UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~MARCH~~June 3130, 2013

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

For the transition period from to .

Commission File Number: 333-185664

Capall Stables, Inc.

(Exact name of registrant as specified in its charter)

DELAWARE (State of Incorporation)		45-4654509 (I.R.S. Employer Identification No.)

205 Del Mar Ave #974, San Clemente, California (Address of principal executive offices)		92674 (Zip Code)

(949) 461-1471

(Registrant’s telephone number, including area code)

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o		Non-accelerated filer o
Accelerated filer o		Smaller reporting company x

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Title of Each Class		Outstanding as of ~~May~~August 5, 9 2013
Common stock, par value $0.0001 per share Preferred stock, par value $0.001 per share		~~449~~44,~~250~~925,000 10,000,000

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CAPALL STABLES, INC.

FORM 10-Q

~~March~~June 3130, 2013

TABLE OF CONTENTS

PART I-- FINANCIAL INFORMATION

Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	89
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	1419
Item 4.	Control and Procedures	1519

PART II-- OTHER INFORMATION

Item 1	Legal Proceedings	16
Item 1.	Legal Proceedings	20
Item 1A	Risk Factors	16
Item 1A.	Risk Factors	20
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	1620
Item 3.	Defaults Upon Senior Securities	1620
Item 4.	(Removed & Reserved)	1620
Item 5.	Other Information	1620
Item 6.	Exhibits	1620

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PART I FINANCIAL INFORMATION

ITEM 1–FINANCIAL STATEMENTS

Capall Stables, Inc. (fka SOB Stables, Inc.)

(A Development Stage Company)

Balance Sheet

~~Balance Sheet~~(Unaudited)

	March 31, 2013			December 31, 2012
	June 30, 2013			December 31, 2012
	(Unaudited)			(Audited)
ASSETS:
Current assets:
Cash or cash equivalents	$	14,~~575~~110		$	11,587
Total current assets		1,575			11,587
Thoroughbreds, net of depreciation of $1,107		12,839			-
Thoroughbreds		25,639			-
Total current assets		16,949			11,587
Total assets	$	2716,~~214~~949		$	11,587
LIABILITIES AND SHAREHOLDER’S EQUITY
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Accounts payable	$	710,~~089~~431		$	587
Other liabilities		~~1,000~~-			1,000
Notes payable- related party		2751,~~975~~942			622
Total liabilities		3662,~~064~~373			2,209
Shareholder ‘s equity:
Shareholders’ equity:
Preferred Stock, Par Value $.0001, 50,000,000 shares authorized, 10,000,000 Issued and Outstanding,		1,000			1,000
Preferred Stock, Par Value $.0001, 50,000,000 shares authorized, 10,000,000 Issued and Outstanding at June 30, 2013 and December 31, 2012, respectively		1,000			1,000
Common Stock, Par Value $.0001, 700,000,000 shares authorized, 449,250,000 Issued and Outstanding		44,925			44,925
Common Stock, Par Value $.0001, 700,000,000 shares authorized, 44,925,000 Issued and Outstanding at June 30, 2013 and December 31, 2012, respectively		4,493			4,493
Additional Paid In Capital		950,~~700~~133			950,~~700~~132
Deficit accumulated in the development stage		(64101,~~475~~050	)		(46,247	)
Total shareholders' equity		(8,850	)		9,378
Total shareholders' equity (deficit)		(45,424	)		9,378
Total liabilities and shareholders' equity	$	27,214		$	11,587
Total liabilities and shareholders' equity (deficit)	$	16,949		$	11,587

The accompanying notes are an integral part of these unaudited financial statements.

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Capall Stables, Inc. (fka SOB Stables, Inc.)

(A Development Stage Company)

Statement of Operations

Capall Stables, Inc. (fka SOB Stables, Inc.)

(A Development Stage Company)

Statement of Operations

(Unaudited)

	For the period ending March 31, 2013			From Inception on October 10, 2012 Through March 31, 2013
	For the Three Months ending June 30, 2013			For the Six Months ending June 30, 2013			From Inception on October 10, 2012 Through June 30, 2013
	(Unaudited)
Revenue	$	18,200		$	18,450		$	18,450
Revenue	$	250		$	250
Cost of goods sold		12,179			12,179			12,179
Net Income		250			250
Operating Expenses
Operating Expenses
Thoroughbred research		186			309			10,209
Thoroughbred research		123			10,023
Thoroughbred direct costs		21,492			27,635			27,635
Thoroughbred direct costs		6,047			6,047
SG&A		20,919			33,130			69,477
SG&A		12,308			48,655
Total Operating Expenses		42,597			61,074			107,321
Total Operating Expenses		18,478			64,725
Operating Income		(36,576	)		(54,803	)		(101,050	)
Operating Loss		(18,228	)		(64,475	)
Net Loss	$	(36,576	)	$	(54,803	)	$	(101,050	)
Net Loss	$	(18,228	)	$	(64,475	)
Earnings Per Share, Basic and Diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)
Earnings Per Share, Basic and Diluted	$	(0.00	)		n/a
Weighted average shares outstanding		44,925,000			44,925,000			44,300,379
Weighted average shares outstanding		449,250,000			n/a

The accompanying notes are an integral part of these unaudited financial statements.

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Capall Stables, Inc. (fka SOB Stables, Inc.)

(A Development Stage Company)

Statements of Cash Flows

~~Statements of Cash Flows~~(Unaudited)

	Three months ending March 31, 2013			For the period from inception (October 10, 2012) through March 31, 2013
	Six months ending June 30, 2013			From Inception on October 10, 2012 Through June 30, 2013
	(Unaudited)			(Audited)
Cash flows from operating activities
Net Loss	$	(1854,~~228~~803	)	$	(64101,~~475~~050	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock issued for services		-			32,000
Depreciation expense		486			486
Depreciation		1,107			1,107
Changes in assets and liabilities:
Accounts payable		69,~~502~~844			710,~~089~~431
Other liabilities		-			1,000
Thoroughbred		12,179			12,179
Net cash provided by (used in) operating activities		(11,240	)		(23,900	)
Other liabilities		(1,000	)		-
Net cash provided by (used in) operating activities		(32,673	)		(45,333	)
Cash flows from financing activities
Proceeds from sale of common stock		-			22,625
Proceeds from sale of preferred stock		-			1,000
Proceeds from note issued to related party		1,228			1,850
Repayments on related party debt		(3,000	)		(3,000	)
Net cash provided by financing activities		1,228			25,475
Proceeds from note issued to related party		28,196			28,818
Net decrease in cash		(10,012	)		1,575
Net cash provided by financing activities		25,196			49,443
Cash balance, beginning of period		11,587			-
Net increase (decrease) in cash		(7,477	)		4,110
Cash balance, end of periods	$	1,575		$	1,575
Cash balance, beginning of periods		11,587			-
Cash balance, end of periods	$	4,110		$	4,110
Cash paid for:
Interest	$	-		$	-
Income taxes	$	-		$	-
Noncash financing and investing activities:
Purchase of thoroughbreds by related party	$	26,125		$	26,125

The accompanying notes are an integral part of these unaudited financial statements.

