KOGETO, INC. - FORM 10-K - April 15, 2010

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EX-31.1 - KOGETO, INC.	v181131_ex31-1.htm
EX-32.1 - KOGETO, INC.	v181131_ex32-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x	ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2009

¨	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission file number

NORTHEAST AUTOMOTIVE HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Nevada	65-0637308
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2174 Hewlett Avenue, Merrick, New York	11566
(Address of principal executive offices)	(Zip Code)

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

Securities registered under Section 12(b) of the Exchange Act:

Title of each class	Name of each exchange on which registered
None	None

Securities registered under Section 12(g) of the Exchange Act:
Common Stock, par value $.0001
(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 the Securities Act.

Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes o No x

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) 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. x 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 definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer o	Accelerated Filer o

Non-Accelerated Filer o	Smaller reporting company x
(Do not check if a smaller reporting company)

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

State issuer’s revenues for its most recent fiscal year. $16,692,590

The aggregate market value of common stock held by non-affiliates of the Registrant on December 31, 2009 based on the closing price on that date of $0.06 on the Over the Counter Bulletin Board was $19,240. For the purposes of calculating this amount only, all directors, executive officers and shareholders owning in excess of ten percent (10%) of the Registrant’s outstanding common stock have been treated as affiliates.

Number of shares of the registrant’s common stock outstanding as of March 31, 2010: 554,017 shares of Common Stock.

TABLE OF CONTENTS

		Pg
Part I

Item 1.	Business.	3

Item 1A	Risk Factors	7

Item 1B	Unresolved Staff Comments	8

Item 2.	Properties	8

Item 3.	Legal Proceedings.	9

Item 4.	Submission of Matters to a Vote of Security Holders.	9

Part II

Item 5.	Market for Common Equity and Related Stockholder Matters, and issuer Purchases of Equity Securities.	9

Item 6	Selected Financial Data	9

Item 7.	Management’s Discussion and Analysis of Financial Condition and Plan of Operations.	9

Item 7A	Quantitative and Qualitative Disclosures About Market Risk	15

Item 8.	Financial Statements.	F-1

Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	16

Item 9A.	Controls and Procedures.	16

Item 9B.	Other Information.	16

Part III

Item 10.	Directors, Executive Officers, of the Registrant.	17

Item 11.	Executive Compensation.	18

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	19

Item 13.	Certain Relationships and Related Transactions and Director Independence.	20

Item 14.	Principal Accountant Fees and Services	20

Part IV

Item 15.	Exhibits and Financial Statement Schedules	20

Signatures		21

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

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

PART I

Item 1. Business

BACKGROUND

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

OUR BUSINESS

The Company currently seeks to exploit its 13 years of experience in the wholesale automobile industry and the inefficiencies and geographic differences in the used vehicle market by purchasing high quality, late model used vehicle from dealers and institutional sellers in Northeastern states and transporting the vehicles for resale in the Pacific Northwest . We are involved only in the wholesale purchase and sale of vehicles acting as a middleman between various dealer and institutional sellers and dealer purchasers. We generally sell our vehicles only through established third-party auctions which act as a marketplace for used vehicles. We thus help align institutional used vehicle sellers and wholesale buyers over a wide geographic area.

During our last audited year, which ended December 31, 2009, we had total revenue of $16,692,590 and a net profit of $297,603.

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

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

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

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

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

INDUSTRY OVERVIEW

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

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

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

OUR SALES AND DISTRIBUTION METHODS

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

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

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

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

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

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

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

The average time it takes to ship a vehicle is five days. Our shipping costs are partially dependant on the price of fuel and may rise or fall depending upon the then-current fuel costs at any point in time and as of December 31, 2009, our average cost to ship a vehicle is $194 per vehicle. Once our vehicles are shipped to the third party auction locations, they are cleaned and minor repairs, if necessary, are made by third party contractors who are provided by the auction houses as add-on services available to all of its sellers.

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

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

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

Growth Strategy

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

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

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

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

Optimizing profit per vehicle sold . In 2009, we had a net profit per car sold of $239.42. We plan to increase our average profit per car by negotiating better terms from sellers and by reducing transportation costs through greater volume commitments to shippers and through the possible utilization of railroad shipping for vehicles which are now available to us due to the larger number of vehicles that we now ship.

COMPETITIVE STRENGTHS

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

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

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

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

COMPETITION

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

INTELLECTUAL PROPERTY PROTECTION

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

GOVERNMENTAL REGULATION

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

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

EMPLOYEES

As of December 31, 2009, we had five full and part time employees, including two in Sales and Support and three in Administration. In addition, we have on-going relationships with six contactors who work as sales representatives for the Company. Although talented and qualified employees are difficult to find in the current tight job market, we have experienced relative success in attracting and retaining highly motivated and talented employees.

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

SUBSIDIARIES

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

ITEM 1A. RISK FACTORS

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

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

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

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

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

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

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

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

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

We Currently Have Just One Director . Our Board of Directors is currently comprised of just one member, our Chief Executive Officer William Solko. Thus, without any independent directors, conflicts of interest between the Company and our Chief Executive Officer may occur regarding issues such as executive compensation. We intend to increase the size of the Board of Directors in 2010.

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

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

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

Patent and Trademarks

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

Governmental Regulations

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

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

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

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

ITEM 1B. Unresolved Staff Comments

Not applicable

Item 2.

Properties

Our executive offices are located at 2174 Hewlett Avenue, Suite 206, Merrick, New York 11566. The Company rents office space on a month-to-month basis at two locations and beginning during 2008, warehouse and storage spaces on a month-to-month basis. Rent expense was approximately $42,816 for 2009, $34,500 for 2008 and $7,200 for 2007. At December 31, 2009, future minimum lease payments were $2,800 for 2010. We believe that these spaces are sufficient and adequate to operate our current business.

Item 3.

Legal Proceedings.

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

Item 4.

Submission of Matters to a Vote of Security Holders.

None.

PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities.

Market Information

Our common stock is currently quoted on the Over the Counter Bulletin Board (“OTC BB”) under the symbol NEAU. There is a limited trading market for our common stock. The low and high share price between September 2008 and December 2008 was $0.08 and $1.05.

