UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark one)

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2009

[ ]	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 000-50048

MOTIVNATION, INC.

(Exact name of small business issuer as specified in its charter)

Nevada		82-6008492

(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer I.D. No.)

8 Corporate Park, Suite 300

Irvine, California 92606

(Address of Principal Executive Offices)

18101 Von Karman Ave. Ste. 330

Irvine, California 92612

(Former Address of Principal Executive Offices)

(949) 266-8979

(Registrant’s telephone number)

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer ( ) Accelerated filer ( )

Non-accelerated filer ( ) Smaller reporting company (X)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes No X

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of August 15, 2009.

Common Stock, Par Value $0.001		147,384,388

Title of Class		Number of Shares Outstanding as of August 15, 2009

TABLE OF CONTENTS

Part I			1
Financial Statement Item			1
Financial Statements			1
Balance Sheet			1
Income Statement			2
Cashflow Statement			3
Financial Footnotes			4
Management Discussion & Analysis or Plan of Operations			14
Quantitative and Qualitative Disclosures About Market Risk			20
Controls and Procedures			20
Part II			21
Legal Proceedings			21
Risk Factors			22
Unregistered Sales of Equity Securities and Use of Proceeds			22
Defaults Upon Securities			22
Submission to a Vote			22
Other Information			23
Exhibits and Reports			24
Signatures			25

Exhibits

Index to Exhibits			27
Exhibits			28

Except as otherwise noted in this report, “MotivNation,” the “Company,” “we,” “us” and “our” collectively refer to MotivNation, Inc.

MOTIVNATION, INC.

CONSOLIATED BALANCE SHEETS

	As of June 30,	As of December 31,
	2009	2008
	(Unaudited)	(Audited)
ASSETS
Current Assets
Cash	$ 4,074	$ 15,155
Cash in Escrow	-	17,500
Net assets of TrixMotive held for liquidation	70,496	70,496
Total Current Assets	74,570	103,151

Debt issuance cost, net	264	264

TOTAL ASSETS	$ 74,834	$ 103,415
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable	$ 20,274	$ 30,039
Accrued liabilities	792,548	750,662
Net liabilities of discontinued operations	54,678	52,234
Net liabilities of TrixMotive in liquidation	493,583	494,234
Convertible notes payable, net, current portion	2,467,172	1,876,140
Short-term notes payable to related parties	195,233	195,233
Short-term notes payable, others	8,000	-
Total Current Liabilities	4,031,488	3,398,542
Long-Term Debt
Convertible notes payable, net of unamortized discount of $497,813 and	306,259	39,731
$627,809 for 2009 and 2008, respectively
Derivative liabilities	6,907,363	5,245,580
Total Long-Term Liabilities	7,213,622	5,285,311
Total Liabilities	11,245,110	8,683,853
Stockholders' Deficit
Common Stock, $0.001 par value; 300,000,000 shares authorized;
issued and outstanding 2009 147,384,388 shares; 2008 106,253,188 shares	147,562	106,431
Paid-in Capital	2,476,542	2,504,619
Accumulated deficit	(13,794,380)	(11,191,488)
Total Stockholders' Deficit	(11,170,276)	(8,580,438)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 74,834	$ 103,415

See notes to interim unaudited consolidated financial statements

MOTIVNATION, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

	For three months ended		For Six Months ended
	June 30, 2009		June 30, 2009
	2009	2008	2009	2008
Operating Expenses:
Selling, general and administrative Expenses	$ 45,969	$ 74,156	$ 92,571	$ 133,223
Total Operating Expenses	45,969	74,156	92,571	133,223

Operating loss	(45,969)	(74,156)	(92,571)	(133,223)

Other income(expenses)
Interest and other income	-	1	1	109
Change in derivative liabilities	4,891	(61,106)	(104,136)	(292,691)
Interest expense	(104,838)	(46,537)	(704,910)	(91,891)
Financing costs	(583,952)	(711,981)	(1,696,333)	(924,654)
Total other income(expenses)	(683,899)	(819,623)	(2,505,378)	(1,309,127)

Net loss before state franchise tax	(729,868)	(893,779)	(2,597,949)	(1,442,350)

State franchise tax	-	-	2,400	2,400

Net loss from continuing operations	(729,868)	(893,779)	(2,600,349)	(1,444,750)

Discontinued Operations
Net income (loss) from discontinued operations
(net of applicable taxes of $0 for 2009 and 2008)	(1,384)	31,009	(2,543)	(16,622)

Net loss	$ (731,252)	$ (862,770)	$ (2,602,892)	$ (1,461,372)

Net loss from continuing operations per share-Basic and Diluted	$ (0.01)	$ (0.03)	$ (0.02)	$ (0.06)
Net loss	$ (0.01)	$ (0.03)	$ (0.02)	$ (0.07)
Weighted Average Number of Shares	141,209,124	26,288,158	134,433,507	22,235,491

See notes to interim unaudited consolidated financial statements

MOTIVNATION, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

For the six months ended June 30,	2009	2008
CASH FLOW FROM OPERATING ACTIVITIES FROM CONTINUING OPERATIONS:
Net loss	$ (2,602,892)	$(1,461,372)
Add: Net loss from discontinued operations, net of tax	2,543	16,622
Adjustments to reconcile net loss to net cash used in operating activities:
Noncash interest expense and financing costs	2,204,498	924,654
Change in derivative liabilities	104,136	292,691
(Increase) Decrease in:
Prepaid and other assets	-	1,350
Increase (Decrease) in:
Accounts payable and accrued liabilities	255,884	139,428
Net cash flows used in operating activities from continuing operations	(35,831)	(86,627)
CASH FLOW FROM INVESTING ACTIVITIES FROM CONTINUING OPERATIONS:
Decrease in cash in escrow	17,500	-
Net cash flows provided by (used in) investing activities from continuing operations	17,500	-
CASH FLOW FROM FINANCING ACTIVITIES FROM CONTINUING OPERATIONS:
Proceeds from notes payable, others	8,000	-
Proceeds from convertible debt	-	100,000
Net cash flows provided by financing activities from continuing operations	8,000	100,000
NET CASH PROVIDED BY(USED IN) CONTINUING OPERATIONS	(10,331)	13,373
NET CASH USED IN DISCONTINUED OPERATIONS	(750)	(48,721)
NET DECREASE IN CASH	(11,081)	(35,348)
CASH AT BEGINNING OF PERIOD	15,155	90,672
CASH AT END OF PERIOD	$ 4,074	$ 55,324
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Noncash Investing and Financing Activities:
Conversion of notes payable	$ 4,364	$ 8,820
Transfer unamortized discount to paid in capital due to debt conversion	$ -	$ 3,890
Transfer derivative liabilities to paid in capital due to debt conversion	$ 8,690	$ 16,587
Conversion of accrued interest into convertible debt	$ 223,763	$ 288,174
Issuance of warrants in lieu of convertible debt	$ -	$ 15,000
Recorded a beneficial conversion feature	$ 1,566,337	$ 820,887

See notes to interim unaudited consolidated financial statements

MOTIVNATION, INC.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – NATURE OF BUSINESS

MotivNation (“the Company”) was incorporated on April 26, 1946, under the laws of the State of Idaho. In 2003, the Company merged into its wholly-owned Nevada subsidiary, and changed its corporate domicile from the State of Idaho to the State of Nevada. MotivNation, Inc. provides a range of services that cater to the custom automotive enthusiast.

In fourth quarter of 2007, the Company discontinued the customizing motorcycles business with Damon’s Motorcycle Creation.

