007 back
to the founders.  In exchange, the founders agreed to exchange the previous
compensation given to them upon transfering the propoperties in July
2007.
 From
January 1, 2008 through April 11, 2008, Wade Mezey has lent the Company
an additional $49,397 for operating expenses.