Dividends

Holders of our common stock are entitled to receive dividends if, as and when declared by the Board of Directors out of funds legally available therefore. We have never declared or paid any dividends on our common stock. We intend to retain any future earnings for use in the operation and expansion of our business. Consequently, we do not anticipate paying any cash dividends on our common stock to our stockholders for the foreseeable future.

Recent Sales of Unregistered Securities

None.

Item 6.

Selected Financial Data

Not Applicable

Item 7.

Management’s Discussion and Analysis or Plan of Operations.

MANAGEMENT'S DISCUSSION AND ANALYSIS

The following discussion and analysis addresses material changes in the results of operations and financial condition of Northeast Automotive Holdings, Inc. and Subsidiaries (the "Company" or " we " ) for the periods presented. This discussion and analysis should be read in conjunction with the Consolidated Financial Statements, the related Notes to Consolidated Financial Statements and Management's Discussion and Analysis of Results of Operations and Financial Condition included in the Company's Form 10-K for the fiscal year ended December 31, 2009, the unaudited interim Condensed Consolidated Financial Statements and related Notes included in Item I of this Report on Form 10-Q ("Form 10-Q") and the Company ' s other SEC filings and public disclosures.

This Form 10-K may contain “forward-looking statements”. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may include, without limitation, statements about the Company’s market opportunities, strategies, competition and expected activities and expenditures, and at times may be identified by the use of words such as “may”, “will”, “could”, “should”, “would”, “project”, “believe”, “anticipate”, “expect”, “plan”, “estimate”, “forecast”, “potential”, “intend”, “continue” and variations of these words or comparable words. Forward-looking statements inherently involve risks and uncertainties. Accordingly, actual results may differ materially from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the risks described below under “Risk Factors” in Part I, Item 1b. The Company undertakes no obligation to update any forward-looking statements for revisions or changes after the date of this Form 10-K.

Overview

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

LIQUIDITY AND CAPITAL RESOURCES

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

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

For the Year Ended December 31, 2009, and 2008

The following table sets forth certain data derived from the consolidated statements of operations, expressed as a percentage of net revenues for each of the year ended December 31, 2009, 2008, and 2007.

ANNUAL RESULTS OF OPERATIONS	Years Ended December 31
	2009					2008
(In thousands)	Amount		%			Amount			%
Net Revenues	$	16,693		100.00	%	$	43,015			100.00	%
Cost of Revenues		15,555		93.19	%		42,796			99.49	%
Gross Profit		1,138		6.81	%		219			0.51	%
Sales, general and administrative expenses		601		3.59	%		724			1.68	%
Other expenses		239		1.43	%		642			1.49	%
Total costs and expenses		840		5.02	%		1,366			3.18	%
Profit (loss) from operations	$	298		1.79	%	$	(1,146	)		(2.67	)%

Revenues

Revenue for the year ended December 31, 2009 were $16,692,590, a decrease of $26,322,861 or 61.2% over revenues for the year ended December 31, 2008 of $43,015,451. The decrease in revenue was a result of a decrease in the number of vehicles we sold in the year 2009 over 2008. Specifically, in the year ended December 31, 2009, we sold 1,243 vehicles at an average sales price of $13,429 as compared to 3,002 vehicles at an average sales price of $14,329 during the comparable period in 2008. The sharp decrease in revenues was due to a continued dramatic slowdown in the auto industry in 2009. As gas prices rose steadily, and economic conditions worsened, we experienced a significant drop in demand for used vehicles. Sales of light trucks and sport utility vehicles, our core product, dropped sharply. As dealers nationwide scrambled to sell off their light truck and SUV inventory, prices plummeted. This led to a glut of these types of vehicles in the market and a further erosion of vehicle values. We continued in 2009 to see little demand for these vehicles. We expended tremendous amounts of time and energy attempting to market our existing inventory, which prevented us from buying and selling new inventory which would have offset the dramatic drop in revenues we reported.

Cost of Revenues and Gross Profit Margin

The Company's cost of revenues is composed primarily of the cost of purchasing vehicles for resale. Cost of revenues was $15,555,099 or 93.2% of net revenues during the year ended December 31, 2009, a decrease of $27,240,512, as compared to $42,795,611 or 99.5% for the comparable period in 2008. Thus, our gross margin was 6.80% for the year ended December 31, 2009 as compared to 0.51 % for the comparable period in 2008. The decrease in our cost of revenue is attributable to a decrease in the number of the vehicles sold during the year ended December 31, 2009 as compared to the comparable period in 2008. The decrease in the number of units sold was the result of higher fuel prices, and worsening economic conditions, which led to a dramatic drop in demand for our core product, light trucks and sport utility vehicles.

Operating Expenses

Our operating expenses are comprised primarily of salaries, consulting fees and sales, general and administrative expenses.

Sale, General and Administrative

Sale, general and administrative ("SGA") expenses are composed principally of commission, salaries of administrative personnel, fees for professional services and facilities expenses. These expenses were $600,729 for the year ended December 31, 2009 or 3.60% of net revenue as compared to $724,132 or 1.68 % of net revenue for the comparable period in 2008, a decrease in such expenses of $123,403 or (17.04%). The decrease in the ratio of SGA expenses to net revenue was primarily due to a decrease in operating expenses. As the slowdown in the used vehicle industry took hold, we made every attempt to reduce our expenses wherever we saw fit. Most significantly, we reduced our workforce. This reduction included the elimination of full time salaried positions, as well as the termination of our relationship with certain subcontracted personnel.

Other Expenses

Our combined expenses for officers salaries, consulting fees and interest was $239,159 for the year ended December 31, 2009 or 1.43% of net revenue compared to the comparable period in 2008 when such expenses were $642,019 or 1.49% of net revenue. The decrease in such expenses is attributable to decreased officers’ salaries and interest expense.

Our combined expenses for officers salaries, consulting fees and interest was $642,019 for the year ended December 31, 2008 or 1.49% of net revenue compared to the comparable period in 2007 when such expenses were $945,649 or 1.28% of net revenue. The decrease in such expenses is attributable to decreased officers’ salaries, consulting fees and interest expenses. The following table shows the changes in the components these expenses during the comparable periods.