On July 18, 2008, the Company’s principal operating wholly-owned subsidiary, TrixMotive, Inc. (“TrixMotive”), has filed protection under Chapter 7 of the United States Bankruptcy Court in the Central District of California. TrixMotive ceased operating as of its bankruptcy filing.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Presentation of Interim Information: The financial information at June 30, 2009 and for the three months ended June 30, 2009 and 2008 are unaudited but includes all adjustments (consisting only of normal recurring adjustments) that the Company considers necessary for a fair presentation of the financial information set forth herein, in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the instructions to Form 10-Q. Accordingly, such information does not include all of the information and footnotes required by U.S. GAAP for annual financial statements. For further information refer to the Financial Statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008.

The consolidated balance sheet as of December 31, 2008 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.

The results for the three and six months ended June 30, 2009 may not be indicative of results for the year ending December 31, 2009 or any future periods.

Principle of Consolidation and Presentation: The accompanying consolidated financial statements include the accounts of MotivNation, Inc. and its subsidiaries after elimination of all intercompany accounts and transactions. As the Company ceased the customizing motorcycles business in fourth quarter of 2007 and its wholly-owned subsidiary, TirxMotive, ceased operations effective as of the bankruptcy filing date, the accompanying financial statements have been retroactively adjusted to reflect the impact of the discontinuation of both businesses. The results of the customizing automobiles and motorcycles segments have been classified as discontinued operations in the accompanying consolidated statements of operations for the three and six months ended June 30, 2009 and 2008.

Use of Estimates: The preparation of the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States (U.S. GAAP) requires management to make certain estimates and assumptions that directly affect the results of reported assets, liabilities, revenue, and expenses. Actual results may differ from these estimates.

MOTIVNATION, INC.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Convertible Notes Payable and Derivative Liabilities: The Company accounts for convertible notes payable and warrants in accordance with Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities." This standard requires the conversion feature of convertible debt be separated from the host contract and presented as a derivative instrument if certain conditions are met. Emerging Issue Task Force (EITF) 00-19, "Accounting for Derivative Financial Instruments Indexed to and Potentially Settled in a Company's Own Stock" and EITF 05-2, "The Meaning of "Conventional Convertible Debt Instrument" in Issue No. 00-19" were also analyzed to determine whether the debt instrument is to be considered a conventional convertible debt instrument and classified in stockholders' equity. The convertible notes payable were evaluated and determined not conventional convertible and, therefore, because of certain terms and provisions including liquidating damages under the associated registration rights agreement the embedded conversion option was bifurcated and has been accounted for as a derivative liability instrument. The stock warrants issued in conjunction with the convertible notes payable were also evaluated and determined to be a derivative instrument and, therefore, classified as a liability on the balance sheet. The accounting guidance also requires that the conversion feature and warrants be recorded at fair value for each reporting period with changes in fair value recorded in the consolidated statements of operations.

A Black-Scholes valuation calculation was applied to both the conversion features and warrants at issuance dates and report dates. The issuance date valuation was used for the effective debt discount that these instruments represent. The debt discount is amortized over the three-year life of the debts using the effective interest method. The reporting date valuations were used to record the fair value of these instruments at the end of the reporting period with any difference from prior period calculations reflected in the consolidated statement of operations.

Net Income (Loss) Per Share: Basic net income per share includes no dilution and is computed by dividing net income available to common stockholders by the weighted average number of common stock outstanding for the period. Diluted net income per share is computed by dividing net income by the weighted average number of common shares and the dilutive potential common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares and excludes dilutive potential common shares outstanding, as their effective is anti-dilutive. Dilutive potential common shares primarily consist of stock warrants, unvested common stocks and shares issuable under convertible debt.

New Accounting Pronouncements: In April 2009, the FASB issued FSP SFAS No. 107-1, “Interim Disclosures about Fair Value of Financial Instruments, which amends SFAS No. 107, Disclosures about Fair Value of Financial Instruments,” and APB Opinion No. 28, Interim Financial Reporting. FSP SFAS No. 107-1 will require disclosures about fair value of financial instruments in financial statements for interim reporting periods and in annual financial statements of publicly-traded companies. This FSP also will require entities to disclose the method(s) and significant assumptions used to estimate the fair value of financial instruments in financial statements on an interim and annual basis and to highlight any changes from prior periods. The effective date for this FSP is interim and annual periods ending after June 15, 2009. The Company is currently assessing the impact of FSP SFAS 107-1.

In April 2009, the FASB issued FSP No. FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments.” The FSP amends the other-than-temporary impairment guidance for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities. The FSP is effective for interim and annual periods ending after June 15, 2009, which is June 30, 2009 for the Company. The FSP is not anticipated to have a material impact on the Company’s consolidated financial statements.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not, or are not believed by management to, have a material impact on the Company’s present or future consolidated financial statements.

MOTIVNATION, INC.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – GOING CONCERN

The Company's consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company incurred losses from continuing operations totaling $2,600,349 for six months ended June 30, 2009 and has an accumulated deficit of $13,794,380 and a working capital deficit of $3,956,918 as of that date.

The application of the going concern concept is dependent upon the Company’s ability to receive continued financial support from its creditors, stockholders and external investors. In July 2008, the Company’s principal operating subsidiary has ceased its operations and filed for Chapter 7 bankruptcy. Subsequently, the Company will continue to build its prototype bike and seeks for new business opportunities. The ability of the Company to continue as a going concern is dependent its ability to meet its financing arrangement and the success of its future operations. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 4 – BALANCE SHEET DETAILS

The following tables provide details of selected balance sheet items:

	June 30,	December 31,
	2009	2008
	(Unaudited)	(Audited)
Accrued Liabilities
Accrued payroll and related taxes	$ 559,528	$ 484,528
Accrued interest	212,650	239,788
Others	20,370	26,346
Total accrued liabilities	$ 792,548	$ 750,662

NOTE 5 – CONVERTIBLE NOTES PAYABLE AND DERIVATIVE LIABILITIES

Sale of $17,500 Convertible Debentures

On September 26, 2008, the Company sold in a private transaction an aggregate of $17,500 of convertible debentures (the “2008 Second Debentures”). The principal amount of the 2008 Second Debentures outstanding accrues interest at the rate of 8% per annum payable quarterly. The 2008 Second Debentures are convertible into shares of the Company’s common stock at 40% of the average of the lowest 3 intra-day trading prices during the 20 trading days immediately prior to the conversion date. The 2008 Second Debentures are repayable, principal and accrued interest, on September 26, 2011. The 2008 Second Debentures contain a provision that prohibits the holder from converting the debenture if such conversion would result in the holder owning more than 4.99% of the Company’s outstanding common stock at the time of such conversion.

MOTIVNATION, INC.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 – CONVERTIBLE NOTES PAYABLE AND DERIVATIVE LIABILITIES (CONTINUED)

Sale of $100,000 Convertible Debentures

On April 22, 2008, the Company sold in a private transaction an aggregate of $100,000 of convertible debentures (the “2008 First Debentures”). The principal amount of the 2008 First Debentures outstanding accrues interest at the rate of 8% per annum payable quarterly. The 2008 First Debentures are convertible into shares of the Company’s common stock at 40% of the average of the lowest 3 intra-day trading prices during the 20 trading days immediately prior to the conversion date. The 2008 First Debentures are repayable, principal and accrued interest, on April 22, 2011. The 2008 First Debentures contain a provision that prohibits the holder from converting the debenture if such conversion would result in the holder owning more than 4.99% of the Company’s outstanding common stock at the time of such conversion.

