UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended: March 31, 2008

OR

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from _________ to _________

Commission file number: 333-141010

MH&SC, INCORPORATED
(Name of small business issuer in its charter)

Delaware
  
20-4947667
(State or other jurisdiction of
  
(I.R.S. Employer
incorporation or organization)
  
Identification No.)

3505 Castlegate Ct.
    
Lexington, Kentucky
  
40502
(Address of principal executive offices)
  
(Zip code)
 
Issuer's telephone number: (859) 317-1166
 
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 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
  
Accelerated filer                      o
Non-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:
 
Class – Common Stock, 6,265,000 shares outstanding as of May 1, 2008.
 
 
TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
  
1
     
 
Item 1. Unaudited Financial Statements
  
1
       
 
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
  
6
       
 
Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
8
       
 
Item 4. Controls and Procedures
  
8
       
PART II - OTHER INFORMATION
  
9
     
 
Item 1. Legal Proceedings
  
9
       
 
Item 1A. Risk Factors
  
9
       
 
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
9
       
 
Item 3. Defaults Upon Senior Securities
  
9
       
 
Item 4. Submission of Matters to a Vote of Security Holders
  
9
       
 
Item 5. Other Information
  
9
       
 
Item 6. Exhibits
  
9
       
Signatures
    
     
Exhibits
    
 
i
 
PART I - FINANCIAL INFORMATION
 
Item 1.
FINANCIAL STATEMENTS (UNAUDITED)

The accompanying unaudited financial statements of MH&SC, Incorporated (“MH&SC” or the “Company”) have been prepared in accordance with generally accepted accounting principles in the United States for interim financial reporting and pursuant to the rules and regulations of the Securities and Exchange Commission ("Commission"). While these statements reflect all normal recurring adjustments which are, in the opinion of management, necessary in order to make the financial statements not misleading and for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the financial statements and footnotes thereto, for the fiscal year ended December 31, 2007, previously filed with the Commission, which are included in the Company's Annual Report filed on Form 10-KSB.
 
MH&SC, INCORPORATED
INDEX TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
   
Page(s)
     
Consolidated Balance Sheets as of March 31, 2008 and December 31, 2007 (unaudited)
  
2
     
Consolidated Statements of Operations for the Three Months ended March 31, 2008 and 2007 (unaudited)
  
3
     
Consolidated Statements of Cash Flows for the Three Months ended March 31, 2008 and 2007 (unaudited)
  
4
     
Notes to Consolidated Financial Statements (unaudited)
 
5
 
1
 
MH&SC, INCORPORATED
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2008 AND DECEMBER 31, 2007
(UNAUDITED)
 
   
March 31,
  
December 31,
  
   
2008
  
2007
  
ASSETS
          
           
CURRENT ASSETS
          
Cash
  
$
3,010
  
$
5,540
  
Accounts receivable
    
2,221
    
863
  
Total current assets
    
5,231
    
6,403
  
Fixed assets, net of accumulated depreciation of $1,936 and $1,815 at March 31, 2008 and December 31, 2007, respectively
    
484
    
605
  
Goodwill
    
31,000
    
31,000
  
               
TOTAL ASSETS
  
$
36,715
  
$
38,008
  
               
LIABILITIES AND STOCKHOLDERS' DEFICIT
              
               
CURRENT LIABILITIES
              
Accounts payable
 
$
69,072
  
$
62,163
  
Related party payables
    
121,000
    
121,000
  
Accrued interest and sales tax payable
    
13,413
    
10,567
  
Total current liabilities
    
203,485
    
193,730
  
               
STOCKHOLDERS' DEFICIT
              
Preferred stock, $0.000001 par value, 20,000,000 shares authorized, none issued and outstanding
    
-
    
-
  
Common stock, $0.000001 par value, 1,000,000,000 shares authorized, 6,265,000 shares issued and outstanding at March 31, 2008 and December 31, 2007, respectively
    
6
    
6
  
Additional paid in capital
    
144,499
    
144,499
  
Deficit accumulated during the exploration stage
    
(311,275
)
  
(300,227
)
Total stockholders' deficit
    
(166,770
)
  
(155,722
)
               
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
 
$
36,715
  
$
38,008
  

The accompanying notes are an integral part of these financial statements.
 
