UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


WASHINGTON,
      DC  20549





**FORM
      10-QSB**





(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, 2007





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





For
      the
      transition period from ______ to ______





Commission
      file number 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.)





18101
      Von
      Karman Avenue, Suite 330


Irvine,
      California 92612


(Address
      of Principal Executive Offices)




(888)
      258-6458


(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. 10288970








(1)Yes
      xNo o (2) Yes
      xNo o





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 July 31, 2007.




Common
                Stock, Par Value $0.001
            
            10,288,970Title
                of Class
            
            Number
                of Shares Outstanding as of July 31,
                2007











**TABLE
      OF CONTENTS**





Part
                I
            
            
            1Financial
                Statement Item
            
            
            1Financial
                Statements
            
            
            1Balance
                Sheet
            
            
            1Income
                Statement
            
            
            2Cashflow
                Statement
            
            
            3Financial
                Footnotes
            
            
            4Management
                Discussion & Analysis or Plan of Operations
            
            
            17Controls
                and Procedures
            
            
            29Part
                II
            
            
            30Legal
                Proceedings
            
            
            30Changes
                in Securities
            
            
            30Defaults
                Upon Securities
            
            
            31Submission
                to a Vote
            
            
            31Other
                Information
            
            
            31Exhibits
                and Reports
            
            
            31Signatures
            
            
            32




Exhibits





Index
                to Exhibits
            
            
            33Exhibits




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










**MOTIVNATION,
        INC.**
 
 **CONSOLIATED
        BALANCE SHEET (Unaudited)**
 **JUNE
        30, 2007**




**ASSETS**Current
                AssetsCash
            
            $
            93,651Accounts
                receivable, net
            
            
            50,640Prepaid
                expenses and other current assets
            
            
            51,334Inventory
            
            
            108,490Total
                Current Assets
            
            
            304,115Property
                and equipment, net
            
            
            128,431Goodwill
            
            
            166,621Debt
                issuance cost, net
            
            
            36,555Other
                assets
            
            
            51,513**TOTAL
                ASSETS**
            
            **$**
            **687,235****LIABILITIES
                AND STOCKHOLDERS' DEFICIT**Current
                LiabilitiesAccounts
                payable
            
            $
            188,519Accrued
                liabilities
            
            
            642,823Unearned
                revenue
            
            
            12,272Short-term
                notes payable to related parties
            
            
            269,080Current
                portion of long-term notes payable
            
            
            4,723Current
                portion of capital lease obligations
            
            
            1,795Total
                Current Liabilities
            
            
            1,119,212Long-Term
                DebtLong-term
                notes payable, excluding current portion
            
            
            1,253Convertible
                notes payable, net of unamortized discount of $1,537,898
            
            
            403,124Derivative
                liabilities
            
            
            3,863,223Total
                Long-Term Debt
            
            
            4,267,600Total
                Liabilities
            
            
            5,386,812Stockholders'
                DeficitPreferred
                Stock, $0.001 par value; 100,000,000 shares authorized;none
                issued and outstanding
            
            
            -Common
                Stock, $0.001 par value; 300,000,000 shares authorized;7,466,026
                shares issued and outstanding
            
            
            7,466Paid-in
                Capital
            
            
            2,504,348Accumulated
                deficit
            
            
            (7,211,391
            )Total
                Stockholders' Deficit
            
            
            (4,699,577
            )**TOTAL
                LIABILITIES AND STOCKHOLDERS' DEFICIT**
            
            **$**
            **687,235**




See
        notes
        to interim unaudited consolidated financial statements




1


**MOTIVNATION,
        INC.**
 
 **CONSOLIDATED
        STATEMENTS OF OPERATIONS (Unaudited)**




**For
                three months ended**
            
            
            
            **For
                six months ended****June
                30,**
            
            
            
            
            
            **June
                30,****2007**
            
            2006
            
            
            
            **2007**
            
            2006(Restated)
            
            
            
            
            