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CAPALL STABLES, INC.

CONDENSED NOTES TO UNAUDITED FINANCIAL STATEMENTS

Note 1 – Nature of Operations and Going Concern

The accompanying unaudited interim financial statements of Capall Stables, Inc. (“we”, “our”, or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the Company’s audited 2012 annual financial statements and notes thereto filed on Form S-1 with the SEC. In the opinion of management, all adjustments, consisting of normal reoccurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods present have been reflected herein. The results of operation for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements, which would substantially duplicate the disclosure required in Capall Stables, Inc.’s fiscal 2012 financial statements have been omitted.

Capall Stables, Inc. (fka, SOB Stables, Inc.) (the “Company”) was incorporated in Delaware on October 10, 2012. The Company's business is the buying, selling and racing of thoroughbreds that can race in the claiming levels of thoroughbred racing. Claiming refers to the process by which a licensed person may purchase a horse entered in a race designated as a “claiming race” for a predetermined price. When a horse has been claimed, its new owner assumes title after the starting gate opens although the former owner is entitled to all purse money earned in that race. Claiming races are the lowest level of thoroughbred racing and as such provide the lowest average purse money among the race types.

The Company currently has no operations and in accordance with ASC 915 “Development Stage Entities,” and is considered a development stage enterprise. The Company has been in the development stage since its formation and has not yet realized revenue from its planned operations.

Revenue Recognition

The company pursues opportunities to realize revenues from two principal activities: purse winnings from racing horses and selling its horses in claiming races. It is the company’s policy that revenues and gains will be recognized in accordance with ASC Topic 605-10-25, “Revenue Recognition.” Under ASC Topic 605-10-25, revenue earning activities such as horse races are recognized upon claiming the purse winnings and the company has substantially accomplished all it must do to be entitled to the benefits represented by the revenue. Gains or losses from the sale of the horses are recognized when the horse is sold or otherwise disposed of, the cost and associated accumulated depreciation are removed from the accounts and the resulting gain or loss is recognized in the statement of operations.

Going Concern

The accompanying financial statements have been prepared on a basis which assumes that the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Management feels the limited history of the Company and its future cash needs to implement its business plan raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Management's plans with respect to alleviating the adverse financial conditions that caused shareholders to express substantial doubt about the Company’s ability to continue as a going concern are as follows:

The Company’s current assets are not deemed to be sufficient to fund ongoing expenses related to the planned expansion of operations. In order to implement its entire business plan, the Company will need to raise additional capital through equity or debt financings or through loans from shareholders or others. The ability of the Company to continue as a going concern is dependent upon its ability to successfully raise additional capital and eventually attain profitable operations. There can be no assurance that the Company will be able to raise additional capital or execute its business strategy. These factors raise substantial doubt about the company’s ability to continue as a going concern.

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Note 2 – Related Party Transaction

On February 1, 2013, the Company entered into a revolving line of credit in the amount of $500,000 with SC Capital Group. Valerie Baugher is the President of SC Capital.

On February 23, 2013, the Company acquired its initial thoroughbred on February 23, 2013 from our CEO as our CEO claimed the thoroughbred on behalf of the Company. On February 23, 2013, the Company issued a note payable to our CEO, Mr. Wade in the amount $13,700, of which $13,625 was for the purchase of Rock Off. The note payable is an unsecured, non-interest bearing note which matures on December 31, 2013.

On March 24, 2013, the Company issued a note payable to our CEO, Mr. Wade in the amount $13, 625 for the purchase of Honour ~~The~~the Deputy for $12,500 plus tax of $1,125. The note payable is an unsecured, non-interest bearing note which matures on December 31, 2013.

AsOn ofApril ~~March 31~~4, 2013, the Company ~~was~~borrowed ~~indebted~~$7,000 tofrom ~~the~~its CEO, ~~for~~Joseph ~~a total of $27,975~~Wade. ~~All~~The ~~notes~~note ~~are~~payable ~~due~~is onan ~~December 31~~unsecured, ~~2013 and are~~ non-interest bearing note and ~~due~~matures on ~~demand~~December 31, 2013.

On April 19, 2013, the Company borrowed $1,050 from its CEO, Joseph Wade. The note payable is an unsecured, non-interest bearing note and matures on December 31, 2013.

On April 23, 2013, the Company borrowed $1,000 from its CEO, Joseph Wade. The note payable is an unsecured, non-interest bearing note and matures on December 31, 2013.

On May 9, 2013, the Company borrowed $1,000 from its CEO, Joseph Wade. The note payable is an unsecured, non-interest bearing note and matures on December 31, 2013.

On May 19, 2013, the Company borrowed $3,500 from its CEO, Joseph Wade. The note payable is an unsecured, non-interest bearing note and matures on December 31, 2013.

On May 28, 2013, the Company borrowed $3,100 from its CEO, Joseph Wade. The note payable is an unsecured, non-interest bearing note and matures on December 31, 2013.

On May 30, 2013, the Company borrowed $572.06 from its CEO, Joseph Wade. The note payable is an unsecured, non-interest bearing note and matures on December 31, 2013.

On June 3, 2013, the Company borrowed $1,129.94 from its CEO, Joseph Wade. The note payable is an unsecured, non-interest bearing note and matures on December 31, 2013.

On June 11, 2013, the Company borrowed $1,615 from its CEO, Joseph Wade. The note payable is an unsecured, non-interest bearing note and matures on December 31, 2013.

On June 28, 2013, the Company borrowed $4,000 from its CEO, Joseph Wade. The note payable is an unsecured, non-interest bearing note and matures on December 31, 2013.

The CEO also advanced funds of $3,030 during the quarter. This amount is unsecured, non-interest bearing, and due on demand.

As of June 30, 2013, the Company was indebted to the CEO for a total of $51,942. All notes are due on December 31, 2013 and are non-interest bearing and due on demand.

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Note 3 – Thoroughbreds

Company’s Thoroughbreds

Name	DOB/Sex	Sire	Price
Rock Off(1)	2008/Gelding	Rock Hard Ten	$	13,625
Honour The Deputy(2)	2007/Gelding	Honour and Glory	$	12,500

(1)	Rock Off was acquired by Joseph Wade, our CEO, on behalf of the Company. All rights to Rock Off have been transferred to our subsidiary, Capall Stables of California. The Company gelded Rock Off on March 20, 2013.

(2) Honour the Deputy was claimed from the Company April 21, 2013 for $8,000.