ANNUAL OPERATING EXPENSES	Year Ended		Year Ended		Variance
	December 31, 2009		December 31, 2008		Amount			%

Sale, General and Administrative Expenses	$	600,729		724,352	$	(123,623	)		(17.07	)%
Officers Salaries		92,026		315,955		(223,929	)		(70.87	)%
Consulting Fees		-		20,000		(20,000	)		(100.00	)%
Interest Expense		147,133		306,064		(158,931	)		(51.93	)%
Total Costs and Expenses	$	839,888		1,366,371	$	(526,483	)		(38.53	)%

Operating Gain (Loss)

Operating profit (loss) from operations is calculated as our revenues less all of our operating expenses. Our operating profit (loss) for the year ended December 31, 2009 was $297,603 or 1.78% of net revenue as compared to an operating loss of ($1,146,311) or (2.67%) of net revenue for comparable period in 2008. This increase in operating gain was primarily as a result of an increase in gross revenues combined with a decrease in operating expense.

Off Balance Sheet Arrangements

There are no off-balance sheet arrangements.

Recent Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board (FASB) issued a standard that established the FASB Accounting Standards Codification (ASC) and amended the hierarchy of generally accepted accounting principles (ASC) and amended the hierarchy of generally accepted accounting principles (GAAP) such that the ASC became the single source of authoritative nongovernmental U.S. GAAP. The ASC did not change current U.S. GAAP, but was intended to simplify user access to all authoritative U.S. GAAP by providing all the authoritative literature related to a particular topic in one place. All previously existing accounting standard documents were superseded and all other accounting literature not included in the ASC is considered non-authoritative. New accounting standards issued subsequent to June 30, 2009 are communicated by the FASB through Accounting Standards Updates (ASUs). The Company adopted the ASC on July 1, 2009. This standard did not have an impact on the Company’s consolidated results of operations or financial condition. However, throughout the notes to the consolidated financial statements references that were previously made to various former authoritative U.S. GAAP pronouncements have been changed to coincide with the appropriate section of the ASC.

No other recently issued accounting standards will have an impact on its consolidated results of operations, financial position or cash flows.

For the Three Months Ended December 31, 2009 and December 31, 2008

The following table sets forth certain data derived from the unaudited consolidated statements of operations, expressed as a percentage of net revenues for each of the three month periods ended December 31, 2009 and December 31, 2008.

QUARTERLY RESULTS OF OPERATIONS	Three Months ended December 31
	2009					2008
(In thousands)	Amount		%			Amount			%
Net Revenues	$	3,591		100.00	%	$	4,629			100.00	%
Cost of Revenues		3,300		91.90	%		4,956			107.06	%
Gross Profit		291		8.1	%		(327	)		(7.06)	%
Sales, general and administrative expenses		152		4.23	%		155			3.35	%
Other expenses		16		0.45	%		94			2.03	%
Total costs and expenses		168		4.68	%		249			5.37	%
Profit (loss) from operations	$	123		3.42	%	$	(575	)		(12.43)	%

Revenues

Revenue for the three month period ended December 31, 2009 were $3,591,042 a decrease of $1,038,113 or 22.43 % as compared to revenues for the three month period ended December 31, 2008 of $4,629,155. The decrease in revenue was a result of a decrease in the number of vehicles we sold in the three month period in 2009 over 2008. Specifically, in the three month period ended December 31, 2009 we sold 236 vehicles at an average sales price of $15,216 as compared to 330 vehicles at an average sales price of $14,028 during the comparable period in 2008. Despite a significant drop in the price of fuel, market conditions did not improve as we had hoped they would in the fourth quarter. Relief from high fuel prices was met with a further worsening of the economy in general. Our customer’s appetite for our product did not return, and we were unable to successfully implement our business strategies.

Cost of Sales and Gross Profit Margin

The Company's cost of sales is composed primarily of the cost of purchasing vehicles for resale. Cost of revenues was $3,299,507 or 91.88% of net revenues during the three month period ended December 31, 2009 as compared to $4,955,906 or 107.06% for the comparable period in 2008, a decrease of $1,656,399 or 33.42%. Thus, our gross margin was 8.12% for the three month period ended December 31, 2009 as compared to (7.06%) for the comparable period in 2008. The decrease in our cost of revenue as a percent of revenue is attributable to a decrease in the cost of the vehicles sold during the three month period ended September 30, 2009 as compared to the comparable period in 2008. Our cost of sales and gross profit margin were impacted by our inability to purchase and sell vehicles in an unstable used vehicle market. Supply of late model used vehicles outstripped demand in the fourth quarter, and we were unable to find new customers given a market that was so overly saturated.

Operating Expenses

Our operating expenses are comprised primarily of salaries, consulting fees and sales, general and administrative expenses.

Sale, General and Administrative

Sale, general and administrative ("SGA'') expenses are composed principally of commission, salaries of administrative personnel, fees for professional services and facilities expenses. These expenses were $152,478 for the three month period ended December 31, 2009 or 4.25% of net revenue as compared to $154,882 or 3.35% of net revenue for the comparable period in 2008, a decrease in such expenses of $2,404 or (0.9%). The decrease in the ratio of SGA expenses to net revenue was primarily due to a decrease in operating expenses. We aggressively implemented cost saving measures in the fourth quarter of 2009 in an effort to reduce our operating expense. These measures included the elimination of full time positions, as well as the termination of our relationships with certain independent contractors.

Other Expenses

Our combined expenses for officers salaries, consulting fees and interest was $15,868 for the three month period ended December 31, 2009 or 0.44 % of net revenue compared to the comparable period in 2008 when such expenses were $93,849 or 2.03% of net revenue. The decrease in such expenses is attributable to decreased officers' salaries, interest expense and consulting fees in 2009. Given the challenges the company experienced in 2009, the company’s officers accepted a significant decrease in compensation in the third and fourth quarter of 2009 as compared to 2008. The following table shows the changes in the components of these expenses during the comparable periods.