            (Restated)**NET
                SALES:**Products
            
            **$**
            **184,673**
            
            $
            223,056
            
            
            
            **$**
            **397,067**
            
            $
            223,644Services
            
            
            **516,960**
            
            
            313,639
            
            
            
            
            **952,878**
            
            
            804,954Total
                net sales
            
            
            **701,633**
            
            
            536,695
            
            **#**
            
            
            **1,349,945**
            
            
            1,028,598**COST
                OF SALES:**Products
            
            
            **235,636**
            
            
            166,798
            
            
            
            
            **441,482**
            
            
            170,980Services
            
            
            **478,101**
            
            
            326,642
            
            
            
            
            **905,583**
            
            
            827,752Total
                costs of sales
            
            
            **713,737**
            
            
            493,440
            
            **#**
            
            
            **1,347,065**
            
            
            998,732**GROSS
                MARGIN**
            
            
            **(12,104**
            **)**
            
            43,255
            
            **#**
            
            
            **2,880**
            
            
            29,866**OPERATING
                EXPENSES:**Selling,
                general and administrative expenses
            
            
            **265,139**
            
            
            364,991
            
            
            
            
            **539,152**
            
            
            677,769Loss
                on disposal of assets
            
            
            **15,054**
            
            
            -
            
            
            
            
            **18,744**
            
            
            2,459Total
                operating expenses
            
            
            **280,193**
            
            
            364,991
            
            **#**
            
            
            **557,896**
            
            
            680,228**OPERATING
                LOSS**
            
            
            **(292,297**
            **)**
            
            (321,736
            )
            
            
            
            **(555,016**
            **)**
            
            (650,362
            )Other
                income (expenses):Interest
                and other income
            
            
            **2,408**
            
            
            18,902
            
            
            
            
            **2,884**
            
            
            19,035Change
                in derivative liabilities
            
            
            **44,224**
            
            
            50,800
            
            
            
            
            **50,027**
            
            
            1,949,913Interest
                and other expense
            
            
            **(43,204**
            **)**
            
            (55,236
            )
            
            
            
            **(87,860**
            **)**
            
            (119,266
            )Financing
                costs
            
            
            **(114,931**
            **)**
            
            (53,942
            )
            
            
            
            **(208,334**
            **)**
            
            (3,463,408
            )Total
                other income (expenses)
            
            
            **(111,503**
            **)**
            
            (39,476
            )
            
            
            
            **(243,283**
            **)**
            
            (1,613,726
            )**NET
                LOSS BEFORE INCOME TAXES**
            
            
            **(403,800**
            **)**
            
            (361,212
            )
            
            
            
            **(798,299**
            **)**
            
            (2,264,088
            )Provision
                for income taxes
            
            
            **-**
            
            
            -
            
            
            
            
            **2,400**
            
            
            2,400**NET
                LOSS**
            
            **$**
            **(403,800**
            **)**
            $
            (361,212
            )
            **#**
            
            **$**
            **(800,699**
            **)**
            $
            (2,266,488
            )**Net
                loss per share-basic and diluted**
            
            **$**
            **(0.06**
            **)**
            $
            (0.08
            )
            
            
            **$**
            **(0.11**
            **)**
            $
            (0.63
            )**Weighted
                Average Number of Common Shares**
            
            
            **7,232,781**
            
            
            4,451,840
            
            
            
            
            **7,139,122**
            
            
            3,578,360




See
        notes
        to interim unaudited consolidated financial statements
  2
  **MOTIVNATION,
        INC.**
 
 **CONSOLIDATED
        STATEMENTS OF CASH FLOWS (Unaudited)**





**For
                the six months ended June 30,**
            
            **2007**
            
            2006**CASH
                FLOW FROM OPERATING ACTIVITIES**
            
            
            
            (Restated)Net
                loss
            
            **$**
            **(800,699**
            **)**
            $
            (2,266,488
            )Adjustments
                to reconcile net loss to net cash used in operating
                activities:Depreciation
            