Asset Value:

Rock Off				~~Honour The Deputy~~
Acquisition Cost	$	13,625		~~Acquisition Cost~~	$	~~12,500~~
Depreciation	$	(~~407~~786	)	~~Depreciation~~	$	~~(79~~	)
Net Total	$	1312,~~218~~839		~~Net Total~~	$	~~12,421~~

Note 4 – ~~Subsequent Events~~Equity

On ~~April~~May 414, 2013, the Company ~~borrowed~~performed ~~$7,000~~a ~~from~~10 ~~its~~for ~~CEO,~~1 ~~Joseph~~reverse ~~Wade.~~of the Company’s outstanding Common Stock. The ~~note~~reverse ~~payable~~resulted isin anthe ~~unsecured,~~reduction ~~non-interest~~of ~~bearing~~the ~~note~~Company’s ~~and~~common ~~matures~~stock onoutstanding ~~December~~from 31449,250,000 ~~2013~~to 44,925,000.

~~On April 21, 2013, Honour the Deputy won the 3rd race at Santa Anita. The Company won $10,200 from the purse money.~~8

On April 21, 2013, Honour the Deputy was claimed from the Company for $8,000.

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

Forward-Looking Statements

This Form 10-Q may contain certain “forward-looking” statements as such term is defined in the private securities litigation reform act of 1995 and by the securities and exchange commission in its rules, regulations and releases, which represent the Company’s expectations or beliefs, including but not limited to, statements concerning the Company’s operations, economic performance, financial condition, growth and acquisition strategies, investments, and future operational plans. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “may”, “will”, “expect”, “believe”, “anticipate”, “intent”, “could”, “estimate”, “might”, “Plan”, “predict” or “continue” or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, certain of which are beyond the Company’s control, and actual results may differ materially depending on a variety of important factors, including uncertainty related to acquisitions, governmental regulation, managing and maintaining growth, the operations of the company and its subsidiaries, volatility of stock price and any other factors discussed in this and other registrant filings with the securities and exchange commission. The company does not intend to undertake to update the information in this Form 10-Q if any forward-looking statement later turns out to be inaccurate.

The following discussion summarizes the results of our operations for the three month period ended ~~March~~June 3130, 2013. It also analyzes our financial condition at December 31, 2012. This discussion should be read in conjunction with the Management’s Discussion and Analysis, including the audited financial statements for the years ended December 31, 2012.

Going Concern

Our financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has generated modest revenues since inception and has never paid any dividends and is unlikely to pay dividends. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations and to determine the existence, discovery and successful exploration of economically recoverable reserves in its resource properties, confirmation of the Company’s interests in the underlying properties, and the attainment of profitable operations. The Company has had very little operating history to date. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Overview

During our current three months ended ~~March~~June 3130, 2013, we generated income of $~~250~~18,200 and incurred a net loss of $1836,~~228~~575. We have received no substantial revenue ($~~250~~18,450) from our thoroughbred operations, and historically relied on debt financings from our CEO to finance our ongoing operations. Our operations generated a net loss of $1854,~~228~~803 from for the ~~three~~six months ending ~~March~~June 3130, 2013 and a loss of $64101,~~475~~050 from Inception (October 10, 2012) through ~~March~~June 3130, 2013. In order to fund operations, we relied on proceeds received from notes payable of $2751,~~353~~320 from our CEO during the ~~three~~six months ended ~~March~~June 3130, 2013 and $2751,~~975~~942 since our inception (October 10, 2012).

Corporate Background and Our Business

Going Concern

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We have experienced recurring net losses from operations which losses have caused an accumulated deficit of ($64101,~~475)~~050 as of ~~March~~June 3130, 2013. We had net losses of ($1854,~~228)~~803 for the ~~period~~six months ~~ended~~ending ~~March~~June 3130, 2013. These factors, among others, raise substantial doubt about our ability to continue as a going concern. If we are unable to generate profits and are unable to continue to obtain financing to meet our working capital requirements, we may have to curtail our business sharply or cease operations altogether. Our continuation as a going concern is dependent upon our ability to generate sufficient cash flow to meet our obligations on a timely basis to retain our current financing, to obtain additional financing, and, ultimately, to attain profitability. Should any of these events not occur, we will be adversely affected and we may have to cease operations.

The ongoing execution of our business plan is expected to result in operating losses over the next twelve months. Management believes it will need to raise capital through stock issuances in order to have enough cash to maintain its operations for the next twelve months. There are no assurances that we will be successful in achieving our goals of obtaining cash through stock issuances or increasing revenues and reaching profitability.

In view of these conditions, our ability to continue as a going concern is dependent upon our ability to meet our financing requirements, and to ultimately achieve profitable operations. Management believes that its current and future plans provide an opportunity to continue as a going concern. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that may be necessary in the event we cannot continue as a going concern.

Business Of The Registrant

Description of Business

The Company's business is the buying, selling and racing of thoroughbreds that can race in the claiming levels of thoroughbred racing. Claiming refers to the process by which a licensed person may purchase a horse entered in a race designated as a “claiming race” for a predetermined price. When a horse has been claimed, its new owner assumes title after the starting gate opens although the former owner is entitled to all purse money earned in that race. Claiming races are the lowest level of thoroughbred racing and as such provide the lowest average purse money among the race types. On March 15, 2013, the Company’s wholly owned subsidiary obtained its license from the California Horse Racing Board.

The Company acquired its initial thoroughbred, Rock Off, on February 23, 2013. Our CEO claimed Rock Off on behalf of the Company since the Company was still waiting to finalize its licensing from the State of California. The Company purchased Rock Off from our CEO by issuing a note payable to him for $13,700. Our CEO has transferred all rights to Rock Off to the Company’s subsidiary, Capall Stables of California. On March 24, 2013, the Company claimed its second horse, Honour The Deputy. The Company will acquire its stable of thoroughbreds through claiming races instead of private transactions or auctions. The Company intends to acquire at least 50 thoroughbreds in its claiming stable in California before expanding into other states.

The Company has entered into an agreement with SC Capital for a revolving line of credit of $500,000 to acquire the company’s initial thoroughbreds. The Company needs to raise an additional $1,350,000 to acquire a total of 50 thoroughbreds for its claiming division. The Company’s goal to acquire the 50 thoroughbreds by December 2013; however, there is no guarantee that the Company will be able to acquire 50 thoroughbreds within this timeframe. This is dependent on the Company's ability to raise the capital it needs and the availability of thoroughbreds that the Company desires to acquire. Once the Company acquires the initial stable of 50 thoroughbreds, the Company will expect to expand its operations into other states.

The company will create a subsidiary for each state in which its horses shall race. For example, on March 15, 2013, the Company’s wholly owned subsidiary, Capall Stables of California, Inc., registered and obtained its license with California Horse Racing Board and may begin claiming and racing thoroughbreds and will be the owner of the Company's horses in California. The cost associated to forming these subsidiaries is approximately $500. There is no guarantee that the Company will be able to successfully expand the business into other states.