QUARTERLY OPERATING EXPENSES	Three Months Ended				Variance
	December 31, 2009		December 31, 2008		Amount			%
Sale, General and Administrative Expenses	$	152,477		154,882	$	(2,405	)		(1.55)	%

Officers Salaries		-		34,756		(34,756	)		-	%

Consulting Fees		-		8,667		(8,667	)		-

Interest Expense		15,868		50,426		(34,558	)		(68.53)	%

Total Operating Expenses	$	168,345		248,731	$	(80,386	)		(32.32)	%

Operating Gain (Loss)

Operating gain or loss is calculated as our revenues less all of our operating expenses. Our operating gain for the three month period ended December 31, 2009 was $123,189 or 3.43% of net revenue as compared to an operating loss of ($575,482) or (12.43%) of net revenue for comparable period in 2008, a increased gain of $698,671. This increase in operating profit was primarily as a result of an increase in gross revenues which was greater than the decrease of operating expense.

Critical Accounting Policies and Estimates

Our management’s discussion and analysis of our financial condition and results of our operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires management to make estimates and judgments that affect the amounts reported for assets, liabilities, revenue, expenses and the disclosure of contingent liabilities. A summary of our significant accounting policies is more fully described in Note 2 to our consolidated financial statements included elsewhere in this Registration Statement.

Our critical accounting policies are those that we believe are both important to the portrayal of our financial condition and results of operations and that involve difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. The estimates are based on historical experience and on various assumptions about the ultimate outcome of future events. Our actual results may differ from these estimates in the event unforeseen events occur or should the assumptions used in the estimation process differ from actual results.

We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Revenue Recognition

Securities and Exchange Commission released Staff Accounting Bulletin No. 104, "Revenue Recognition" ("SAB 104"). All of our revenue is generated from the sales of used vehicles. We recognize revenue only when one of vehicles is sold at auction to a buyer and upon the occurrence of either the title being transferred or when buyer assumes the responsibility of ownership such as the risk of loss.

Allowance for Doubtful Accounts

All of our vehicles are sold through wholesale auctions houses. The terms of the auction sales require that payment be received by the seller prior to the title being transferred to the purchaser. Thus, we receive payment upon the sale of each vehicle and therefore, we do not maintain an allowance for doubtful accounts on our financial statements.

Income Taxes

We account for income taxes in accordance with Accounting Standards Codification (“ASC”) Topic 740 “Income Taxes” which requires an asset and liability approach for the financial accounting and reporting of income taxes. Under this method, deferred income taxes are recognized for the expected future tax consequences of differences between the tax bases of assets and liabilities and their reported amounts in the financial statements. These balances are measured using the enacted tax rates expected to apply in the year(s) in which these temporary differences are expected to reverse. The effect on deferred income taxes of a change in tax rates is recognized in income in the period when the change is enacted.

Based on consideration of all available evidence regarding their utilization, net deferred tax assets are recorded to the extent that it is more likely than not that they will be realized. Where, based on the weight of all available evidence, it is more likely than not that some amount of a deferred tax asset will not be realized, a valuation allowance is established for that amount that, in our judgment, is sufficient to reduce the deferred tax asset to an amount that is more likely than not to be realized.

Inventory

Inventory is stated at the lower of cost or market using the specific identification basis. Since we generally only own vehicles in our inventory for less than 14 days, we do not have to estimate the realizability of our inventory since it is generally 100% sold within 14 days.

Stock-Based Compensation

We do not maintain share-based incentive plans for our employees and have not granted any stock as compensation.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of December 31, 2009, we had cash and cash equivalents of $341,629 invested in standard bank checking accounts and highly liquid money market instruments. Such investments are subject to interest rate and credit risk. Such risks and a change in market interest rates would not be expected to have a material impact on our financial condition and/or results of operations. As of December 31, 2009, we had an outstanding balance of $325,588 on our revolving credit facility with Manheim Auto Financial Services, Inc. Borrowings under such revolving credit facility would bear interest at a variable rate equal to prime plus 2.0%. In addition, as of December 31, 2009, we had an outstanding balance of $100,000 on a bank revolving credit facility which bears interest at a variable rate equal to prime plus 1.0%.

Item 8. Financial Statements and Supplementary Data.

NORTHEAST AUTOMOTIVE HOLDINGS, INC

FINANCIAL STATEMENTS

DECEMBER 31, 2009

NORTHEAST AUTOMOTIVE HOLDINGS, INC

INDEX

		PAGE

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		F2

CONSOLIDATED BALANCE SHEETS		F4

CONSOLIDATED STATEMENTS OF OPERATIONS		F5

CONSOLIDATED STATEMENTS OF CASH FLOWS		F6

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)		F7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS		F8-F14

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

Northeast Automotive Holdings, Inc,

Merrick, New York

We have audited the accompanying consolidated balance sheet of Northeast Automotive Holdings, Inc. (the “Company”) as of December 31, 2009 and the related consolidated statements of operations, changes in stockholders’ deficit and cash flows for the year ended December 31, 2009. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatements. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2009 and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations, which raises substantial doubt about its ability to continue as a going concern. Management's plans regarding those matters are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

MaloneBailey, LLP

www.malonebailey.com

Houston, Texas

April 14, 2010

KEMPISTY & COMPANY

CERTIFIED PUBLIC ACCOUNTANTS, P.C.

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

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors

Northeast Automotive Holdings, Inc.

We have audited the accompanying consolidated balance sheets of Northeast Automotive Holdings, Inc. as of December 31, 2008 and the related consolidated statements of operations, changes in stockholders' equity (deficit) and cash flows for the yearended December 31, 2008. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required at this time, to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Northeast Auto Acceptance Corp. at December 31, 2008 and the results of its operations and its cash flows for the year ended December 31, 2008 in conformity with accounting principles generally accepted in the in the United States of America.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has an accumulated deficit of $4,349,817 and a working capital deficiency of $402,192 at December 31, 2008. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Kempisty & Company

Certified Public Accountants PC

New York, New York

April 15, 2009, except for Note 1, Note 3, Note 9 are as of August 6, 2009

NORTHEAST AUTOMOTIVE HOLDINGS, INC

CONSOLIDATED BALANCE SHEETS

	December 31,
	2009			2008
ASSETS
Current Assets:
Cash	$	341,629		$	934,118
Inventory		1,554,549			1,907,157
Total Current Assets		1,896,178			2,841,275