In addition, purchasers of the 2008 First Debentures received warrants exercisable to purchase an aggregate of 10,000,000 shares of the Company’s common stock at an exercise price of $0.002 per share (the "2008 First Debenture Warrants"). The 2008 First Debenture Warrants shall have a seven year term from date of issuance and have a cashless exercise feature.

The Company will file a Registration Statement covering the resale of the common shares underlying the notes and warrant within 30 days of the closing date. The Company shall respond to all SEC comments within 10 calendar days of receipt of said comments and will use its best efforts to cause the Registration Statement to become effective within 120 days of the closing date. Through to date, the Company did not file the Registration Statement with the SEC.

Sale of $175,000 Convertible Debentures

On November 16, 2007, the Company sold in a private transaction an aggregate of $175,000 of convertible debentures (the “2007 Debentures”). The principal amount of the 2007 Debentures outstanding accrues interest at the rate of 8% per annum payable quarterly. The 2007 Debentures are convertible into shares of the Company’s common stock at 50% of the average of the lowest 3 intra-day trading prices during the 20 trading days immediately prior to the conversion date. The 2007 Debentures are repayable, principal and accrued interest, on November 16, 2010. The 2007 Debentures contain a provision that prohibits the holder from converting the debenture if such conversion would result in the holder owning more than 4.99% of the Company’s outstanding common stock at the time of such conversion.

In addition, purchasers of the 2007 Debentures received warrants exercisable to purchase an aggregate of 15,000,000 shares of the Company’s common stock at an exercise price of $0.002 per share (the "2007 Debenture Warrants"). The 2007 Debenture Warrants shall have a seven year term from date of issuance and have a cashless exercise feature.

MOTIVNATION, INC.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 – CONVERTIBLE NOTES PAYABLE AND DERIVATIVE LIABILITIES (CONTINUED)

Sale of $2,000,000 Convertible Debentures

On January 30, 2006, the Company completed the sale of $2 million aggregate principal amount of 8% callable secured convertible notes (the “2005 Debentures”) due in 2009, and issued stock warrants purchasing up to 2.5 million shares of the Company’s common stock (the “2005 Debenture Warrants”). Proceeds from the notes amounted to $1,903,500 after issuance costs, of which the first traunch of $300,000 (less issuance costs of $55,000 and $20,000 for prepaid officers’ life insurance) was received on November 30, 2005, the second traunch of $500,000 (less issuance costs of $6,000) was received on January 5, 2006, and the third and final traunch of $1,200,000 (less issuance costs of $15,500) was received on January 30, 2006. During the first six months of 2009, the Company has converted $4,364 principal amount into 41,131,200 shares of the Company’s common stock at the request of the note holders. During the six months of 2008, the Company has converted $8,820 principal amount into 14,064,000 shares of the Company’s common stock.

The Company also granted warrants to purchase 2,500,000 shares of common stock in connection with the financing. The warrants are exercisable at $1.50 per share for a period of five years, and were fully vested.

The Company filed a registration statement with the SEC on December 15, 2005 and amended the registration statement on December 30, 2005, with respect to the sale of the notes and common stock issuable upon the conversion of the notes. The issuance costs incurred in connection with the convertible notes are deferred and being amortized to interest expense over the life of each debenture traunch.

During the six months ended June 30, 2009 and 2008, accrued interest of $223,763 and $288,174, respectively, was converted into principal. The converted principal carries interest at 2% per annum and matures on March 11, 2012 and January 31, 2011, respectively.

As of June 30, 2009, the Company was in default of the $2,000,000 debt; accordingly, the Company added penalties of $570,491 to the principal. Interest is being accrued at the default rate of 15% per annum.

The Company is accounting for the conversion option in the debentures and the associated warrants as derivative liabilities in accordance with SFAS 133, “Accounting for Derivative Instruments and Hedging Activities,” EITF 00-19, “Accounting for Derivative Financial Instruments Indexed to and Potentially Settled in a Company’s Own Stock” and EITF No. 05-2, “The Meaning of “Conventional Convertible Debt Instrument” in Issue No. 00-19.” The Company attributed beneficial conversion features to the convertible debt using the Black-Scholes Option Pricing Model. The fair value of the conversion feature has been included as a discount to debt in the accompanying balance sheet up to the proceeds received from each traunch, with any excess charged to operations. The discount is being amortized over the life of each debenture traunch using the interest method.

The following tables describe the valuation of the conversion feature of each traunch of the convertible debenture, using the Black Scholes pricing model:

	11/30/05 Traunch	1/4/06 Traunch	1/30/06 Traunch	11/16/07 Traunch	1/31/08 Interest	4/22/08 Traunch
Approximate risk free rate	4.41%	4.28%	4.47%	3.30%	2.27%	2.43%
Average expected life	3 years	3 years	3 years	3 years	3 years	3 years
Dividend yield	0%	0%	0%	0%	0%	0%
Volatility	356.33%	348.92%	342.77%	286.90%	289.55%	325.91%
Estimated fair value of conversion feature	$599,200	$998,346	$2,395,289	$346,997	$571,604	$249,283
Charged to debt discount	$300,000	$500,000	$1,200,000	$175,000	$288,174	$100,000
Charged to expenses	$299,200	$498,346	$1,195,289	$171,997	$283,434	$149,283

MOTIVNATION, INC.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 – CONVERTIBLE NOTES PAYABLE AND DERIVATIVE LIABILITIES (CONTINUED)

	9/26/08 Traunch	12/1/08 Default Penalty	1/5/09 Default Penalty	1/31/09 Default Penalty	3/11/09 Interest
Approximate risk free rate	2.38%	0..81%	0.4%	0.51%	1.16%
Average expected life	3 years	1 year	1 year	1 year	3 years
Dividend yield	0%	0%	0%	0%	0%
Volatility	355.73%	411.17%	439.15%	490.22%	520.73%
Estimated fair value of conversion feature	$43,695	$121,197	$294,106	$712,826	$559,405
Charged to debt discount	$17,500	$0	$0	$0	$0
Charged to expenses	$26,195	$121,197	$294,106	$712,826	$559,405

The Company recorded the fair value of the conversion feature as a discount to the convertible debt in the accompanying balance sheet up to the proceeds received from each traunch, with any excess charged to expense. Amortization expense related to the conversion feature discount for the three and six months ended June 30, 2009 was $24,547 and $129,997, respectively. Amortization expense related to the conversion feature discount for the three and six months ended June 30, 2008 was $257,893 and $464,192, respectively. Remaining unamortized discount as of June 30, 2009 was $497,813.

The warrants issued in lieu of the financing were recorded as derivative liabilities and valued using the Black-Scholes Option Pricing Model with the following weighted-average assumptions used.

	11/30/05 Traunch	1/4/06 Traunch	1/30/06 Traunch	11/16/07 Traunch	4/22/08 Traunch
Approximate risk free rate	4.42%	4.28%	4.46%	3.88%	3.29%
Average expected life	5 years	5 years	5 years	7 years	7 years
Dividend yield	0%	0%	0%	0%	0%
Volatility	356.33%	348.92%	342.77%	286.90%	325.91%
Number of warrants granted	375,000	625,000	1,500,000	15,000,000	10,000,000
Estimated fair value of total warrants granted	$299,975	$493,692	$1,184,815	$59,995	$15,000

In accordance with the EITF 00-19, the conversion feature of each convertible debenture and the stock warrants issued in conjunction with convertible debentures have been included as long-term liabilities and were originally valued at fair value at the date of issuance. As a liability, the convertible features and the stock warrants are revalued each period until and unless the debt is converted. As of June 30, 2009 and December 31, 2008, the fair values of the conversion feature and the stock warrants aggregated to $6,907,363 and $5,245,580, respectively. The Company recorded a loss of $104,136 and $292,691 for the six months ended June 30, 2009 and 2008, respectively. This amount is recorded as “Change in Derivative Liabilities” a component of other expense in the accompanying consolidated statement of operations. If the debt is converted prior to maturity, the carrying value will be transferred to equity.