Company’s Thoroughbreds

Name		DOB/Sex		Sire		Price
Rock Off		2008/Gelding		Rock Hard Ten		$13,625 ($12,500 claiming price plus $1,125 in sales tax)

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Photos of the Thoroughbreds

Rock Off

In May 2013, Rock Off had colic surgery. Rock Off is currently recovering at a farm in Hemet, CA and is expected to commence racing in November 2013.

Claiming

The intent behind claiming is to claim horses that are performing below the ability or have been mismanaged by the current owners or trainers. Thereby, allowing the Company to make a profit on the horse being claimed for an amount higher than the Company paid or by dropping the horse into a lower claiming race to win the purse.

For example, the Company claimed Honour the Deputy on March 24, 2013 for $12,500 plus tax for a total $13,625. On April 21, 2013, the Company entered Honour the Deputy into an $8,000 claimer. Honour The Deputy won the race generating $10,200 in purse winnings and was claimed for $8,000. The company generated $18,200 in total revenue from the $13,650 acquisition of Honour The Deputy for a profit of $4,550.

What are Claiming Races

A claiming race is one in which all horses entered are eligible to be purchased by a licensed owner or indirectly through a trainer for the specified claiming price (see below for levels of claiming races). For example, in a $32,000 claiming race all the horses are for sale for the purchase price of $32,000 plus applicable taxes. The procedure for a claiming race is as follows: the trainer puts a claim in for the horse prior to the race. Immediately upon the start of the race the horse is considered sold to the new owner, however, the previous owner maintains any purse winnings from that race. If two or more owners/trainers put a claim in on a horse than a "shake" occurs to determine who has purchased the horse. A shake is when each claiming owner is assigned a number. Then a racing official draws a number at random and the owner with corresponding number has purchased the horse. Claiming races account for up to 80% of all thoroughbred races on a given day.

Company’s Operations

The Company acquired its initial thoroughbred, Rock Off, on February 23, 2013. Our CEO claimed Rock Off on behalf of the Company since the Company was still waiting to finalize its licensing from the State of California. Our CEO has transferred all rights to Rock Off to the Company’s subsidiary. The Company purchased Rock Off from our CEO by issuing a note payable to him for $13,700. On March 24, 2013, the Company claimed Honour the Deputy for $12,500 plus tax for a total $13,625. The Company received a loan from its CEO, Joseph Wade, in the amount of $13,650 to purchase Honour the Deputy. The note payable is a 12 month note with 0% interest. The Company issued the notes payable to Mr. Wade instead of using the Line of Credit with SC Capital in order to not be charged the 9% interest. However, additional purchased of thoroughbreds shall be used from funds of SC Capital’s Line of Credit (see below).

The Company has entered into an agreement with SC Capital, a related party, for a revolving line of credit of $500,000 to acquire the company’s additional thoroughbreds. The Company needs to raise an additional $1,350,000 to acquire a total of 50 thoroughbreds for its claiming division. These thoroughbreds will initially run solely in California. Once the Company acquires 50 horses in California it expects to expand its operations into other states.

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Expansion

The Company’s goal is to maintain a stable of 35-50 thoroughbreds in California. The Company expects that most thoroughbreds in its claiming division will be claimed from the company (or sold) within 12 months from the date we acquire the thoroughbred. As a result, the Company would be required to claim additional thoroughbreds to replace the ones claimed from the Company. The Company expects that it could take between 15 – 30 days to replace the thoroughbreds claimed from the Company. The Company’s management anticipating that the Company will need to replace its thoroughbreds will maintain a list of thoroughbreds it would claim upon one of the current thoroughbreds being claimed from the Company. Thereby, allowing the Company to quickly replace the thoroughbred that was claimed.

The company would acquire the new thoroughbreds according to the same methodology listed below in “Deciding on Horse”. The main factor being the thoroughbred’s past performance. Whereby, management would review the results of the thoroughbred’s races and at what level. The past performance will provide evidence to the soundness of the thoroughbred, the thoroughbred's willingness and ability to win and the length of race and turf types that the thoroughbred prefers. The Company’s officers believe that the past performance indicates the level of competition the thoroughbred can win at and therefore indicate its value. However, the past performance may not accurately predict the future performance of the thoroughbred.

Once the Company acquires a thoroughbred in its claiming division it may take up to 30-45 days before the thoroughbred may be able to race again. The factors relating to the length between races include the endurance and shape of the thoroughbred, the availability of races and the skill level of the other thoroughbreds in the race. The Company, along with our trainer, use these factors to decide on where and when to race the thoroughbred so we can put the thoroughbred in the best possible position to win. During this time the thoroughbred is usually ridden everyday as part of their training. Thoroughbreds will jog or cantor most days. The thoroughbred will typically gallop every 7 days that it does not race, this is referred to as a work out. A work out consists of a timed run from 3 furlongs up to 5 furlongs ( 1 furlong equals 1/8 of a mile) and simulates a race for the thoroughbred.

The Company expects the on-going monthly expenses directly associated to the thoroughbreds in its claiming division to be approximately $50 to $125 per day for each thoroughbred which includes all monthly cost associated with the thoroughbred including training, housing, feed and vet bills. The fee depends on the trainer's fee and the amount of vet bills each thoroughbred requires. Additionally, the jockey is paid 10% of any purse winnings from the thoroughbred he or she rides. The trainer selects the jockey for each particular race.

Initially, the Company expects to acquire 1-2 thoroughbreds per month. The Company’s has entered into an agreement with SC Capital for a revolving line of credit of $500,000 to acquire the company’s additional thoroughbreds. As such, the Company expects to acquire its initial 4 thoroughbreds by the end of May 2013. Once the Company is able to raise the additional $1,350,000 we can acquire thoroughbreds at a faster rate (at a rate of 5-8 per month) due to the fact we will have operations in place and sufficient capital (from the capital rise and operations) to maintain our stable of thoroughbreds. Once it has raised the additional $1,350,000, the Company expects to be able to acquire the 50 thoroughbreds by December 2013.

The Company will acquire thoroughbreds as our capital position permits. As such, the Company expects to be able to acquire approximately 50 thoroughbreds; however, the Company’s goal is to acquire 4 by the end of August 2013. The Company needs to raise an additional $1,350,000 to acquire a total of 50 thoroughbreds for its claiming division. If the Company is able to raise capital quicker than we currently expect, than we would acquire thoroughbreds at a faster pace. Likewise, if we raise money at a slower rate, than we expect than we will acquire thoroughbreds at a slower pace. Our ability and timing of the acquisition of the additional thoroughbreds is dependent on the Company raising the required capital to acquire the thoroughbred and to maintain the stable until our revenue is sufficient to cover the monthly costs of the thoroughbreds. The Company is expecting to have the necessary capital to begin to initially acquire the 4 initial thoroughbreds for its claiming division in August 2013 and to complete the acquisitions by August 2013. The Company further expects to have the capital available beginning in September 2013 to begin acquiring the remaining thoroughbreds to fully build out our claiming division. Once the Company acquires the 50 thoroughbreds the Company will have the infrastructure and revenue to support our expansion of the stables to additional states; however, this is dependent on our ability to raise the required capital.