Equipment, net		16,251			21,698
Other assets		7,773			8,479

TOTAL ASSETS	$	1,920,202		$	2,871,452

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts payable	$	136,711		$	159,040
Note payable to bank		100,000			100,000
Credit line		325,588			198,006
Demand loans payable		770,861			904,246
Due to stockholders		584,115			1,746,269
Accrued expenses		75,023			133,946
Payroll taxes withheld and accrued		2,316			1,960
Total Current Liabilities		1,994,614			3,243,467

Commitments and contingencies		-			-

Stockholders' Deficit
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, 10,000,000 issued and outstanding		1,000			1,000
Common stock, $0.001 par value, 300,000,000 shares authorized, 554,017 shares issued and outstanding		554			554
Capital stock to be issued (500,000 shares)		20,000			20,000
Additional paid in capital		3,957,424			3,957,424
Deficit		(4,052,214	)		(4,349,817	)
		(73,236	)		(370,839	)
Less: Treasury stock (6,667 common shares)		(1,176	)		(1,176	)
Total Stockholders' Deficit		(74,412	)		(372,015	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	1,920,202		$	2,871,452

See Notes to Financial Statements

NORTHEAST AUTOMOTIVE HOLDINGS, INC

CONSOLIDATED STATEMENTS OF OPERATIONS

	2009		2008

Net sales	$	16,692,590	$	43,015,451

Cost of sales		15,555,099		42,795,611

Gross profit		1,137,491		219,840

Operating expenses:
Officers salaries		92,026		315,955
Consulting fees		-		20,000
Selling, general and administrative		600,729		724,132
Total operating expenses		692,755		1,060,087

Profit (loss) from operations		444,736		(840,247)

Interest expense		147,133		306,064

Net profit (loss)		297,603		(1,146,311	)

Deemed preferred dividend		-		401,061

Net income (loss) attributable to common stockholders	$	297,603	$	(1,547,372	)

Net income (loss) per common share, basic	$	0.430	$	(2.23	)

Weighted average number of shares outstanding, basic		692,879		692,879

Net income (loss) per common share, diluted	$	0.430	$	(2.23	)

Weighted average number of shares outstanding, diluted		692,879		692,879

See Notes to Financial Statements

NORTHEAST AUTOMOTIVE HOLDINGS, INC

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	2009		2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net profit (loss)	$	297,603	$	(1,547,372)	)
Adjustments to reconcile net loss to net cash provided (used) by operating activities:
Depreciation and amortization		5,447		5,113
Stock issued for consulting fees		-		20,000
Deemed preferred dividend		-		401,061
Changes in operating assets and liabilities:
Decrease in accounts receivable		-		407,589
Decrease in inventory		352,608		3,318,880
Increase in other assets		706		17,674
Decrease) in accounts payable		(22,329)		(139,128)
Decrease in accrued expenses		(58,923)		(239,411)
Increase (decrease) in payroll taxes		356		(138,694)
CASH PROVIDED (USED) BY OPERATING ACTIVITIES		575,468		2,105,712

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets		-		(3,347)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds of line of credit		3,355,179		5,113,005
Repayment of line of credit		(3,227,597)		(5,764,841)
Proceeds of stockholders loans				884,415
Repayment of stockholders loan		(1,162,155)		(643,854)
Proceeds of demand loans		-		257,214
Repayment of demand loans		(133,384)		(1,169,545)
Proceeds/(Repayments) on credit card loan		-		(173,299)
CASH PROVIDED (USED) BY FINANCING ACTIVITIES		(1,167,957)		(1,496,905)

NET INCREASE (DECREASE) IN CASH		(592,489)		605,460
CASH, beginning of year		934,118		328,658

CASH, end of year	$	341,629	$	934,118

SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for:
Income tax payments	$	-	$	-
Interest payments	$	194,362	$	306,064
NON-CASH FINANCING ACTIVITIES
Debt exchange for preferred stock	$	-	$	(100,000)
Preferred stock issued for debt	$	-	$	100,000
Deemed preferred dividend	$	-	$	401,061

See Notes to Financial Statements

NORTHEAST AUTOMOTIVE HOLDINGS, INC

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

	Preferred Stock				Common Stock						Capital Stock				Additional
	($.0001 par value)				($.001 par value)						to be issued				Paid-In					Treasury
	Shares		Amount		Shares			Amount			Shares		Amount		Capital		Deficit			Stock			Total
Balances, December 31, 2007		-		-		887,285			887			-		-		3,457,030		(2,802,445	)		(1,176	)		654,296

Reverse split adjustment (Note 9)		-		-		65			-			-		-		-		-			-			-

Cancellation of loan due to shareholder (Note 8)		10,000,000		1,000		(333,333	)		(333	)		-		-		99,333		-			-			100,000

Common stock issued for consulting fees		-		-		-			-			500,000		20,000		-		-			-			20,000

Deemed preferred dividend		-		-		-			-			-		-		401,061		(401,061	)		-			-

Net loss		-		-		-			-			-		-		-		(1,146,311	)		-			(1,146,311	)

Balance, December 31, 2008		10,000,000		1,000		554,017			554			500,000		20,000		3,957,424		(4,349,817	)		(1,176	)		(372,015	)

Net profit		-		-		-			-			-		-		-		297,603			-			297,603

Balance, December 31, 2009		10,000,000	$	1,000		554,017		$	554			500,000	$	20,000	$	3,957,424	$	(4,052,214	)	$	(1,176	)	$	(74,412	)

See Notes to Financial Statements

NORTHEAST AUTOMOTIVE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS

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

On January 14, 2004, the Company issued 200,000 shares of it’s common stock to Northeast Auto Acceptance Corp (a New York corporation) (“NAAC-NY”) when the Company had 181,886 shares outstanding as consideration for the acquisition of NAAC-NY. NAAC-NY was incorporated in New York on December 31, 1996. NAAC-NY buys used automobiles at auctions, then repairs, cleans, transports and resells them wholesale throughout the Pacific Northwest.

On March 4, 2004, the Company acquired NAAC-NY the accounting acquirer and to change its name to Northeast Auto Acceptance Corporation. Catadyne Corporation, the legal acquirer, was a non-operating public shell corporation at the time of the transaction.