NOTE 6 – NOTE PAYABLE TO OTHERS

As of June 30, 2009, the Company has a note payable of $8,000 to a non-related party. There are no repayment terms or interest provisions on this loan.

MOTIVNATION, INC.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 – NET LOSS PER SHARE

The following table sets forth the computation of basic and diluted net loss per share for the periods:

	For Three months ended		For six months ended
	June 30,		June 30,
	2009	2008	2009	2008
Numerator:
Net loss from continuing operations	$ (729,868)	$ (893,779)	$ (2,600,349)	$(1,444,750)
Net income (loss) from discontinued operations	$ (1,384)	$ 31,009	$ (2,543)	$ (16,622)
Net loss	$ (731,252)	$ (862,770)	$ (2,602,892)	$(1,461,372)
Denominator:
Weighted average number of shares outstanding	141,209,124	26,288,158	134,433,507	22,235,491
Net loss per share from continuing operations-basic and diluted	$ (0.01)	$ (0.03)	$ (0.02)	$ (0.06)
Net loss per share from discontinued operations-basic and diluted	$ (0.00)	$ 0.00	$ (0.00)	$ (0.00)
Net loss per share-basic and diluted	$ (0.01)	$ (0.03)	$ (0.02)	$ (0.07)

As of June 30, 2009, the Company has 27.5 million out-of money stock warrants excluded from diluted net loss per share computations as their exercise prices are greater than the average quarterly market price. In accordance with SFAS No. 128, “Earnings Per Share”, the Company has excluded from the calculation of diluted net loss per share approximately 6,002 and 6,062 shares for the three and six months ended June 30, 2009, respectively, relating to its 10% related party convertible debt that are anti-dilutive. As of June 30, 2009, depending on the stock price on the conversion date, up to maximum of 5,947,652,778 shares, subject to certain adjustments, may be issued upon conversion of the 8% Callable Secured Convertible Notes and 10% related party debt. For additional information, see “Note5 – Convertible Notes Payable and Derivative Liabilities” and “Note 11-Related Party Transactions.”

As of June 30, 2008, the Company has 27.5 million out-of money stock warrants excluded from diluted net loss per share computations as their exercise prices are greater than the average quarterly market price. In accordance with SFAS No. 128, “Earnings Per Share”, the Company has excluded from the calculation of diluted net loss per share approximately 4,282 and 4,244 shares for the three and six months ended June 30, 2008, respectively, relating to its 10% related party convertible debt that are anti-dilutive. As of June 30, 2008, depending on the stock price on the conversion date, up to maximum of 578,544,732 shares, subject to certain adjustments, may be issued upon conversion of the 8% Callable Secured Convertible Notes. For additional information, see “Note5 – Convertible Notes Payable and Derivative Liabilities.”

NOTE 8 – DISCONTINUED OPERATIONS

In July 2008, the Company’s principal operating subsidiary, TrixMotive, Inc., has ceased operations and filed for Chapter 7 bankruptcy. In addition, the Company has discontinued the customizing motorcycles business in the fourth quarter of 2007.

Pursuant to SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the accompanying consolidated financial statements have been retroactively adjusted to reflect the impact of the discontinuation of TrixMotive and the customizing motorcycles business. The net operating results, net assets and liabilities, and net cash flows of both businesses have been reported as “Discontinued Operations.”

MOTIVNATION, INC.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 – DISCONTINUED OPERATIONS (CONTINUED)

Following is summarized financial information for the discontinued operations:

	For three months ended June 30,			For Six Months ended June 30,
	2009	2008		2009	2008
Revenues:
Customized Automobile	$ -	$ 670,200		$ -	$ 1,278,470
Customized Motorcycle	$ -	$ -		$ -	$ -
Total Revenues:	$ -	$ 670,200		$ -	$ 1,278,470

Net operating income(loss) from discontinued operations:
Customized Automobile	$ (45)	$ 34,759		$ (99)	$ (9,122)
Customized Motorcycle	$ (1,339)	$ (3,750)		$ (2,444)	$ (7,500)
Net operating income (loss) from discontinued operations	$ (1,384)	$ 31,009		$ (2,543)	$ (16,622)

Net Income (Loss) from Discontinued Operations	$ (1,384)	$ 31,009	#	$ (2,543)	$ (16,622)
(Net of tax of $0 for 2009 and 2008)

Summarized cash flow information for the discontinued operations is as follows:

	June 30, 2009	December 31, 2008
NET LIABILITIES OF DISCONTINUED OPERATIONS:
Current Assets
Cash	$ (24)	$ (24)
Inventory	25,422	25,422
Net other assets	1,650	1,650
Current liabilities
Accounts payable	(22,055)	(22,055)
Accrued liabilities	(58,691)	(56,247)
Other liabilities	(980)	(980)
Net assets (liabilities) of discontinued operations	$ (54,678)	$ (52,234)

	June 30, 2009	December 31, 2008
NET ASSETS (LIABILITIES) IN LIQUIDATION:
Current Assets
Cash in Trustee	$ 70,457	$ 70,457
Net other assets	39	39
Current liabilities
Accounts payable	(134,218)	(134,869)
Accrued liabilities	(264,670)	(264,670)
Debt (a)	(94,695)	(94,695)
Net assets (liabilities) in liquidation	$ (423,087)	$ (423,738)

(a) Net of intercompany payable to parent of $1,424,957 and $1,424,207 as of June 30, 2009 and
December 31, 2008, respectively.

MOTIVNATION, INC.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 – DISCONTINUED OPERATIONS (CONTINUED)

	For six months ended June 30,
	2009	2008
Net cash used in operating activities of discontinued operations	$ (750)	$ (26,441)
Net cash used by investing activities of discontinued operations	-	-
Net cash used by financing activities of discontinued operations	-	(22,280)

NET CASH USED IN DISCONTINUED OPERATIONS	$ (750)	$ (48,721)

NOTE 9 – GUARANTEES AND PRODUCT WARRANTIES

The Company from time to time enters into certain types of contracts that contingently require the Company to indemnify parties against third party claims. These contracts primarily relate to: (i) divestiture agreements, under which the Company may provide customary indemnifications to purchasers of the Company’s businesses or assets; (ii) certain real estate leases, under which the Company may be required to indemnify property owners for environmental and other liabilities, and other claims arising from the Company’s use of the applicable premises; and (iii) certain agreements with the Company's officers, directors and employees, under which the Company may be required to indemnify such persons for liabilities arising out of their employment relationship.

The terms of such obligations vary. Generally, a maximum obligation is not explicitly stated. Because the obligated amounts of these types of agreements often are not explicitly stated, the overall maximum amount of the obligations cannot be reasonably estimated. Historically, the Company has not been obligated to make significant payments for these obligations, and no liabilities have been recorded for these obligations on its balance sheet as of June 30, 2009.