            
            **18,887**
            
            
            21,045Compensation
                recognized on vested shares
            
            
            **-**
            
            
            101,831Loss
                on disposal of assets
            
            
            **18,744**
            
            
            2,459Change
                in derivative liabilities
            
            
            **(50,027**
            **)**
            
            (1,949,913
            )Noncash
                interest expense and financing costs
            
            
            **208,333**
            
            
            3,463,408(Increase)
                Decrease in:Accounts
                receivable
            
            
            **(3,289**
            **)**
            
            4,562Inventory
            
            
            **345,839**
            
            
            (464,216
            )Prepaid
                and other assets
            
            
            **31,591**
            
            
            (60,538
            )Increase
                (Decrease) in:Accounts
                payable and accrued expenses
            
            
            **190,123**
            
            
            41,326Unearned
                revenue
            
            
            **(23,338**
            **)**
            
            (66,482
            )**Net
                cash flows used in operating activities**
            
            
            **(63,836**
            **)**
            
            (1,173,006
            )**CASH
                FLOW FROM INVESTING ACTIVITIES**Proceeds
                received from sale of property and equipment
            
            
            **-**
            
            
            200Purchase
                of property and equipment
            
            
            **(1,985**
            **)**
            
            -**Net
                cash flows provided by (used in) investing
                activities**
            
            
            **(1,985**
            **)**
            
            200**CASH
                FLOW FROM FINANCING ACTIVITIES**Payments
                on long-term debt
            
            
            **(15,292**
            **)**
            
            (17,073
            )Net
                repayments to related parties
            
            
            **(6,021**
            **)**
            
            (28,804
            )Net
                proceeds from convertible notes payable
            
            
            **-**
            
            
            1,678,500**Net
                cash flows provided by (used in) financing
                activities**
            
            
            **(21,313**
            **)**
            
            1,632,623**NET
                INCREASE (DECREASE) IN CASH**
            
            
            **(87,134**
            **)**
            
            459,817CASH
                AT BEGINNING OF PERIOD
            
            
            **180,785**
            
            
            96,586**CASH
                AT END OF PERIOD**
            
            **$**
            **93,651**
            
            $
            556,403**Supplemental
                Disclosure of Cash Flow Information:**Interest
                Paid
            
            **$**
            **1,915**
            
            $
            2,415Income
                Taxes Paid
            
            **$**
            **-**
            
            $
            2,400**Schedule
                of Noncash Investing and Financing Activities:**Issuance
                of common shares for:Reduction
                of accrued liabilities
            
            **$**
            **-**
            
            $
            150,000Convertible
                notes payable
            
            
            **2,544**
            
            
            43,975**$**
            **2,544**
            
            $
            193,975Issuance
                of warrants in connection with convertible debt
            
            **$**
            **-**
            
            $
            1,678,507Recorded
                a beneficial conversion feature
            
            **$**
            **-**
            
            $
            3,393,635Transfer
                unamortized discount to paid-in capital due to debt
                conversion
            
            **$**
            **1,954**
            
            $
            42,688Transfer
                derivative liabilities to paid-in capital due to debt
                conversion
            
            **$**
            **5,046**
            
            $
            87,777





See
        notes
        to interim unaudited consolidated financial
        statements


3




**MOTIVNATION,
        INC.**
 
 **NOTES
        TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS**
  **NOTE
        1 - NATURE OF BUSINESS**




MotivNation,
      Inc. (“the Company”) provides a full range of services that cater to the custom
      motorcycle and automotive enthusiast, including the sale, manufacture,
      converting, customization, armor protecting, and installation of custom-built
      automotive and motorcycles, auto parts and accessories, as well as restoration,
      repair, and servicing. MotivNation’s business divisions specialize in customized
      motorcycles, specialized automotives conversions such as stretched limousines,
      and is an automotive supplier delivering advanced systems and components to
      the
      motor vehicle industry.