2
 
MH&SC, INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007
(UNAUDITED)
 
   
March 31,
  
March 31,
  
   
2008
  
2007
  
REVENUE
  
$
103,247
  
$
102,055
  
COST OF REVENUES
    
71,912
    
71,489
  
GROSS PROFIT
    
31,335
    
30,566
  
OPERATING EXPENSES
              
Advertising expense
    
9,227
    
14,222
  
Professional fees
    
7,240
    
43,000
  
Commissions and consulting fees
    
13,440
    
11,200
  
General and administrative
    
9,278
    
9,701
  
Depreciation
    
121
    
155
  
Total operating expenses
    
39,316
    
78,278
  
               
NET (LOSS) BEFORE OTHER EXPENSE
    
(7,981
)
  
(47,712
)
OTHER EXPENSE
              
Interest expense
    
(3,067
)
  
(1,878
)
Total other expense
    
(3,067
)
  
(3,067
)
NET (LOSS)
  
$
(11,048
)
$
(49,590
)
NET (LOSS) PER SHARE BASIC AND DILUTED
  
$
(0.00
)
$
(0.01
)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
    
6,265,000
    
6,265,000
  
 
The accompanying notes are an integral part of these financial statements.
 
3
 
MH&SC, INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007
(UNAUDITED)

   
THREE MONTHS ENDED
  
   
MARCH 31,
  
   
2008
  
2007
  
CASH FLOWS FROM OPERATING ACTIVITIES:
          
Net (loss)
  
$
(11,048
)
$
(49,590
)
Adjustments to reconcile net loss to net cash used in Operating activities:
              
Depreciation
    
121
    
155
  
Change in assets and liabilities
              
Decrease (Increase) in accounts receivable
    
(1,358
)
  
1,908
  
Increase in accounts payable
    
9,755
    
12,746
  
Total adjustments
    
8,518
    
14,809
  
               
Net cash (used in) operating activities
              
     
(2,530
)
  
(34,781
)
CASH FLOWS FROM FINANCING ACTIVITIES:
              
Issuance of stock for cash and subscriptions receivable
    
-
    
500
  
Payment of note payable
    
-
    
(75,000
)
Advances by related parties
    
-
    
116,000
  
Net cash provided by financing activities
    
-
    
41,500
  
               
NET INCREASE IN CASH AND CASH EQUIVALENTS
    
(2,530
)
  
6,719
  
               
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD
    
5,540
   
2,926
  
               
CASH AND CASH EQUIVALENTS - END OF PERIOD
  
$
3,010
  
$
9,645
  

The accompanying notes are an integral part of these financial statements.
 
4
 
MH&SC, INCORPORATED
Notes to Consolidated Financial Statements
(unaudited)
 
NOTE 1 – BASIS OF PRESENTATION

The accompanying unaudited interim financial statements of MH&SC, Incorporated 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 MH&SC’s audited 2007 annual financial statements and notes thereto filed with the SEC on form 10-KSB. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the result of operations for the interim periods presented have been reflected herein. The results of operations 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 MH&SC’s 2007 annual financial statements have been omitted.

NOTE 2 - GOING CONCERN

MH&SC’s financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business for the foreseeable future. Since inception, the Company has accumulated losses aggregating to $311,275 and has a working capital deficit of $198,254 at March 31, 2008. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. Management intends to finance these deficits through the sale of stock.
 
5
 
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 

The following discussion should be read in conjunction with our financial statements and the notes thereto which appear elsewhere in this report. The results shown herein are not necessarily indicative of the results to be expected in any future periods. This discussion contains forward-looking statements based on current expectations, which involve uncertainties. Actual results and the timing of events could differ materially from the forward-looking statements as a result of a number of factors.