NOTE 10 – LEGAL PROCEEDINGS

A former employee of Moonlight Industries filed a workers compensation claim against the Company. The former employee is alleging that he was injured during the course of his employment with Moonlight Industries. The damages claimed by the former employee do not appear to be covered by insurance. Management is responding to the case vigorously defending it as they believe the claim is frivolous and potentially fraudulent. In the opinion of the Company’s legal counsel, the likelihood of an unfavourable outcome is low.

Damon’s historically leased four (4) units space in city of Brea, California under four separate non-cancelable operating lease agreements, which expires through November 30, 2007. Damon’s currently does not occupy the spaces. In July, the landlord filed claims against Damon’s for the past due rent and charges of all units, aggregate of $19,657, and the additional amounts due pursuant to the remaining terms of the lease agreements. The obligations under the remaining terms of the lease agreements are estimated at a total of $89,086. Subsequently, Damon’s and the landlord entered into a Surrender Agreement for one unit, providing that Damon’s agreed to forfeit a security deposit of $1,568 and to pay a sum of $3,822, representing the unpaid charges and rent through the date of agreement. In return, the landlord agreed to discharge and release Damon’s from all obligations under the lease agreement of that unit.

No provision for any contingent liabilities has been made in the accompanying consolidated financial statements since management cannot predict the outcome of the claims or estimate the amount of any loss that may result. In addition, the Company has received an outside legal opinion from an attorney that states the outstanding liability is not the Company’s as the original lease was signed by the previous owners of Damon’s. However, the Company will continue to accrue the past due rent of $19,657 in the accompanying financial statements until this matter is resolved.

MOTIVNATION, INC.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 – LEGAL PROCEEDINGS (CONTINUED)

On December 7, 2005, a customer of TrixMotive filed a lawsuit in the Superior Court of Santa Clara County of California against TrixMotive claiming for breach of contract and warranty, intentional and negligence misrepresentation for a customized vehicle. The plaintiff seeks $98,827 in compensatory damages and other unspecified damages plus interest, attorneys’ fees and costs. The arbitrator after a hearing held on September 22, 2006 awarded that the plaintiff shall recover from the Company the price of the refrigerator and microwave which were ordered and paid for by the plaintiff but not installed in the vehicle, and that all other claims of plaintiff are denied as to the Company. The Plaintiff rejected the arbitration award on October 19, 2006. The Company entered into a settlement agreement on January 28, 2008 to settle the claim in the amount of $2,000. The Company did not accrue the settlement amount which was considered immaterial.

On July 3, 2007, a claim was filed in the Superior Court of Los Angeles County of California against TrixMotive, Inc. to seek for a payment of $21,888 due to the California State Compensation Insurance Fund. The Company agreed to pay $750 per month commencing January 10, 2008 until the amount as paid in full. The liability has been accrued already in prior year.

On January 24, 2008, a customer of TrixMotive filed a lawsuit in the Superior Court of Middlesex County of New Jersey against TrixMotive claiming for breach of contract and warranty, intentional and negligence misrepresentation for a customized vehicle. The claim is in early stage and the outcome of this matter is not determinable.

While the outcome of these matters is not determinable, the Company does not expect that the ultimate costs to resolve these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows.

NOTE 11 – RELATED PARTY TRANSACTIONS

The Company has short-term notes payable to an officer and a related party, aggregate of $195,233 plus related accrued interest of $67,811 as of June 30, 2009. The notes carry interest at range of 8% to 10% per annum and are unsecured. On July 2, 2008, the Company, the officer and the related party agreed to extend the note to December 31, 2008 and to increase the principal by $20,000 as a cost of extension. A 10% penalty will be added annually until the note is paid in full. In addition, the Company granted a conversion right to the officer allowing him to convert all or any outstanding balance into the Company’s common stocks at 75% of the average of the lowest three closing prices during the ten days prior to the date the conversion notice. As a result, the Company recorded a conversion expense of $115,399 using the Black-Scholes valuation model:

Approximate risk free rate	1.88%
Average expected life	5 months
Dividend yield	0%
Volatility	249.98%
Estimated fair value of conversion feature	$115,399

.NOTE 12 – SEGMENT INFORMATION

The Company previously reported two principal operating segments: (i) custom motorcycle, and (ii) custom automotive. The custom motorcycle segment provides a full range of services that cater to motorcycle enthusiast, including the sale, manufacture and installation of custom-built parts and accessories, the restoration, repair and servicing and the custom painting work. The custom automotive segment specializes in creating customized limousines to suit the tastes and needs of each individual customer. In fourth quarter of 2007, the Company discontinued the customizing motorcycles business. In July 2008, TrixMotive filed for Chapter 7 Bankruptcy. As a result, both segments are reclassified to discontinued operations and the Company has no reportable segment.

MOTIVNATION, INC.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

ITEM 2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION

Disclaimer Regarding Forward Looking Statements

Certain statements contained in the following description of the business of MotivNation which are not statements of historical fact are what are known as "forward-looking statements," which are basically statements about the future, and which for that reason involve risk and uncertainty, since no one can accurately predict the future. Words such as "plans," "intends," "seeks," "anticipates," "expects," "goal, "hopes" and "objective" often identify such forward-looking statements, but are not the only indication that a statement is a forward-looking statement. Such forward-looking statements include statements of the plans and objectives of the Company’s management with respect to its present and future operations, and statements which express or imply that such present and future operations will or may produce revenues, income or profits. Numerous factors and future events could cause the Company to change such plans and objectives, or to fail to successfully implement such plans or achieve such objectives, or to cause such present and future operations to fail to produce revenues, income or profits.

Plan of Operation

General

MotivNation, Inc. provided a range of services that cater to the custom automotive enthusiast. The company’s primary operation and wholly-owned subsidiaryTrixMotive Inc. filed for bankruptcy in the third quarter of 2008. The company is looking for other avenues to continue business, and is currently working on finishing its prototype bike to establish business interest. In addition the company is looking at licensing the use of Damon’s name.

Results of Operations

Three Months Ended June 30, 2009 compared to the Three Months Ended June 30, 2008

Revenues and Loss from Continuing and Discontinued Operations

Our operating expenses, other expenses, and net loss for the three months ended June 30, 2009, as compared to the three months ended June 30, 2008 are as follows:

	3 Months Ended June 30, 2009	3 Months Ended June 30, 2008
	3 Months Ended June 30, 2009	3 Months Ended June 30, 2008
Operating Expenses:
Selling, General and Administrative Expenses	$ 45,969	$ 74,156

Total Operating Expenses	45,969	74,156

Total Other Expenses	683,899	819,623


Provision for income taxes	-	-


Net Income or (Loss) from Discontinued Operations	(1,384)	31,009

Net Loss	731,252	862,770

MOTIVNATION, INC.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Operating expenses

Our selling, general and administrative expense consists primarily of corporate expenditures related to maintaining a public company, and any related spending and costs. Major expenses decreased by 40.1% for the same period in 2009 versus 2008, primarily as a result of decreases in accounting and legal expense of 81.3% and 100%, respectively. Also attributing largely to the decrease was a decrease in stock related expense of $1,383, or 63.6% during the three months ending June 30, 2009 compared to same prior period. Additional decreases were in insurance, shipping/delivery, and utilities fees of 100%, 80.1% and 2.6%, respectively for the same time period. Also contributing was a decrease in consulting expense of 100% for the same period in 2009 versus 2008. An offset was an increase in rent of $409 or 31.5%. There was no change in salary & wages of $37,500 for the same period in 2009 compared to the same prior period. Total Operating expenses were $46,602 and $59,067, respectively, for the three months ended June 30, 2009 and 2008.