Also on March 4, 2004, the Company issued its two officer/shareholders 17,000,000 shares of common stock in exchange for (a) $100,000 as part of the acquisition of NAAC-NY by reducing a loan payable to the officers by this amount and (b) the 200 shares of NAAC-NY they owned, which were all of the shares of NAAC-NY issued and outstanding at the time. Effectively, Mr. William Solko, the new President and sole Director owns more than 50% of the voting Common Stock and can pass any item that is subjected to approval of a stockholders vote.

The Company is treating this transaction as a reverse acquisition and reorganization for accounting purposes. The financial statements include the operations of NAAC-NY, the accounting acquirer, for all periods presented.

Going Concern

The financial statements have been prepared on the basis of a going concern which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has a working capital deficiency of $98,436 at December 31, 2009 and an accumulated deficit of $4,052,214 since inception.

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

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Inventory

Inventory is stated at the lower of cost or market using the specific identification basis.

NORTHEAST AUTOMOTIVE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Depreciation

The cost of equipment is depreciated over the estimated useful lives of the related assets of five years.

Principles of Consolidation

These consolidated financial statements include the accounts of the Company and its wholly owned subsidiary Northeast Auto Acceptance (New York). All inter-company accounts and transactions have been eliminated.

These consolidated financial statements have been prepared by management in accordance with accounting principles generally accepted in the United States.

Revenue Recognition

The Company buys used autos and recognizes revenue when it resells them and title is transferred to the buyer. The costs of the auto, any fees charged, and any repair costs are included in the costs of sales. The Company is the owner of the vehicle until the sale is complete and as such has all risks inherent with such ownership.

Income Taxes

The Company accounts for income taxes in accordance with Accounting Standards Codification (“ASC”) Topic 740 “Income Taxes” which requires an asset and liability approach for the financial accounting and reporting of income taxes. Under this method, deferred income taxes are recognized for the expected future tax consequences of differences between the tax bases of assets and liabilities and their reported amounts in the financial statements. These balances are measured using the enacted tax rates expected to apply in the year(s) in which these temporary differences are expected to reverse. The effect on deferred income taxes of a change in tax rates is recognized in income in the period when the change is enacted.

The Company accounts for unrecognized tax benefits in accordance with ASC Topic 740, which prescribes a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized. The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation, based solely on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement.

The Company recognizes interest and penalties related to unrecognized tax benefits if there are any within the income tax expense line of the Consolidated Statement of Operations, while accrued interest and penalties are included within the related tax liability line of the Consolidated Balance Sheets.

Reverse Stock Split

The Company effected a 1-for-5 reverse stock split of its common stock no par value on February 20, 2004 and a 1-for-30 reverse stock split of its common stock, $0.001 par value on June 17, 2008. Accordingly all share and per share information included in the consolidated financial statements has been adjusted to reflect the reverse stock split.

NORTHEAST AUTOMOTIVE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Recent Accounting Pronouncements

No other recently issued accounting standards will have an impact on its consolidated results of operations, financial position or cash flows.

NOTE 3 – INVENTORIES

Inventory consists of the following:

	December 31,
	2009		2008

Automobiles purchased for resale	$	1,554,549	$	1,907,157

Inventory is stated at the lower of cost or market using the specific identification basis.

The inventory is valued by comparing the total cost of the vehicle to our net realizable value at the time of sale or to the "Blue Book" value for unsold vehicles. The lower of these is used to price the inventory. Our experience has been that costs are usually equal to or lower than our net realizable value or the "Blue Book" value. Since our inventory is usually turned over in a short time, our pricing is not sensitive to wide deviations from the actual results. The Company has not had to make revisions to its pricing of inventory as a result of deviations from actual results. The inventories are limited by the amount of working capital the Company has at any one time.

F10

NORTHEAST AUTOMOTIVE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 – NOTES AND LOANS PAYABLE

	December 31,		December 31,
	2009		2008
Line of credit (On October 4, 2004, the Company was approved for a line of credit of $975,000, as an inventory financing ("Floor Plan") loan with interest set at 2% above the Wall Street Journal Prime rate. The agreement requires any advances to be repaid for a vehicle on the earliest of forty eight (48) hours from the time of sale or within twenty four (24) hours from the time the Company receives payment by or on behalf of the purchase of such vehicle or demand. The agreement is personally guaranteed by the officers and their respective spouses. The collateral for the loan is any vehicle owned by the Company) The agreement does not have any other restrictive covenants.	$	325,588	$	198,006

Revolving line of credit interest payable monthly at 1% over the prime rate, secured by a lien on all of the Company's assets and personally guaranteed by the majority stockholders. Interest is paid monthly on account)		100,000		100,000

Convertible demand notes - The convertible demand notes in the amounts of $150,000, $250,000 and $75,000, issued September 15, 2004, December 19, 2005 and June 15, 2007 respectively, earn interest at the rate of 9% through May 31, 2008, and at the rate of 6% thereafter, The notes are convertible at $0.25 per share. Interest is payable monthly.		-		100,000

6% unsecured demand notes payable		770,861		804,246

Due to stockholders (The stockholder loans are unsecured, pay interest at an average 6% per annum, are subordinated to the bank loan and have no specific terms of repayment)		584,115		1,746,269
	$	1,780,564	$	2,948,521

F11

NORTHEAST AUTOMOTIVE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 – PREFERRED STOCK

On April 22, 2008 a Debt Exchange Agreement (“Agreement”) was entered into between Northeast Automotive Holdings, Inc. (the “Company” or “NEAH”) and William Solko (the “Holder”). The Agreement calls for the Holder to waive, release, forgive and cancel a portion of the debt in the amount of $100,000 owed to the Holder by the Company. In addition, in consideration for this Agreement, the Holder hereby agrees to cancel 333,333 shares of the Holders’ 500,000 shares Common Shares. In exchange, NEAH will issue to the Holder 10,000,000 shares of Series A Convertible Preferred Stock (“Series A Preferred”).

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

To determine the Fair Value of the Series A Preferred stock, the Company sets out to value each of the preferences of the Series A Preferred stock since there was no market for the Series A Preferred.

First preference: (i) voting rights equal to 30 times the number of Common stock votes.

A value can be associated to these voting rights when the Company, as a shell, would be worth about $100,000 especially in consideration of the $ 5,106,455 of liabilities at March 31, 2008 that would have to be taken over by any new owners.

Second preference: (ii) not entitled to receive dividends paid on the Common stock.