MotivNation
      was incorporated on April 26, 1946, under the laws of the State of Idaho. The
      Company was organized to explore for, acquire and develop mineral properties
      in
      the State of Idaho. The initial and subsequent efforts in the acquisition,
      exploration and development of potentially viable and commercial mineral
      properties were unsuccessful. The Company has since ceased its mining
      business.





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. The Company
      also changed its name from Aberdeen Idaho Mining Company to Aberdeen Mining
      Company.





On
      May
      11, 2004, the Company completed a “reverse acquisition” transaction with Damon’s
      Motorcycle Creations, Inc. (“DAMON”), from which the Company acquired
      substantially all the assets and assumed substantially all the liabilities
      of
      DAMON, in consideration for the issuance of a majority of the Company’s shares
      of common stock. The reverse acquisition was completed pursuant to the Asset
      Purchase Agreement, dated as of May 11, 2004. Concurrent with the closing of
      the
      reverse acquisition, DAMON agreed to transfer 45,000 of the 888,799 shares
      it
      acquired from the Company to a creditor in exchange for the cancellation of
      the
      trade debt and as payment for ongoing consultant services by such creditor.
      For
      accounting purposes, DAMON is the acquirer in the reverse acquisition
      transaction, and consequently the assets and liabilities and the historical
      operations reflected in the financial statements are those of DAMON and are
      recorded at the historical cost basis of DAMON. All shares and per share data
      prior to the acquisition have been restated to reflect the stock issuance as
      a
      recapitalization of DAMON. Since the reverse acquisition transaction is in
      substance a recapitalization of the Company and is not a business combination,
      pro forma information is not presented. Such pro forma statements of operations
      would be substantially identical to the historical statements of operations
      of
      the Company, which are presented in the accompanying consolidated statements
      of
      operations.





Following
      the reverse acquisition, the Company changed its name to MotivNation,
      Inc.





On
      October 11, 2004, the Company and its wholly owned subsidiary, TrixMotive Inc.
      (“TrixMotive”), a Nevada corporation, entered into an Asset Purchase Agreement
      with Moonlight Industries, Inc., a California corporation (“MOONLIGHT”), to
      acquire certain assets and liabilities of MOONLIGHT in exchange for 140,000
      shares of the Company’s common stock. The president of MOONLIGHT became the
      Secretary of TrixMotive. The Company’s president and secretary agreed to return,
      in the aggregate, 140,000 shares of the Company’s common stock held by them to
      the Company prior to the closing of this acquisition. The company will continue
      under the MOONLIGHT brand but will operate under the TrixMotive corporate
      entity.





4


**MOTIVNATION,
        INC.**
 
 **NOTES
        TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL
        STATEMENTS**





**NOTE
      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**





Presentation
      of Interim Information: The
      financial information at June 30, 2007 and for the three and six months ended
      June 30, 2007 and 2006 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-QSB. 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-KSB for the year ended
      December 31, 2006.





The
      results for the three and six months ended June 30, 2007 may not be indicative
      of results for the year ending December 31, 2007 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. Certain prior period balances have been reclassified
      to conform to the current period presentation.





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.





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 issued on November 30, 2005 and in January 2006
      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 June 30, 2007 and 2006 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.




5


**MOTIVNATION,
        INC.**
 
 **NOTES
        TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS**
  Goodwill: Goodwill
        represents the excess of the purchase price in a business combination over
        the
        fair value of net tangible and intangible assets acquired in a business
        combination. Goodwill amounts are not amortized, but rather are tested for
        impairment at least annually. No impairment of goodwill was recorded for
        three
        and six months ended June 30, 2007 and 2006.





**NOTE
      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)**





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.