The Major expenses incurred during the three months ended June 30, 2009 and 2008 were:

		3 Months Ended June 30, 2009		3 Months Ended June 30, 2008	Percentage Change Increase (Decrease)

Major Expenses:
Rent	$	1,705	$	1,296	31.5	%
Salary & Wages		37,500		37,500	0.0	%
Insurance		0		848	(100.0)	%
Consulting		0		4,000	(100.0)	%
Accounting Fees		3,000		16,000	(81.3)	%
Shipping and Delivery		99		499	(80.1)	%
Utilities		370		380	(2.6)	%
Legal		0		9,852	(100.0)	%
Stock Related		790		2,173	(63.6)	%

Total Major Expenses		43,465		72,549	(40.1)	%

Total Operating Expenses		45,969		74,156	(38.0)	%

Other Income and Expenses and Net Loss

Our other income and expenses and net loss for the three months ended June 30, 2009 and 2008 are as follows:

		3 Months Ended June 30, 2009	3 Months Ended June 30, 2008	Percentage Change Increase (Decrease)
Other income (expenses)

Interest and other income		0	1	(100.0)	%
Change in derivative liabilities		4,891	(61,106)	(108.0)	%
Interest and other expenses		(104,838)	(46,537)	125.3	%
Financing costs		(583,952)	(711,981)	(18.0)	%
Total other income (expenses)		(683,899)	(819,623)	(16.6)	%

Net Loss from Continuing Operations	$	731,252	862,770	(15.2)	%

MOTIVNATION, INC.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

During the three months ended June 30, 2009, our total other expenses decreased by 15.2% compared to the three months ended June 30, 2008. This was primarily due to decreases in financing costs of approximately 18.0%. This decrease was slightly offset by a decrease in change in derivative liabilities, and an increase in interest/other expenses of 108.0%, and 125.3%, respectively, for the 2nd quarter of 2009 compared to the same period in 2008. Net loss decreased 15.2% primarily due to the 16.6% decrease in total other expenses.

Six Months Ended June 30, 2009 compared to the Six Months Ended June 30, 2008

Revenues and Loss from Continuing and Discontinued Operations

Our revenue, cost of revenue, selling, general and administrative expenses, and operating loss for the six months ended June 30, 2009, as compared to the six months ended June 30, 2008 are as follows:

	6 Months Ended June 30, 2009	6 Months Ended June 30, 2008
	6 Months Ended June 30, 2009	6 Months Ended June 30, 2008
Operating Expenses:
Selling, General and Administrative Expenses	$ 92,571	$ 133,223

Total Operating Expenses	92,571	133,223

Total Other Expenses	2,505,378	1,309,127


Provision for income taxes	2,400	2,400


Net Income or (Loss) from Discontinued Operations	(2,543)	(16,622)

Net Loss	2,602,892	1,461,372

Operating Expenses

Our selling, general and administrative expense consists primarily of corporate expenditures related to maintaining a public company, and any related spending and costs. The company’s major expenses decreased by 34.6% for the second quarter of 2009 versus 2008. This primarily occurred from the decrease in accounting expense of 81.3%. In addition decreases in salary & wages and legal expense of approximately 14.3%, and 99.4% respectively. Additional contributions to the decrease were in insurance, consulting, and rent expense of 100%, 100%, and 12.8% respectively. There were also decreases in stock related, shipping/delivery, and utilities expense of 35.2%, 81.6%, and 44.1% for the second quarter of 2009 compared to 2008. Total expenses were $92,571 for the second quarter of 2009, a 30.5% decrease compared to the second quarter of 2008. The major expenses incurred during the six months ended June 30, 2009 and 2008 were:

MOTIVNATION, INC.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

		6 Months Ended June 30, 2009		6 Months Ended June 30, 2008	Percentage Change Increase (Decrease)

Major Expenses:
Rent	$	3,410	$	3,913	(12.8)	%
Salary & Wages		75,000		87,500	(14.3)	%
Insurance		0		1,239	(100.0)	%
Accounting Fees		3,000		16,000	(81.3)	%
Consulting		0		4,000	(100.0)	%
Shipping and Delivery		154		838	(81.6)	%
Legal		65		11,238	(99.4)	%
Stock Related		2,852		4,404	(35.2)	%
Utilities		529		947	(44.1)	%

Total Major Expenses		85,011		130,079	(34.6)	%

Total Expenses		92,571		133,223	(30.5)	%

Other Income and Expenses and Net Loss

Our other income and expenses and net loss for the six months ended June 30, 2009 and 2008 are as follows:

		6 Months Ended June 30, 2009	6 Months Ended June 30, 2008	Percentage Change Increase (Decrease)
Other income (expenses)

Interest and other income		1	109	(99.1)	%
Change in derivative liabilities		(104,136)	(292,691)	(64.4)	%
Interest and other expenses		(704,910)	(91,891)	667.1	%
Financing costs		(1,696,333)	(924,654)	83.5	%
Total other income (expenses)		(2,505,378)	(1,309,127)	91.4	%

Net Loss from Continuing Operations	$	2,600,349	1,444,750	80.0	%

During the six months ended June 30, 2009, our total other expenses increased by 91.4% compared to the six months ended June 30, 2008. This was primarily due to increases in financing costs and interest/other expenses of approximately 83.5% and 667.1% respectively. In addition change in derivative liabilities changed by 685.1% for the second quarter of 2009 compared to the same period in 2008. This was slightly offset by a decrease in change in derivative liabilities, and interest/other income of 64.4, and 99.1% for the six months ended June 30, 2009, compared to the six months ended June 30, 2008. Net loss increased 80.0% primarily due to the 91.4% increase in total other expenses.

Liquidity and Capital Resources

Our cash, accounts receivable, prepaid expenses, total current assets, total assets, total current liabilities, and total liabilities as of June 30, 2009, as compared to December 31, 2008 were as follows:

MOTIVNATION, INC.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

		June 30,		December 31,
		2009		2008

Cash	$	4,074	$	15,155
Cash in Escrow		-		17,500
Net Assets of TrixMotive held for liquidation		70,496		70,496
Total current assets		74,570		103,151
Debt issuance cost, net		264		264
Total assets		74,834		103,415
Total current liabilities		4,031,488		3,398,542
Total liabilities		11,245,110		8,683,853

Cash Requirements

Our cash obligations are anticipated to increase substantially over the next 12 months. The cash would be utilized for operational expenses and general working capital as a result of continued sales growth, continued legal and professional fees. Historically, we have financed our operations through cash generated from the sale of equity securities and debt financing, as well as increased in timing of payments for accounts payable. At June 30, 2009, we had a working deficit of $3,956,918.

Operating activities:

Net cash used in operating activities from continuing operations was $35,831 for the six months ended June 30, 2009. This resulted primarily from a net loss of $2,602,892. An offset to this was the addition of net loss from discontinued operations, net of tax of $2,543. In addition the increase in accounts payable and accrued liabilities of $255,884 contributed. An additional offset was an adjustment in non-cash interest expense and financing costs of $2,204,498 and a change in derivative liabilities of $104,136.

Investing activities:

Net cash used in investing activities from continuing operations was $17,500 for the six months ended June 30, 2009, and resulted primarily from a decrease in cash in escrow.

Financing activities:

Net cash provided by financing activities from continuing operations was $8,000 for the six months ended June 30, 2009, and resulted primarily from note payable proceeds.