Forward-Looking Statements

The following discussion and analysis is provided to increase the understanding of, and should be read in conjunction with, the Financial Statements of the Company and Notes thereto included elsewhere in this Report. Historical results and percentage relationships among any amounts in these financial statements are not necessarily indicative of trends in operating results for any future period. The statements, which are not historical facts contained in this Report constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based on currently available operating, financial and competitive information, and are subject to various risks and uncertainties. Future events and the Company's actual results may differ materially from the results reflected in these forward-looking statements. Factors that might cause such a difference include, but are not limited to, dependence on existing and future key strategic and strategic end-user customers, limited ability to establish new strategic relationships, ability to sustain and manage growth, variability of operating results, the Company's expansion and development of new service lines, marketing and other business development initiatives, the commencement of new engagements, competition in the industry, general economic conditions, dependence on key personnel, the ability to attract, hire and retain personnel who possess the technical skills and experience necessary to meet the service requirements of its clients, the potential liability with respect to actions taken by its existing and past employees, risks associated with international sales, and other risks described herein and in the Company's other SEC filings.

Overview

The online retail industry has experienced growth in the past and is expected to continue to grow in the future. The major risks associated with our company as the online retail industry evolves is that shoppers are turning to respected brick and mortar retailers who have also established online retail operations, with purchasers knowing they can return merchandise to local stores if they need to. Strong offline brands may continue to win online market share. Also, online price conscious shoppers will put even more pressure on companies that rely upon low prices to attract customers. The likely winners may be those companies that can leverage their global size to buy product from suppliers for the lowest price.
 
6
 
In a highly competitive online personal care marketplace, innovation is the key to top-line sales growth. Inherent risks in our competitive strategy include uncertainties concerning trade and consumer acceptance, the effects of recent consolidations of retailers and distribution channels, and competitive reaction. Some of our major competitors have undergone consolidation, which could result in increased competition and alter the dynamics of the industry. Such consolidation may give competitors greater financial resources and greater market penetration and enable competitors to offer a wider variety of products and services at more competitive prices, which could adversely affect the our financial results. It may be necessary for us to lower prices on its products and increase spending on advertising and promotions, each of which could adversely affect our financial results.
 
According to the Incontinence Support Center website, http://www.incontinentsupport.org, more than 19 million North American adults have some form of incontinence. However, medical science continues to discover more options for incontinence treatment and management everyday which may impact sales. Surgeries are less invasive with fewer side effects and quicker recovery; more medications are available.

Also, our line of incontinence care products contain certain materials which are principally derived from petroleum. These materials are subject to price fluctuations based on changes in petroleum prices, availability and other factors. Significant increases in prices for these materials could adversely affect the Corporation’s earnings if selling prices for its products are not adjusted or if adjustments significantly trail the increases in prices for these materials.

Although there is currently no known pending state or federal legislation that would impact either the manufacturing operations or the financial outlook of this corporation, the potential always exits that such standards may be changed in the future.

Analysis of Financial Condition and Results of Operation

Three Months Ended March 31, 2008 and March 31, 2007

There were revenues of $103,247 for the three-month period ended March 31, 2008, as compared to $102,055 for the same period in 2007 for MH&SC, Incorporated. Revenues were up 1.17% due to repeat customer business. Cost of goods sold for the three-month period ended March 31, 2008, was $71,912 compared to $71,489 in 2007. The percentage of increase was de-minimus. This left a gross profit of $31,335 for us during the three-month period ended March 31, 2008 and a gross profit of $30,566 for the same period in 2007. The increase in gross profit was 2.52%.

Operating expenses were $39,316 for MH&SC, Incorporated during the three-month period ended March 31, 2008, and were $78,278 for the same period in 2007. The expenses were composed primarily of professional fees which were 18.41% of operating expenses during 2008 and 54.93% of operating expenses during 2007. The 83.16% decrease in professional expenses from the first quarter of 2007 to the first quarter of 2008 is due to the additional audit and legal costs associated with taking the company public during 2007. There was $9,227 of advertising expenses during the first quarter of 2008 compared to $14,222 of advertising expenses during the first quarter of 2007. The 35.12% decrease of advertising is due to severing ties with our search engine optimization firm, Summit Web Marketing, and managing the search engine advertising in-house. During the period ending March 31, 2008, there was search engine advertising of $9,227 which composed 100% of the advertising costs. For the same period ending in 2007, there was search engine advertising of $13,141 included in the total advertising expense of $14,222. Also, there were $13,440 of commissions and consulting fees for the period ending March 31, 2008 compared to $11,200 of consulting fees for the same period in 2007. The 20% increase of commissions and consulting fees in the first quarter of 2008 is due to the MH&SC Business Manager being paid for six pay periods in 2008, as compared to five pay periods in 2007.
 