Stock-Based
      Compensation: The
      Company accounts for stock issued to non-employees in accordance with the
      provisions of SFAS No. 123 and the EITF Issue No. 00-18, *“Accounting
      for Equity Instruments That Are Issued to Other Than Employees for Acquiring,
      or
      in Conjunction with Selling, Goods or Services.”* SFAS No.
      123 states that equity instruments that are issued in exchange for the receipt
      of goods or services should be measured at the fair value of the consideration
      received or the fair value of the equity instruments issued, whichever is more
      reliably measurable. Under the guidance in Issue 00-18, the measurement date
      occurs as of the earlier of (a) the date at which a performance commitment
      is
      reached or (b) absent a performance commitment, the date at which the
      performance necessary to earn the equity instruments is complete (that is,
      the
      vesting date).





New
      Accounting Pronouncements: In
      February 2007, the Financial Accounting Standards Board (“FASB’) issued
      Financial Accounting Standards (“FAS”) No. 159, *The
      Fair Value Option for Financial Assets and Financial Liabilities - Including
      an
      amendment of FASB Statement No. 115* ,
      which
      permits entities to choose to measure many financial instruments and certain
      other items at fair value at specified election dates. A business entity is
      required to report unrealized gains and losses on items for which the fair
      value
      option has been elected in earnings at each subsequent reporting date. This
      statement is expected to expand the use of fair value measurement. FAS No.159
      is
      effective for financial statements issued for fiscal years beginning after
      November 15, 2007, and interim periods within those fiscal years.





In
      September 2006, the FASB issued Statement of Financial Accounting Standards
      (SFAS) No. 157, *"Fair
      Value Measurements."* SFAS No.
      157 defines fair value, establishes a framework for measuring fair value in
      generally accepted accounting principles, and expands disclosures about fair
      value measurements. This statement addresses how to calculate fair value
      measurements required or permitted under other accounting pronouncements.
      Accordingly, this statement does not require any new fair value measurements.
      However, for some entities, the application of the statement will change current
      practice. SFAS No. 157 is effective for the Company beginning January 1, 2008.
      The Company is currently evaluating the impact of this
      standard.





**NOTE
      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)**




Restatement: The June
      30, 2006 consolidated financial statements have been restated to record a
      beneficial conversion feature related to convertible notes payable issued by
      the
      Company in the amount of $3,393,635. The Company has also recorded an amount
      of
      $1,678,507 related to the fair value of warrants issued with the debt, which
      was
      recorded as a liability due to a registration rights agreement. The result
      is to
      record an aggregate discount on debt of $5,072,142 with any excess or $3,372,142
      charged to operations. Also, the fair values of the warrants and conversion
      feature have been recorded at $3,929,547 at June 30, 2006, and an income for
      the
      three and six months ended June 30, 2006 of $50,800 and $1,949,913 has been
      recorded ,
      respectively. In addition, the original accounting treatment for restricted
      stock based compensation was based upon a subjective determination of the most
      appropriate value of the Company’s common shares. Specifically, the Company
      elected to use $0.25 per share for such calculations, representing about a
      75%
      discount of the quoted market price of $1.10 on the date of grant. Upon
      subsequent re-examination of the circumstances, it was determined that the
      use
      of the quoted market price was required by the EITF Issue No. 96-18, *“Accounting
      for Equity Instruments That Are Issued to Other Than Employees for Acquiring,
      or
      in Conjunction with Selling, Goods or Services.”* Consequently, the calculations were revised and additional stock based
      compensation expense was recorded. The weighted average number of common shares
      used to calculate the net loss per share was also revised to exclude all
      unvested shares. As
      a
      result of these corrections, net loss for the three and six months ended June
      30, 2006 has increased by $37,198 to $361,212, and $1,579,089 to $2,266,488,
      respectively, and net loss per share increased to $0.08 from $0.07, and $0.63
      from $0.19, respectively.