Our liquidity is dependent on our ability to continue to meet our obligations, to obtain additional financing as may be required and to obtain and maintain profitability. Our management continues to look for ways to reduce operating expenses and secure an infusion of capital through either public or private investment in order to maintain our liquidity. During the second quarter of 2009 the company was focused on finishing its prototype bike and seeking new business opportunities.

TrixMotive, Inc. Bankruptcy

On July 18, 2008 MotivNation’s (the “Company”) principal operating subsidiary, TrixMotive, Inc. filed Chapter 7 bankruptcy The Company stated that they bankrupted the subsidiary, which fell victim to the economy, in order to stabilize ongoing operations and protect the parent company from additional expenditures by the subsidiary, thus enabling the Company to stay operational.

MOTIVNATION, INC.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Going Concern

There can be no assurance that we will be successful in executing our plans obtain additional debt or equity financing. There would be substantial doubt as mentioned in our financial footnotes about our ability to continue due to a decrease in our working capital and inability to obtain financing. The company has been dependent on outside institutions for additional funding to keep the operations running. The lack of cash flow has also resulted in increased company liabilities due to the non payment of federal and state payroll taxes. If positive cash flow or continued funding can not be achieved, the company will have to look at other avenues to continue business. This may possibly include an acquisition or merger of another operation/company by the exchange of shares. The company wholly owned subsidiary has filed Chapter 7 Bankruptcy and has ceased its current operations. There can be no assurance the Parent company will be successful in its attempts to complete licensing for the use of Damon’s name and establish any business interest for its custom prototype bike.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses for each period. The following represents a summary of our critical accounting policies, defined as those policies that we believe are: (a) the most important to the portrayal of our financial condition and results of operations, and (b) that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain.

Impairment or Disposal of Long-Lived Assets. The Company reviews long-lived assets for impairment annually, and whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered. At June 30, 2009, the Company had $zero loss on disposal of assets for continued operation for the year to date. However the company’s wholly owned subsidiary TrixMotive, Inc. filed for bankruptcy in July of 2008.

Use of estimates: The preparation of the accompanying financial statements in conformity with accounting principles generally accepted in the United States (U.S. GAAP) requires our management to make certain estimates and assumptions that directly affect the results of reported assets, liabilities, revenue, and expenses. Actual results may differ from these estimates.

Revenue Recognition: The Company’s primary source of revenue comes from the sales of customized automotive conversions. We recognize revenue based on the completed-contact method, whereas customer deposits and partial payments of the conversion are deferred and treated as current liabilities, until the vehicle is completed and recognized as revenue. Other services such as repairs minor alterations are recorded when the service is performed.

Allowance for Doubtful Accounts: We provide an allowance for doubtful accounts that is based upon our review of outstanding receivables, historical collection information, and existing economic conditions.

Cash Equivalents: For purposes of the statements of cash flows, we consider all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents.

Fair Value of Financial Instruments: The carrying amounts of the financial instruments have been estimated by our management to approximate fair value.

Inventories: Inventory includes parts and materials related to the vehicles in the process of being modified and converted. In addition the company will include the cost of the unmodified vehicle chassis if purchased in house. Shipping and handling costs are included in inventory. All inventories are valued at the lower of cost or market.

The Company performs periodic inventory procedures and at times identifies supply inventory that is considered excess inventory or obsolete. The Company writes the obsolete and excessive inventory down to the lower of cost or market and the amount is included in general and administrative expenses for the period.

MOTIVNATION, INC.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Property and Equipment: Property and Equipment are valued at cost. Maintenance and repair costs are charged to expenses as incurred. Depreciation is computed on the straight-line method based on the following estimated useful lives of the assets: 3 to 7 years for office equipment, and 7 years for furniture and fixtures, and 10 years for machinery and tools.

Income Taxes. The Company’s income tax expense involves using the deferred tax assets and liabilities included on the balance sheet. These tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. Management judgment is required in determining the Company’s provision for income taxes, deferred tax assets and liabilities.

Net Loss Per Common Share: The Company accounts for income (loss) per share in accordance with Statement of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS 128"). SFAS No. 128 requires that presentation of basic and diluted earnings per share for entities with complex capital structures. Basic earnings per share includes no dilution and is computed by dividing net income (loss) available to common stockholders by the weighted average number of common stock outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. Diluted net loss per common share does not differ from basic net loss per common share due to the lack of dilutive items in the Company.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable

ITEM 4T. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain a set of disclosure controls and procedures designed to ensure that information required to be disclosed by us in our reports filed under the Securities Exchange Act, is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that this information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Based upon their evaluation as of the end of the period covered by this report, our chief executive officer/ chief financial officer concluded that our disclosure controls and procedures are not effective to ensure that information required to be included in our periodic SEC filings is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms. The company has identified a material weakness as defined in Public Company Accounting Oversight Board Standard No. 2 in our internal control over financial reporting. Management has identified the following two material weaknesses which have caused management to conclude that, as of June 30, 2009, our disclosure controls and procedures were not effective at the reasonable assurance level:

1. We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

2. We do not have adequate reporting procedures in place to assure that we report timely and fully our activities as required and will likely have errors or omissions due to these inadequacies.

MOTIVNATION, INC.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Remediation of Material Weaknesses

We have attempted to remediate the material weaknesses in our disclosure controls and procedures identified above whereby we have hired additional administrative person and will retain an outside professional firm to assist in the separation of duties on an ongoing basis. We will continue to monitor and assess the costs and benefits of additional staffing.

Changes in Internal Control over Financial Reporting

Except as noted above, there were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

ITEM 1. LEGAL PROCEEDINGS

On December 7, 2005, a customer of TrixMotive filed a lawsuit in the Superior Court of Santa Clara County of California against TrixMotive claiming for breach of contract and warranty, intentional and negligence misrepresentation for a customized vehicle. The plaintiff seeks $98,827 in compensatory damages and other unspecified damages plus interest, attorneys’ fees and costs. Subsequent to year end, there was a settlement court appearance by which the Company and the Plaintiff agreed to settle the claim in the amount of $2,000. Final settlement agreement is being processed. No liability was accrued as of December 31, 2006 as the settlement amount was considered insignificant.

MOTIVNATION, INC.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The Company is also currently party to various legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business. While the outcome of these matters cannot be predicted with certainty, management do not believe that the outcome of any of these claims or any of the above mentioned legal matters will have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows.

While the outcome of these matters is not determinable, the Company does not expect that the ultimate costs to resolve these matters will have a material adverse effect on the Company’s financial position, results of operations, or cash flows.

ITEM 1A. RISK FACTORS

Not Applicable.

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

Except as set forth below, there were no unregistered sales of equity securities by the Company during the six month period ended June 30, 2009.

For the first quarter of 2009, 14,993,748 shares of common stock were issued to AJW Offshore, LTD pursuant to Rule 144 for the conversion of $749.69 of convertible debt.

For the first quarter of 2009, 3,304,177 shares of common stock were issued to AJW Partners, LLC pursuant to Rule 144 for the conversion of $165.21 of convertible debt.

For the first quarter of 2009, 9,051,782 shares of common stock were issued to AJW Qualified Partners, LLC pursuant to Rule 144 for the conversion of $452.59 of convertible debt.

For the first quarter of 2009, 416,493 shares of common stock were issued to New Millennium Capital Partners II, LLC pursuant to Rule 144 for the conversion of $20.82 of convertible debt.

For the second quarter of 2009, 3,775,680 shares of common stock were issued to AJW Offshore, LTD pursuant to Rule 144 for the conversion of $1,434.76 of convertible debt.