If a thoroughbred becomes sick or injured then the Company will rely on the recommendations from the vet on the course of action to be taken with regard to the thoroughbred.

Deciding on Horse

When deciding on acquiring the horse the main pieces of information the Company relies on are breeding, past performance charts and race replays.

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When deciding to claim a horse, the Company relies mostly on the thoroughbred's past performance. This is because unlike a private sell or an auction, the Company cannot have a veterinarian check the horse prior to acquiring the thoroughbred. The past performance will provide evidence to the soundness of the thoroughbred, the thoroughbred's willingness and ability to win and the length of race and turf types that the thoroughbred prefers. The Company’s officers believe that the past performance indicates the level of competition the thoroughbred can win at and therefore its indicate its value. However, the past performance may not accurately predict the future performance of the thoroughbred. In addition, to the thoroughbred's past performance the Company reviews the thoroughbred's pedigree, conformation, and dosage rating of the thoroughbred. Once the Company has made initial decisions to claim as thoroughbred, we review race replays and/or watch the thoroughbred gallop in morning workouts. During this phase we review athleticism to assist in determining whether to claim a particular horse. The qualities that make up the athleticism of a horse include its physical proportionality, its temperament and its balance. Unlike a private transaction or auction the Company cannot have a vet check out for the thoroughbred for soundness issues prior to the company acquiring the thoroughbred. The Company relies on the past performance, race replays and watching morning workouts and/or gallops to determine the soundness of a particular thoroughbred it intends to claim.

When deciding to acquire a thoroughbred through a private sale or auction, the Company uses the same methodology as above, if available. The Company also will have a veterinarian check the thoroughbred prior to acquiring the thoroughbred thereby provide the Company with a comprehensive report on the health and condition of the thoroughbred. At an auction, the thoroughbred typically has not raced before and therefore does not have any past performances to rely on. Therefore, the Company relies on ancestry, or bloodline, and the confirmation of the thoroughbred.

Revenue from Claiming Division

The Company generates revenue from its Claiming Division in two ways: (1) purse winnings and (2) thoroughbreds being claimed from the Company.

The main source of revenue for the Company will be from the purse winnings from the claiming races that the Company’s thoroughbreds will be entered. The purse winnings are distributed as follows: 1st: 60%; 2nd: 20%; 3rd: 12%; 4th: 6%; 5th: 2%. The rest of the field receives $250 per start. There are no fees to enter a thoroughbred in a claiming race.

The Company expects that a thoroughbred will begin to generate revenue from purse winnings within 30-45 days from acquiring the thoroughbred. The Company further expects that it will continue to receive revenue from the thoroughbred every 30-45 days from additional purse winnings.

The Company will also generate revenue if our thoroughbred is claimed by another stable. The Company expects that most thoroughbreds in its claiming division will be claimed from the company (or sold) within 12 months from the date we acquired the thoroughbred. If a thoroughbred is claimed from the Company, we expect to use the revenue from the sale of the thoroughbred to acquire an additional thoroughbred to replace it.

Thoroughbred racing is unpredictable and variable. Thoroughbreds typically race every 30-45 days. Additionally, the Company may decide to wait longer for an upcoming race that favors a horse. As such, our revenue stream may be affected by the uncertainty of when a thoroughbred would be able to race again. This could impact our cash flow from operations and make it difficult to meet recurring operating expenses.

Eligibility to enter a horse into a particular race is determined by the conditions applicable to the race as set forth on the racing card established by the racing secretary. Conditions take into account such factors as age, sex, winnings (including the number of races won, if any, the most recent win(s) and dollar amount of winnings) and state of birth. For claiming races, the claiming price represents, effectively, an additional racing condition because only horses with values consistent with the claiming price will be entered by their owners. For claiming races, there is no person who determines the value of the horse prior to entering the horse into a race. Owners and trainers make the decision of what level of claiming race the horse will be entered on their own accord. We believe that there will be ample opportunities for our horses to race and we do not believe an absence of racing opportunities will limit our revenues.

Office Facilities

The Company's operating offices are located at 205 Ave Del Mar #974, San Clemente, California 92674. The Company’s thoroughbreds are housed with the Company’s trainer at no cost.

However, the owners of the race tracks have begun discussions with regard to charging a day rate for stall space. If this should occur then it would impact the Company’s financial position and increase our costs.

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Results of Operations

For the Period Three Months ending ~~March~~June 3130, 2013, the Company had Net Loss of ($1836,~~228)~~575. This was derived as follows:

Revenue:	$	~~250~~18,200
Discounts:	$	-
COGS:	$	12,179
COGS:	$	-
Expenses:	$	597
Expenses:	$	18,478
Net Loss:	$	36,575
Accrued Taxes:	$	-
Net Loss:	$	(18,228	)

~~From~~For ~~Inception~~the ~~(October~~Period ~~10,~~Six ~~2012)~~Months ~~through~~ending ~~March~~June 3130, 2013, the Company had Net Loss of ($6454,~~475)~~803. This was derived as follows:

Revenue:	$	~~250~~18,450
Discounts:	$	-
COGS:	$	-12,179
Expenses:	$	6461,~~725~~074
Accrued Taxes:	$	-
Net Loss:	$	~~(64~~54,~~475~~803	)

From Inception (October 10, 2012) through June 30, 2013, the Company had Net Loss of $101,050. This was derived as follows:

Revenue:	$	18,450
Discounts:	$	-
COGS:	$	12,179
Expenses:	$	107,321
Accrued Taxes:	$	-
Net Loss:	$	101,050

Dividends

The Company did not issue any dividends.

Reverse Stock Split

The Company performed a 10 for 1 reverse stock split which reduced the Company’s outstanding share count from 449,250,000 to 44,925,000.

Liquidity and Capital Resources

As of ~~March~~June 3130, 2013, the Company had $14,~~575~~ 110 in cash and $2512,~~639~~839 in Thoroughbreds for a total of $2716,~~214~~ 949 in assets. In management’s opinion, the Company’s cash position is insufficient to maintain its operations at the current level for the next 12 months. Any expansion may cause the Company to require additional capital until such expansion began generating revenue. It is anticipated that the raise of additional funds will principally be through the sales of our securities. As of the date of this report, additional funding has not been secured and no assurance may be given that we will be able to raise additional funds.

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If the Company is not able to able to raise or secure the necessary funds required to maintain our operations and fully execute our business then the Company would be required to cease operations.