7
 
Liquidity and Capital Resources

At March 31, 2008, we had cash on hand of $3,010. Our current assets at March 31, 2008 are $5,231 compared to our current liabilities of $203,485.

Although our subsidiary has operated since July 7, 2003, we have only operated since acquiring our subsidiary on October 26, 2006 and have sustained a loss of $11,048 during the period ending May 31, 2008. We have an accumulated deficit of $311,275 at March 31, 2008.

We will need to secure additional funding to remedy our deficiency in the future. Our officers and directors have orally committed to provide necessary funding. However, they are under no obligation to do so and may not do so. If they do not, we would need to raise additional funds from a sale of debt or equity securities. However, this may not occur, or if it occurs, may not raise the required funding. We do not have any plans or specific agreements for new sources of funding except for management’s commitment. We are currently looking for merger candidates.

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements.

Item 3.
QUANTITATIVE AND QUALITATIVE ANALYSIS ABOUT MARKET RISK

Not applicable.

Item 4.
CONTROLS AND PROCEDURES

An evaluation was carried out under the supervision and with the participation of the Company's management, including the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), of the effectiveness of the Company's disclosure controls and procedures as of March 31, 2008. Based on that evaluation, the CEO and CFO have concluded that the Company’s disclosure controls and procedures are effective to provide reasonable assurance that: (i) information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the Company's management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure by the Company; and (ii) information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

During the quarter ended March 31, 2008, there were no changes in the Company's internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.
 
8
 
PART II - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

None

Item 1A. RISK FACTORS

Not applicable.

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

None

Item 3. DEFAULTS UPON SENIOR SECURITIES.

None

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

None

Item 5. OTHER INFORMATION.

None

Item 6. EXHIBITS

Exhibits required by Item 601 of Regulation S-K

No.
  
Description
     
(2)
  
Exchange Agreement(1)
     
(3)
(i)
Articles of Incorporation of the Company (1)
     
 
(ii)
Amended Articles of Incorporation of the Company(1)
     
 
(iii)
Articles of Organization of My Health and Safety Supply Company, LLC(4)
     
 
(iv)
Bylaws of the Company(1)
     
 
(v)
Operating Agreement of My Health and Safety Supply Company, LLC(1)
 
9
 
(4)
(i)
Form of Common Stock Certificate(1)
     
 
(ii)
Call Option Agreement(1)
     
 
(iii)
Subscription Agreement(3)
     
(10)
Sublease(2)
   
(31)
Certification as Adopted Pursuant to Section 302 (a) of the Sarbanes-Oxley Act of 2002
   
(32)
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
     
 
(1)
Incorporated herein by reference from MH&SC, Incorporated’s Registration Statement on Form SB-2, filed with the Securities and Exchange Commission on March 31, 2007.
     
 
(2)
Incorporated herein by reference from MH&SC, Incorporated’s Amended Registration Statement on Form SB-2, filed with the Securities and Exchange Commission on April 4, 2007.
     
 
(3)
Incorporated herein by reference from MH&SC, Incorporated’s Registration Statement on Form SB-2, filed with the Securities and Exchange Commission on November 14, 2007.
     
 
(4)
Incorporated herein by reference from MH&SC, Incorporated’s Amended Registration Statement on Form SB-2, filed with the Securities and Exchange Commission on August 10, 2007.
 
10
 
SIGNATURES

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

 
MH&SC, INCORPORATED
 
(Registrant)
   
   
Date: May 12, 2008
/s/ Cory Heitz
 
Cory Heitz, President, Principal Executive Officer,
 
Principal Financial Officer and Principal
 
Accounting Officer
 
11