For the second quarter of 2009, 832,048 shares of common stock were issued to AJW Partners, LLC pursuant to Rule 144 for the conversion of $316.18 of convertible debt.

For the second quarter of 2009, 2,279,392 shares of common stock were issued to AJW Qualified Partners, LLC pursuant to Rule 144 for the conversion of $866.17 of convertible debt.

For the second quarter of 2009, 104,880 shares of common stock were issued to New Millennium Capital Partners II, LLC pursuant to Rule 144 for the conversion of $39.85 of convertible debt.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

MOTIVNATION, INC.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

ITEM 5. OTHER INFORMATION

Entry into Material Definitive Agreements

On January 31, 2008, MotivNation, Inc. reallocated $249,406.69 in interest to a callable secured convertible note to AJW Master Fund, Ltd. The maturity date of the note is January 31, 2011, and is to pay interest at a rate of 2% per annum. The convertible notes mature in three years, at a 2% per annum interest rate and call for quarterly interest payments with the principal due on maturity. If MotivNation defaults on the interest payments, the investors will have the right to convert the notes into fully paid and non-assessable shares of common stock. Conversion price is a fifty percent discount at which the market price will be the average of the three lowest trading days within a twenty day trading period prior to the date the Conversion Notice is sent to the Borrower.

On January 31, 2008, MotivNation, Inc. reallocated $4,359.54 in interest to a callable secured convertible note to New Millennium Capital Partners II, LLC. The maturity date of the note is January 31, 2011, and is to pay interest at a rate of 2% per annum. The convertible notes mature in three years, at a 2% per annum interest rate and call for quarterly interest payments with the principal due on maturity. If MotivNation defaults on the interest payments, the investors will have the right to convert the notes into fully paid and non-assessable shares of common stock. Conversion price is a fifty percent discount at which the market price will be the average of the three lowest trading days within a twenty day trading period prior to the date the Conversion Notice is sent to the Borrower.

On January 31, 2008, MotivNation, Inc. reallocated $34,407.57 in interest to a callable secured convertible note to AJW Partners, LLC. The maturity date of the note is January 31, 2011, and is to pay interest at a rate of 2% per annum. The convertible notes mature in three years, at a 2% per annum interest rate and call for quarterly interest payments with the principal due on maturity. If MotivNation defaults on the interest payments, the investors will have the right to convert the notes into fully paid and non-assessable shares of common stock. Conversion price is a fifty percent discount at which the market price will be the average of the three lowest trading days within a twenty day trading period prior to the date the Conversion Notice is sent to the Borrower.

On June 27, 2008, MotivNation, Inc. issued convertible notes to New Millennium Capital Partners II, LLC in exchange for Gross proceeds of $50,000.

The convertible notes mature in three years, at an 8% per annum interest rate and call for monthly interest payments with the principal due on maturity. If MotivNation defaults on the interest payments, the investors will have the right to convert the notes into fully paid and non-assessable shares of common stock. Conversion price is a forty percent discount at which the market price will be the average of the three lowest trading days within a twenty day trading period prior to the date the Conversion Notice is sent to the Borrower.

On September 26, 2008, MotivNation, Inc. issued convertible notes to New Millennium Capital Partners II, LLC in exchange for Gross proceeds of $17,500.

MOTIVNATION, INC.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

On March 11, 2009, MotivNation, Inc. reallocated $39,833.84 in interest to a callable secured convertible note to AJW Master Fund, Ltd. The maturity date of the note is March 11, 2012, and is to pay interest at a rate of 2% per annum. The convertible notes mature in three years, at a 2% per annum interest rate and call for quarterly interest payments with the principal due on maturity. If MotivNation defaults on the interest payments, the investors will have the right to convert the notes into fully paid and non-assessable shares of common stock. Conversion price is a forty percent discount at which the market price will be the average of the three lowest trading days within a twenty day trading period prior to the date the Conversion Notice is sent to the Borrower.

On March 11, 2009, MotivNation, Inc. reallocated $880.49 in interest to a callable secured convertible note to AJW Partners, LLC. The maturity date of the note is March 11, 2012, and is to pay interest at a rate of 2% per annum. The convertible notes mature in three years, at a 2% per annum interest rate and call for quarterly interest payments with the principal due on maturity. If MotivNation defaults on the interest payments, the investors will have the right to convert the notes into fully paid and non-assessable shares of common stock. Conversion price is a forty percent discount at which the market price will be the average of the three lowest trading days within a twenty day trading period prior to the date the Conversion Notice is sent to the Borrower.

On March 11, 2009, MotivNation, Inc. reallocated $149,942.32 in interest to a callable secured convertible note to AJW Master Fund II, Ltd. The maturity date of the note is March 11, 2012, and is to pay interest at a rate of 2% per annum. The convertible notes mature in three years, at a 2% per annum interest rate and call for quarterly interest payments with the principal due on maturity. If MotivNation defaults on the interest payments, the investors will have the right to convert the notes into fully paid and non-assessable shares of common stock. Conversion price is a forty percent discount at which the market price will be the average of the three lowest trading days within a twenty day trading period prior to the date the Conversion Notice is sent to the Borrower.

On March 11, 2009, MotivNation, Inc. reallocated $9,730.79 in interest to a callable secured convertible note to New Millennium Capital Partners III, LLC. The maturity date of the note is March 11, 2012, and is to pay interest at a rate of 2% per annum. The convertible notes mature in three years, at a 2% per annum interest rate and call for quarterly interest payments with the principal due on maturity. If MotivNation defaults on the interest payments, the investors will have the right to convert the notes into fully paid and non-assessable shares of common stock. Conversion price is a forty percent discount at which the market price will be the average of the three lowest trading days within a twenty day trading period prior to the date the Conversion Notice is sent to the Borrower.

On March 11, 2009, MotivNation, Inc. reallocated $23,375.47 in interest to a callable secured convertible note to AJW Partners II, LLC. The maturity date of the note is March 11, 2012, and is to pay interest at a rate of 2% per annum. The convertible notes mature in three years, at a 2% per annum interest rate and call for quarterly interest payments with the principal due on maturity. If MotivNation defaults on the interest payments, the investors will have the right to convert the notes into fully paid and non-assessable shares of common stock. Conversion price is a forty percent discount at which the market price will be the average of the three lowest trading days within a twenty day trading period prior to the date the Conversion Notice is sent to the Borrower.

MOTIVNATION, INC.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

Exhibit 31.1 – Certification by our President required by Rule 13a-14(a) or Rule 15d-14(a).

Exhibit 31.2 – Certification by our Interim Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).

Exhibit 32.1 – Certification by our President required by Rule 13a-14(b) or Rule 15d-14(b) and section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.

Exhibit 32.2 – Certification by our Interim Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.

(b) Reports on Form 8K.

None in 2nd Quarter.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(b) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: August 19, 2009 MotivNation, Inc.

By: /s/ George R. Lefevre

George R. Lefevre CEO

INDEX TO EXHIBITS
Exhibit 31.1 – Certification required by Rule 13a-14(a) or Rule 15d-14(a). Exhibit 31.2 – Certification required by Rule 13a-14(a) or Rule 15d-14(a). Exhibit 32.1 – Certification Required by Rule 13a-14(b) or Rule 15d-14(b) and section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350. Exhibit 32.1 – Certification Required by Rule 13a-14(b) or Rule 15d-14(b) and section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.	28 29 30 31

MotivNation, Inc. 10-Q