6




**MOTIVNATION,
        INC.**
 
 **NOTES
        TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL
        STATEMENTS**




Changes
      to the balance sheet at June 30, 2006 resulting from these corrections are
      as
      follows:





As
                reported
            
            RestatedUnamortized
                debt discount
            
            $
            -
            
            $
            1,876,945Derivative
                liabilities
            
            $
            -
            
            $
            3,929,547Paid-in
                capital
            
            $
            1,432,233
            
            $
            1,859,842Deferred
                compensation and expenses
            
            $
            (270,161
            )
            $
            (322,390
            )Accumulated
                deficit
            
            $
            (2,030,022
            )
            $
            (4,458,004
            )





**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 operating losses totaling $800,699 and $2,266,488 for six months ended
      June 30, 2007 and 2006, respectively. In addition, the Company has an
      accumulated deficit of $7,211,391 and its total liabilities exceed its total
      assets by $4,699,577 as of June 30, 2007. In the near term, the Company expects
      operating costs to continue to exceed funds generated from operations. As a
      result, the Company expects to continue to incur operating losses and may not
      have enough money to grow its business in the future. The Company can give
      no
      assurance that it will achieve profitability or be capable of sustaining
      profitable operations. As a result, operations in the near future are expected
      to continue to use working capital.





Management's
      plans include raising additional working capital through debt or equity
      financing and increasing marketing efforts to increase revenues. On January
      30,
      2006, the Company completed the sale of $2 million aggregate principal amount
      of
      8% callable secured convertible notes due in 2009, and issued stock warrants
      purchasing up to 2.5 million shares of the Company’s common stock pursuant to a
      Security Purchase Agreement dated on November 30, 2005 (See Note 5 - Convertible
      Notes Payable and Derivative Liabilities). 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.





7


**MOTIVNATION,
        INC.**
 
 **NOTES
        TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL
        STATEMENTS**




**NOTE
      4 - BALANCE SHEET DETAILS**





The
      following tables provide details of selected balance sheet items at June 30,
      2007:





Accounts
                Receivable, netBilled
                -Completed
                jobs
            
            $
            30,872Unbilled
                -Completed
                jobs
            
            
            19,768Jobs
                in progress
            
            
            -Subtotal
            
            
            19,768Accounts
                receivable, net
            
            $
            50,640InventoryPainted
                materials
            
            $
            6,537Mechanical
                materials
            
            
            39,077Body
                shop materials
            
            
            11,954Vehicles
            
            
            50,922Work-in
                Process
            
            
            -Total
                inventory
            
            $
            108,490Property
                and Equipment, netAutomobiles
            
            $
            19,026Furniture
                and fixtures
            
            
            7,114Machinery
                and equipment
            
            
            186,781Office
                equipment
            
            
            700213,621Less:
                accumulated depreciation
            
            
            (85,190
            )Property
                and Equipment, net
            
            $
            128,431Accrued
                LiabilitiesAccrued
                payroll and related taxes
            
            $
            284,228Credit
                cards payable
            
            
            13,646Accrued
                vacation
            
            
            17,811Accrued
                interest
            
            
            262,370Others
            
            
            64,768Total
                accrued liabilities
            
            $
            642,823





NOTE
      5 -
      CONVERTIBLE NOTES PAYABLE AND DERIVATIVE LIABILITIES





On
      January 30, 2006, the Company completed the sale of $2 million aggregate
      principal amount of 8% callable secured convertible notes due in 2009, and
      issued stock warrants purchasing up to 2.5 million shares of the Company’s
      common stock. 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
      quarter of 2007, the Company has converted $2,544 principal amount into 420,562
      shares of the Company’s common stock at the request of the note holders. During
      the first six months of 2006, the Company has converted $43,975 principal amount
      into 2,300,000 shares of the Company’s common stock.





8


**MOTIVNATION,
        INC.**
 
 **NOTES
        TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL
        STATEMENTS**




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





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.





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
              TraunchApproximate
                risk free rate
            
            
            4.41
            %
            
            4.28
            %
            
            4.47
            %Average
                expected life
            
            
            3
                years
            
            
            3
                years
            
            
            3
                yearsDividend
                yield
            
            
            0
            %
            
            0
            %
            
            0
            %Volatility
            
            
            356.33
            %
            
            348.92
            %
            
            342.77
            %Estimated
                fair value of conversion feature
            
            $
            599,200
            
            $
            998,346
            
            $
            2,395,289





The
      Company recorded the fair value of the conversion feature, aggregate of
      $3,992,835, as a discount to the convertible debt in the accompanying balance
      sheet up to the proceeds received from each traunch, with any excess or
      $1,992,835 charged to expense. Amortization expense related to the conversion
      feature discount for the six months ended June 30, 2007 and 2006 was $195,583
      and $78,349, respectively. Remaining unamortized discount as of June 30, 2007
      was $1,537,898.