The Company believes this preference has no value.

Third preference: (iii) liquidation preference equals to eight times the sum available for distribution to Common stock holders.

The estimated maximum liquidation value would approximate the stockholders equity since any gross profit on liquidation of the inventory would be offset by operating and liquidating expenses. With the deterioration of the used vehicle market during late 2007 and into 2008, the chance of a breakeven liquidation was extremely unlikely in the near future. Since the preferred stock will automatically convert to common shares in a short three years, this liquidation preference right is of limited value especially to an already controlling shareholder . The Company therefore places no value on this preference.

Fourth preference: (iv) automatically convert after three years to one share of Common stock.

Fifth preference: (v) not to be subject to reverse stock splits and other changes to the Common stock capital of the Company

Sixth preference: (vi) convertible at the option of the holder after forty-five (45) days.

The Company believes their preference has no value since it is a forced conversion at the same ratio as the voluntary conversion that is available after June 6, 2008.

On April 22, 2008, at the time of issuance, the Preferred stock was not readily tradable in an open market. The Company determined the fair value of the 333,333 Common shares canceled was $254,702 at $0.764 per share based on the Company’s net assets of $677,980 as at March 31, 2008 divided by 887,286 shares issued and outstanding (the “Net asset approach”). The Company believes that it was appropriate to determine the fair value of its common stock at $0.764 based on the Net asset approach rather the available market stock price based on the fact that (1) there were limited stock trading activities on the market, (2) the relevant historic and current financial conditions of the Company, and (3) the industry and Company’s outlook for the future. Accordingly, the Company believes that the Net asset approach represented a more accurate and objective criteria for evaluating the Common shares of the Company. In addition, the Holder forgave a loan in the amount of $100,000 that was owed to the Holder by the Company.

F12

NORTHEAST AUTOMOTIVE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 – PREFERRED STOCK (continued)

On June 17, 2008, the Board of Directors approved a 1 for 30 reverse stock splits for the common stock. The Company reevaluated the fair market value of the 10,000,000 Preferred stock that was issued on April 22, 2008 because the Preferred stock that was convertible into Common stock at 1:1 ratio was not affected by the reverse stock split.

The Company determined the fair value of the Common shares at $0.0401 based on the Company’s adjusted net assets of $423,278 divided by the total assumed number of 10,553,953 shares issued and outstanding (as if all Series A Preferred stock were converted to Common stock).

As a result, the Company recorded deemed preferred dividend of $401,601.

Stockholders' Equity at March 31, 2008	$	677,980
Value of Common Shares Canceled at April 22, 2008		(254,702	)
Adjusted Stockholders' Equity at April 22, 2008	$	423,278

Common Stock Outstanding at March 31, 2008		887,286
Common Stock Cancelled at April 22, 2008		(333,333	)
Assumed all Preferred Stock Converted to Common Stock		10,000,000
Adjusted Common Stock Outstanding at June 17, 2008		10,553,953

Fair Value of Common Stock per share	$	0.0401

Deemed Preferred Stock Dividend for 10,000,000 shares	$	401,061

NOTE 6 - COMMON STOCK

On April 22, 2008 a Debt Exchange Agreement (“Agreement”) was entered into between Northeast Automotive Holdings, Inc. (the “Company” or “NEAH”) and William Solko (the “Holder”). The Agreement calls for the Holder to waive, release, forgive and cancel a portion of the debt in the amount of $100,000 owed to the Holder by the Company. In addition, in consideration for this Agreement, the Holder hereby agrees to cancel 333,333 shares of the Holders’ 500,000 shares Common Shares. All the shares have been restated for the reverse stock split.

On June 20, 2008, the Company agreed to file Form S-8 and to issue 500,000 common shares for consulting services. The Company expensed the $20,000 over a six-month period.

NOTE 7 - REVERSE STOCK SPLIT

The Company enacted a 1-for-30 reverse share split of its common stock on June 17, 2008. All share amounts shown are adjusted.

F13

NORTHEAST AUTOMOTIVE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - PROFIT OR LOSS PER SHARE

Profit or loss per common share is calculated as the profit or loss for the period divided by the weighted average number of shares of the Company's common stock.

	December 31,
	2009		2008
Numerator
Net income (loss) available to common stockholders	$	297,603	$	(1,547,372	)

Denominator
Weighted-average shares outstanding for earnings per share, basic		692,879		692,879

Effect of dilutive securities:
Convertible preferred stock		-		-
Weighted-average shares outstanding for earnings per share, diluted		692,879		692,879

The following were excluded from the computation of the diluted securities outstanding as they would have been an anti-dilutive impact.

	December 31,
	2009		2008

Convertible preferred stock		10,000,000		10,000,000

NOTE 9 - INCOME TAXES

Due to the Company’s prior year net losses, there was no provision for income taxes. The Company has net operating loss carry forwards for income tax purposes of approximately $716,000 and $1,014,000 at December 31, 2009 and 2008, respectively. These carry forward losses are available to offset future taxable income, if any, and expire starting in the year 2024. The Company’s utilization of this carry forward against future taxable income may become subject to an annual limitation due to any cumulative 36-month change in ownership of the Company of more than 50 percent. The components of the Company’s tax provision were as follows:

	2009			2008
Deferred tax asset – NOL carryforward	$	243,000		$	345,000
Less: valuation allowance		(243,000	)		(345,000	)
Total	$	-		$	-

NOTE 10 -COMMITMENTS AND CONTINGENCIES

The Company rents office space on a month-to-month basis at two locations and beginning during 2008, warehouse space on a month-to-month basis. Rent expense was approximately $42,816 and $34,500 for 2009 and 2008, respectively.

F14

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

None.

Item 9A. Controls and Procedures.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Disclosure Controls.

We carried out an evaluation required by Rule 13a-15(b) of the Securities Exchange Act of 1934 under the supervision and with the participation of our chief executive officer and chief financial officer of the effectiveness of the design and operation of our “disclosure controls and procedures” as of the end of the period covered by this Report.

Disclosure controls and procedures are designed with the objective of ensuring that (i) information required to be disclosed in an issuer’s reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) information is accumulated and communicated to management, including our Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

The evaluation of our disclosure controls and procedures included a review of our objectives and processes and effect on the information generated for use in this Report. This type of evaluation will be done quarterly so that the conclusions concerning the effectiveness of these controls can be reported in our periodic reports filed with the SEC. We intend to maintain these controls as processes that may be appropriately modified as circumstances warrant.