As of ~~March~~June 3130, 2013, our total liabilities were $3662,~~064~~373. This is broken down as:

Accounts payable	$	710,~~089~~431
Other liabilities		~~1,000~~-
Notes payable- related party		2751,~~975~~942
Total liabilities	$	3662,~~064~~373

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The Notes payable-related party is broken down as follows:

Date	~~Debt holder~~Debtor	Amount		Interest rate			Paid		Maturity
December 31, 2012	Joseph Wade	$	~~625~~621.80		0	%	$	0621.80	~~December 31, 2013~~Paid
February 23, 2013	Joseph Wade	$	13,700.00		0	%	$	02,378	December 31, 2013
March 10, 2013	Joseph Wade	$	13,~~650~~625.00		0	%	$	0	December 31, 2013
April 4, 2013	Joseph Wade	$	7,000.00		0	%	$	0	December 31, 2013
April 19, 2013	Joseph Wade	$	1,000.00		0	%	$	0	December 31, 2013
April 22, 2013	Joseph Wade	$	50.00		0	%	$	0	December 31, 2013
May 9, 2013	Joseph Wade	$	1,000.00		0	%	$	0	December 31, 2013
May 19, 2013	Joseph Wade	$	3,500.00		0	%	$	0	December 31, 2013
May 28, 2013	Joseph Wade	$	3,100.00		0	%	$	0	December 31, 2013
May 30, 2013	Joseph Wade	$	572.06		0	%	$	0	December 31, 2013
June 3, 2013	Joseph Wade	$	1,129.94		0	%	$	0	December 31, 2013
June 11, 2013	Joseph Wade	$	1,615.00		0	%	$	0	December 31, 2013
June 28, 2013	Joseph Wade	$	4,000.00		0	%	$	0	December 31, 2013

~~Other~~During ~~liabilities~~fiscal 22013, we expect that the legal and accounting costs of being a public company will continue to impact our liquidity. The expected costs of these are approximately $15,000 to $20,000. This ~~shares~~amount ~~are~~is ~~due~~expected to ~~various~~possibly ~~investors~~increase ~~for~~to ~~which~~$25,000 ~~proceeds~~once ~~have~~the ~~been~~Company ~~received~~begins ~~but~~acquiring ~~shares~~thoroughbreds ~~have~~in ~~not~~our ~~been~~own ~~issued~~name. Our ~~The~~officers, ~~proceeds~~directors ofand principal shareholders have verbally agreed to provide $1100,000 ~~were~~in ~~recorded~~financing asthat acan ~~liability~~be asused ofto ~~March~~cover 31these expenses. However, ~~2013~~there ~~because~~is no guarantee that we will receive the ~~investors~~funds ~~have~~from ~~not~~our ~~signed~~officers and directors since there is no legal commitment or obligation. Other than the ~~necessary~~anticipated ~~agreements~~increases in legal and accounting costs due to the reporting requirements of being a reporting company, we are not aware of any other known trends, events or uncertainties, which may affect our future liquidity.

During fiscal 2013, we expect that the legal and accounting costs of being a public company will continue to impact our liquidity. The expected costs of these are approximately $15,000 to $20,000. This amount is expected to possibly increase to $25,000 once the Company begins acquiring thoroughbreds in our own name. Our officers, directors and principal shareholders have verbally agreed to provide $40,000 in financing that can be used to cover these expenses. However, there is no guarantee that we will receive the funds from our officers and directors since there is no legal commitment or obligation. Other than the anticipated increases in legal and accounting costs due to the reporting requirements of being a reporting company, we are not aware of any other known trends, events or uncertainties, which may affect our future liquidity.

SC Capital Revolving Line of Capital

On February 1, 2013, the Company entered into an agreement with SC Capital for a revolving line of credit of $500,000 ~~to acquire the company’s initial thoroughbreds~~. On InJuly ~~the~~25, ~~opinion of management~~2013, ~~available funds will not satisfy our growth requirements for~~ the ~~next twelve months. The~~ Company ~~needs~~was tonotified ~~raise~~that anSC ~~additional~~Capital ~~$1,350,000~~desired to ~~acquire~~cancel ~~a total of 50 thoroughbreds for its claiming division by~~ the ~~end~~line of ~~December 2013~~credit.~~The~~ As ~~Company~~such, ~~expects~~the ~~that~~line ~~it needs a minimum~~ of ~~$100,000~~credit towas ~~begin~~cancelled toon ~~implement~~July ~~its business plan which will be taken from the $500~~25,~~000~~ ~~line of credit with~~ 2013. SC Capital~~. This~~ isstated the ~~only~~reason ~~amount and~~ for ~~that~~the ~~our~~cancellation ~~officer,~~was ~~director~~the ~~and~~delay ~~principal~~in ~~shareholders~~the ~~have~~Company ~~committed~~obtained toa ~~which~~ticker ~~will~~symbol befrom ~~sufficient~~FINRA toand ~~fund~~that the ~~company's~~line ~~current~~had ~~operations~~not ~~and~~been ~~its~~used ~~expenses~~since ~~related~~its toinception ~~being~~in aFebruary ~~public company for the next 12 months~~2013.

The Company intends to use $100,000 of the $500,000 line of credit to begin to fully execute its plan of operations. This is broken down as follows:

Acquisition of thoroughbreds:	$50,000
Reserve for Thoroughbred Direct Cost ( i.e. Training fees):	$30,000
Working Capital:	$20,000 for general administrative purposes and the Company’s on-going reporting obligations as a public company

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The Company acquired its initial thoroughbred from our CEO. Our CEO claimed the thoroughbred on behalf of the Company since the Company it still waiting to finalize its licensing from the State of California. The initial $100,000 will allow the Company to acquire 4 thoroughbreds. Thereby, allowing the Company to begin generating revenue to cover the expenses related to the Company's operations and its public reporting requirements. The Company will need to raise an additional $1,350,000 to acquire an additional 50 thoroughbreds. The Company expects to require the additional funding in August 2013. The Company's inability to raise the necessary capital would negatively impact the Company's ability to generate sufficient revenues to cover its operations and reporting requirements.

Once the Company has acquired 50 thoroughbreds, the Company will begin to expand its operations into additional states. The Company has not performed any research as to which states to expand into but expects to begin doing so in the next 6 months. The Company anticipates that it will need to raise an additional $1,000,000 to expand its operations into these other states. The Company expects to be able begin expanding its operations beginning in January 2014. If the Company is not able to raise sufficient capital, it would limit the Company's ability to expand and increase the number of its horses.

Timing needs for Funding

Immediate needs (current through August 2013)

$100,000: This capital is intended to be used to claim the initial 4 thoroughbreds, the Company has already acquired 2 thoroughbreds, and general expenses until we can begin generating revenue. This amount includes $50,000 to acquire the thoroughbreds, $30,000 for a reserve for the thoroughbreds direct monthly cost, and $20,000 for the on-going operations of the Company and the company's on-going reporting requirements. The Company expects the monthly costs of the thoroughbreds to be approximately $14,000 per month. The Company’s reserve of $30,000 for the thoroughbred’s monthly costs is intended to provide the company approximately 2 months of expenses for the thoroughbreds acquired. The Company will use the $500,000 line of credit to implement this initial phase of its business plan.

The expenses directly associated to each thoroughbred acquired are $50 - $125 per day depending on the trainer and the vet needs of each thoroughbred. The Company expects to begin generating revenue from within 30-45 days of the acquisition of a thoroughbred in its claiming division. The revenue will consist of purse winning and from any thoroughbred claimed from our stable. If a thoroughbred is claimed from us we intend to use the revenue from the claim to acquire a replacement thoroughbred.

The Company's current monthly burn rate is between $6,700 - $7,000 per month, which includes approximately $6,000 for training fees associated with the Company’s thoroughbreds. This is expected to increase to $8,700 - $9,000 once the Company becomes a reporting company which includes the expected monthly costs of $2,000 associated with being a reporting company. The Company's monthly burn rate consists of the direct costs of the thoroughbreds the Company has acquired (such as training and vet fees) and the expected on-going general expenses of the Company (such as filing fees, audits and general administrative expenses).

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Once the Company acquires the 4 initial thoroughbreds for its claiming division, the Company's monthly burn rate is expected to be $16,000 including $14,000 in thoroughbred expenses and $2,000 in fees associated to be a reporting company.

The company has included the $30,000 reserve since the Company expects it will take approximately 25 – 30 days from the date a thoroughbred is acquired before revenue may be generated from its purse winnings. As such the Company has included the initial months expenses of approximately $14,000 (as in the above stated financing requirements to cover the initial month's burn rate for the thoroughbreds acquired with the above referred to financing. The remaining $16,000 is considered a reserve for the thoroughbred expenses incurred by the Company. The Company expects to begin generating revenue within 30-45 days of the acquisition of the thoroughbreds in its claiming division and as such the on-going monthly burn rate should be covered by the revenue generated from the thoroughbreds. However, there is no guarantee that the Company's revenue would be able to cover the Company's monthly burn rate.

If the Company's revenue is not sufficient to cover the monthly burn rate, the Company would be required to raise additional funds to cover those expenses. The Company will not know the amount that would be required to be raised to cover the monthly burn rate until the Company is able to determine what its monthly revenue is.

If the Company's revenue is not sufficient to cover the monthly burn rate and the Company cannot raise additional funds to cover those expenses, then the Company would have to sell its thoroughbreds. This may require the Company to sell its thoroughbreds for less than the Company purchased the thoroughbred.

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Short-term needs (August 2013 through December 2013)

The Company needs to raise $1,750,000 grow our stable to include a total of 50 thoroughbreds. This is broken down as follows:

Acquisition of thoroughbreds:	$	1,250,000

Reserve for Thoroughbred Direct Cost ( i.e. Training fees):	$	500,000

Total	$	1,750,000

$1,750,000: This amount is needed for the Company to be able to acquire the additional thoroughbreds to grow our stable to a total of 50 thoroughbreds. The Company has obtained a $500,000 revolving line of credit which can be used toward the $1,750,000. $100,000 of the line of credit will be used for the initial phase. As such, the Company will still need to raise an additional $1,350,000 to acquire the additional thoroughbreds to grow our stable to of 50 thoroughbreds.

The $1,750,000 includes the $1,250,000 to acquire the thoroughbreds and $500,000 for the reserve for thoroughbred direct monthly costs. The expenses directly associated to the thoroughbred acquired with this funding are $50 - $125 per day depending on the trainer and the vet needs of each thoroughbred. The Company expects to begin generating revenue from within 30-45 days of the acquisition of a thoroughbred in its claiming division. The revenue will consist of purse winning and from any thoroughbred claimed from our stable. If a thoroughbred is claimed from us we intend to use the revenue from the claim to acquire a replacement thoroughbred. The Company’s reserve for the thoroughbred’s monthly costs is for approximately 8-9 weeks of expenses for the thoroughbreds.

Once the Company has a total of 50 thoroughbreds in our claiming division, the Company's monthly burn rate is expected to be $200,000 including cost associated with being a reporting company. The Company has included $200,000 (from the $500,000 for the reserve for direct monthly cost of the thoroughbreds) in the above stated financing requirements to cover the increases in the monthly burn rate for the thoroughbreds it acquires with the above referred to financing. The remaining $300,000 is considered a reserve for thoroughbred expenses by the Company. The Company's thoroughbreds are expected to begin generating revenue within 30-45 days of its acquisition and as such the on-going monthly burn rate would be covered by the revenue generated from the thoroughbreds. However, there is no guarantee that the Company's revenue would be able to cover the Company's monthly burn rate. There is no guarantee that the provided estimates on our burn rates will be our actual burn rates.

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Mid-term needs (December 2013 through April 2014)

The Company needs to raise $1,000,000 to expand to additional states. This is broken down as follows:

Acquisition of thoroughbreds:	$	800,000

Reserve for Thoroughbred Direct Cost ( i.e. Training fees):	$	200,000

Total:	$	1,000,000

$1,000,000: This amount is needed for the Company for to expand its operations into additional states. The Company has not determined which states it intends to expand into. The capital raised will allow the Company to be able to acquire 25 thoroughbreds in the new state. This amount includes the $800,000 to acquire the thoroughbreds, and $200,000 for the reserve for thoroughbred direct monthly expenses of the thoroughbreds. The Company expects it on-going monthly expenses directly associated to the thoroughbreds in its claiming division to be approximately $50 to $125 per day for each thoroughbred the Company owns. The fee depends on the trainer's fee and the amount of vet bills each thoroughbred requires. The Company expects to begin generating revenue from these thoroughbreds within 30-45 days of their acquisition. The revenue generated will consist of purse winnings. The Company’s reserve for the thoroughbred’s monthly costs is for approximately 8-9 weeks of expenses for the thoroughbreds.

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Once the Company has a total of 25 thoroughbreds in the additional state, the Company's monthly burn rate for the additional horses would be is expected to be $100,000. The Company has included $100,000 (from the $200,000 for the direct monthly cost of the thoroughbreds) in the above stated financing requirements to cover the increases in the monthly burn rate for the thoroughbreds it acquires. The Company's thoroughbreds are expected to begin generating revenue within 30-45 days of its acquisition and as such the on-going monthly burn rate would be covered by the revenue generated from the thoroughbreds. However, there is no guarantee that the Company's revenue would be able to cover the Company's monthly burn rate. The Company's total number of horses would be 75 and would have an expected monthly burn rate of $300,000 per month. There is no guarantee that the provided estimates on our burn rates will be our actual burn rates.

If Company's revenue is not sufficient to cover the expenses for its 50 thoroughbreds in the claiming division, the Company would not be able to expand to additional states.