Based on their evaluation, our chief executive officer who also acts as our chief financial officer has concluded that our disclosure controls and procedures are not effective in timely alerting him to material information relating to the Company required to be included in our periodic reports filed with the SEC as of the end of the period covered by this Report due to a limited segregation of duties amongst the Company’s employees with respect to the Company’s control activities. This deficiency is the result of the Company’s limited number of employees. This deficiency may affect management’s ability to determine if errors or inappropriate actions have taken place. Management is required to apply its judgment in evaluating the cost-benefit relationship of possible changes in our disclosure controls and procedures.

There were no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. However, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Management necessarily applied its judgment in assessing the benefits of controls relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. Because of the inherent limitations in a control system, misstatements due to error or fraud may occur and may not be detected. Our internal control over financial reporting was not effective for the following reasons:

Internal Controls.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, consisting of one person who serves as our Principal Executive Officer and Principal Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2009 based on the criteria set forth in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under that criteria, our management concluded that our internal control over financial reporting was not effective as of December 31, 2009.

This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. We were not required to have, nor have we engaged our independent registered public accounting firm to perform, an audit on our internal control over financial reporting pursuant to the rules of the Securities and Exchange Commission that permit us to provide only management’s report in this Annual Report.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the fourth quarter of fiscal 2009 that have materially affected, or are reasonably likely to material affect, our internal control

Item 9B. Other Information.

None.

PART III

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

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

Name	Age	Position	Date of Appointment

William Solko	40	President, Chief Executive Officer, Chairman, Treasurer	December 2004

Michael Shaw	40	Vice President	December 2004

Marsha Solko	40	Director of Administration	December 2004

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

William Solko

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

Michael Shaw

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

Marsha Solko

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

BOARD OF DIRECTORS

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

BOARD COMMITTEES

The Board of Directors does not have any committees.

DIRECTORS’ COMPENSATION

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

Term of Office

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

Significant Employees

None.

Family Relationships

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

Involvement in Certain Legal Proceedings

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

•

the subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

•

convicted in a criminal proceeding or is subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

•

subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

•

found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law.

Code of Ethics

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

Compliance with Section 16(a) of the Exchange Act

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

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

Item 11. Executive Compensation.

Compensation of Executive Officers

The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officers paid by us during the fiscal years ended December 31, 2009 in all capacities for the accounts of our executives, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO):

Compensation of Executive Officers (continued)

SUMMARY COMPENSATION TABLE

Name and Principal Position	Year	Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensat ion ($)		Non- Qualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Totals ($)

William Solko President, Chief	2009	$	46,013		-0-		-0-		-0-		-0-		-0-		-0-	$	46,013
Executive Officer, Treasurer

Michael Shaw, Vice President	2009	$	46,013		-0-		-0-		-0-		-0-		-0-		-0-	$	46,013
159,511Marsha Solko, Director of Administration	2009		-0-		-0-		-0-		-0-		-0-		-0-		-0-	$	-0-

Outstanding Equity Awards at Fiscal Year-End Table. There were no individual grants of stock options to purchase our common stock made to the named executive officers in the Summary Compensation Table during the fiscal year ended December 31, 2009, and the subsequent period up to the date of the filing of this prospectus.

Compensation of Directors

For the fiscal year ended December 31, 2009, we did not compensate our directors for their services.

Item 12.

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

The following table sets forth certain information regarding the ownership of our capital stock, as of April 15, 2009, for: (i) each director; (ii) each person who is known to us to be the beneficial owner of more than 5%of our outstanding common stock; (iii) each of our executive officers named in the Summary Compensation Table; and (iv) all of our current executive officers and directors of as a group. Except as otherwise indicated in the footnotes, all information with respect to share ownership and voting and investment power has been furnished to us by the persons listed. Except as otherwise indicated in the footnotes, each person listed has sole voting power with respect to the shares shown as beneficially owned.

Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership		Percent of Class(2)

Class A Common	William Solko (1)		166,667		30.08	%
Stock	Michael Shaw (1)		66,667		12.03	%

(1)

Unless otherwise indicated in the footnotes to the table, (1) the individuals listed have sole voting and sole investment control with respect to the shares they beneficially own and (2) the address of each beneficial owner listed is c/o the Company, 2174 Hewlett Avenue, Suite 206, Merrick, New York 11566.

(2)	Based on 100,000,000 shares of Common Stock authorized, 554,017 shares issued and outstanding.

Item 13.

Certain Relationships and Related Transactions, and Director Independence.

None.

Item 14.

Principal Accounting Fees and Services.

Audit Fees

For 2009 and 2008, we were billed $30,000 per year for professional services rendered for the audit and reviews of our financial statements.

Tax Fees

None.

All Other Fees

None.

Audit Related Fees

None.

Pre-approval Policy

Our Board of Directors has adopted a procedure for pre-approval of all fees charged by our independent auditors. Under the procedure, the Board approves the engagement letter with respect to audit, tax and review services. Other fees are subject to pre-approval by the Board, or, in the period between meetings, by a designated member of Board. Any such approval by the designated member is disclosed to the entire Board at the next meeting. The audit and tax fees paid to the auditors with respect to fiscal year 2009 were pre-approved by the entire Board of Directors.

Item 15.

Exhibits.

Exhibit No.	Title of Document	Location

3.1	Articles of Incorporation	Incorporated by reference to Information Statement filed on November 8, 2007

3.2	Bylaws	Incorporated by reference to Information Statement filed on November 8, 2007

14.1	Code of Ethics	Incorporated by reference to Form 10-K filed on April 14, 2008

31.1	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934	Filed herewith

32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith

SIGNATURES

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

NORTHEAST AUTOMOTIVE HOLDINGS, INC.

By:	/s/ William Solko
	WILLIAM SOLKO
	President, Chief Executive Officer, Treasurer

Date:	April 15, 2010

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

Name	Title	Date

/s/ William Solko	President, Chief Executive Officer, Treasurer, Director	April 15, 2010
WILLIAM SOLKO

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