Long-term needs (April 2014 - December 2014)

The Company needs to raise $2,000,000 to fully expand to additional states. This is broken down as follows:

Acquisition of thoroughbreds:	$	1,500,000

Reserve for Thoroughbred Direct Cost ( i.e. Training fees):	$	500,000

Total:	$	2,000,000

$2,000,000: The Company expects to need to raise $2,000,000 to fully implement its expansion into other states. The Company would expect to acquire 60 additional horses as part of its expansion plan. This amount includes the $1,500,000 to acquire the thoroughbreds, and $500,000 for the direct monthly expenses of the thoroughbreds. The Company expects it on-going monthly expenses directly associated to the thoroughbreds in its claiming division to be approximately $50 to $125 per day for each thoroughbred the Company owns. The fee depends on the trainer's fee and the amount of vet bills each thoroughbred requires. The Company expects to begin generating revenue from these thoroughbreds within 30-45 days of their acquisition. The revenue generated will consist of purse winnings.

Once the Company has acquired the additional 60 thoroughbreds, the Company's monthly burn rate for the additional horses would be is expected to be $225,000. The Company has included $225,000 (from the $500,000 for the direct monthly cost of the thoroughbreds) in the above stated financing requirements to cover the increases in the monthly burn rate for the thoroughbreds it acquires. The Company's thoroughbreds are expected to begin generating revenue within 30-45 days of its acquisition and as such the on-going monthly burn rate would be covered by the revenue generated from the thoroughbreds. However, there is no guarantee that the Company's revenue would be able to cover the Company's monthly burn rate. The Company's total number of horses would be 130 and would have an expected monthly burn rate of $525,000 per month. There is no guarantee that the provided estimates on our burn rates will be our actual burn rates.

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Claiming Division funding from above capital

The Company will acquire its thoroughbreds as our capital position permits. As such, the Company has entered into an agreement with SC Capital for a revolving line of credit of $500,000 to acquire the company’s initial thoroughbreds. The Company needs to raise an additional $1,350,000 to acquire a total of 50 thoroughbreds for its claiming division. If the Company is able to raise capital quicker than we currently expect, than we would acquire thoroughbreds at a faster pace. Likewise, if we raise money at a slower rate, than we expect than we will acquire thoroughbreds at a slower pace. Our ability and timing of the acquisition of the additional thoroughbreds is dependent on the Company raising the required capital to acquire the thoroughbred and to maintain the stable until our revenue is sufficient to cover the monthly costs of the thoroughbreds. The Company is expecting to begin to acquiring the initial 4 thoroughbreds for its claiming division in May 2013 and to have the capital available beginning in June 2013 to begin acquiring the remaining 50 thoroughbreds to fully build out our California stables. The Company expects, subject to raising the necessary capital, to acquire the 50 thoroughbreds by the end of December 2013 and therefore provide the Company with the infrastructure and revenue to support our expansion of the Company's operations into other states.

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Emerging Growth Company Status

We are an “emerging growth company” as defined under the Jumpstart Our Business Startups Act, commonly referred to as the JOBS Act. We will remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.

As an “emerging growth company,” we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to:

•

not being required to comply with the auditor attestation requirements of section 404(b) of the Sarbanes-Oxley Act (we also will not be subject to the auditor attestation requirements of Section 404(b) as long as we are a “smaller reporting company,” which includes issuers that had a public float of less than $ 75 million as of the last business day of their most recently completed second fiscal quarter);

•

reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and

•

exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

In addition, Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Under this provision, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. In other words, an “emerging growth company” can delay the adoption of such accounting standards until those standards would otherwise apply to private companies until the first to occur of the date the subject company (i) is no longer an “emerging growth company” or (ii) affirmatively and irrevocably opts out of the extended transition period provided in Securities Act Section 7(a) (2) (B). The Company has elected to take advantage of this extended transition period and, as a result, our financial statements may not be comparable to the financial statements of other public companies. Accordingly, until the date that we are no longer an “emerging growth company” or affirmatively and irrevocably opt out of the exemption provided by Securities Act Section 7(a) (2) (B), upon the issuance of a new or revised accounting standard that applies to your financial statements and has a different effective date for public and private companies, clarify that we will disclose the date on which adoption is required for non-emerging growth companies and the date on which we will adopt the recently issued accounting standard.

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ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There has been no material change in the market risks discussed in Item 7A of Capall Stables, Inc. Form S-1 for the fiscal year ended December 31, 2012.

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ITEM 4 – CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

Our principal executive and principal financial officers have evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a – 15(e) and 15d – 15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods required under the SEC’s rules and forms and that the information is gathered and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure.

Our principal executive officer and principal financial officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report.

This ~~annual~~quarterly report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to Rule 308(b) of Regulation S-K, which permits the Company to provide only management’s report in this Annual Report.

Management’s Remediation Initiatives

As our resources allow, we will add financial personnel to our management team. We plan to prepare written policies and procedures for accounting and financial reporting to establish a formal process to close our books monthly on an accrual basis and account for all transactions, including equity transactions. We will also create an audit committee made up of our independent directors.

(b) Changes In Internal Control Over Financial Reporting

WeThere ~~need~~have tobeen ~~prepare~~no ~~written~~changes ~~policies~~in ~~and~~the ~~procedures~~Internal ~~for~~Controls ~~accounting~~over ~~and~~Financial ~~financial~~Reporting ~~reporting~~since tothe ~~establish~~Company’s a10-Q ~~formal process to close our books monthly on an accrual basis and account~~ for ~~all~~the ~~transactions,~~period ~~including~~ending ~~equity~~March ~~transactions~~31, ~~and prepare, review and submit SEC filings in a timely manner~~2013.

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PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

The above statement notwithstanding, shareholders and prospective investors should be aware that certain risks exist with respect to the Company and its business, including those risk factors contained in our most recent Registration Statements on Form S-1, as amended. These risks include, among others: limited assets, lack of significant revenues and only losses since inception, industry risks, we have a limited number of thoroughbred, and the need for additional capital. The Company’s management is aware of these risks and has established the minimum controls and procedures to insure adequate risk assessment and execution to reduce loss exposure.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. ~~SUBMISSION~~MINE OFSAFTEY ~~MATTERS TO A VOTE OF SECURITY HOLDERS~~DISCLOSURES

~~None~~Not Applicable.

ITEM 5. OTHER INFORMATION

There was no other information during the quarter ended ~~March~~June 3130, 2013 that was not previously disclosed in our filings during that period.

ITEM 6. EXHIBITS

31.1	Certifications pursuant to Section 302 of Sarbanes Oxley Act of 2002
31.2	Certifications pursuant to Section 302 of Sarbanes Oxley Act of 2002
32.1	Certifications pursuant to Section 906 of Sarbanes Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

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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, there unto duly authorized.

CAPALL STABLES, INC.

	CAPALL STABLES, INC.

Date: August 5, 2013	By: /s/ Joseph Wade
	Joseph Wade Chief Executive Officer, Chief Financial and Accounting Officer

~~Date: May 9, 2013 By: /s/ Joseph Wade Joseph Wade Chief Executive Officer, Chief Financial and Accounting Officer~~21

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