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 warrants have been valued
      at $1,978,482 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
              TraunchApproximate
                risk free rate
            
            
            4.42
            %
            
            4.28
            %
            
            4.46
            %Average
                expected life
            
            
            5
                years
            
            
            5
                years
            
            
            5
                yearsDividend
                yield
            
            
            0
            %
            
            0
            %
            
            0
            %Volatility
            
            
            356.33
            %
            
            348.92
            %
            
            342.77
            %Number
                of warrants granted
            
            
            375,000
            
            
            625,000
            
            
            1,500,000Estimated
                fair value of total warrants granted
            
            $
            299,975
            
            $
            493,692
            
            $
            1,184,815





9


**MOTIVNATION,
        INC.**
 
 **NOTES
        TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL
        STATEMENTS**




**NOTE
      5 - CONVERTIBLE NOTES PAYABLE AND DERIVATIVE LIABILITIES
      (CONTINUED)**




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, 2007, the fair values of the conversion
      feature and the stock warrants aggregated to $3,863,223. The Company recorded
      a
      gain of $50,027 and $1,949,913 related to the change in fair value in these
      derivatives during the first six months ended June 30, 2007 and 2006,
      respectively. This amount is recorded as “Change in Derivative Liabilities” a
      component of other income 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 - STOCKHOLDERS’ EQUITY**





Shares
      for Debt Agreement




On
      February 2, 2006 the Board of Directors approved the issuance of 217,000
      unregistered shares of common stock to the Chief Financial Officer and Secretary
      of the Company, and the Company entered into Shares for Debt Agreement with
      the
      CFO on the same date. The consideration received by the Company consisted of
      $50,000 in services rendered by the CFO during the period from January 1, 2005
      through December 31, 2005, and a full release from any other claims for
      compensation relating to such period. The services had been accrued in prior
      year.




10




**MOTIVNATION,
      INC.**





**NOTES
      TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS**




The
      Board
      has also approved the issuance of 435,000 unregistered shares of common stock
      to
      the Chief Executive Officer and Chairman of the Board of the Company, and the
      Company entered into Shares for Debt Agreement with the CEO on the same date.
      The consideration received by the Registrant consisted of $100,000 in services
      rendered by the CEO during the period from January 1, 2005 through December
      31,
      2005, and a full release from any other claims for compensation relating to
      such
      period. The services had been accrued in prior year.




The
      value
      of the shares was based on the lowest price of the last trading day from
      February 2, 2006 (date of grant) which was $0.23 per share as there was limited
      trading volume. Therefore, no gain or loss on debt settlement was
      recorded.





Restricted
      Stock Agreements





The
      Company recognized $101,831 in compensation during the first six months ended
      June 30, 2006 based on the vesting conditions provided by the Restricted Stock
      Agreements dated February 15, 2005.





As
      of
      June 30, 2006, the remaining unvested shares under the Agreements amounted
      to
      61,445 shares or $67,590.





**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
            
            For
                six monthsended
                June 30,
            
            ended
                June 30,2007
            
            2006
            
            2007
            
            2006Numerator:Net
                loss
            
            $
            (403,800
            )
            $
            (361,212
            )
            $
            (800,699
            )
            $
            (2,266,488
            )Denominator:Weighted
                average number of shares
            
            
            7,232,781
            
            
            4,451,840
            
            
            7,139,122
            
            
            3,578,360Net
                loss per share-basic and diluted
            
            $
            (0.06
            )
            $
            (0.08
            )
            $
            (0.11
            )
            $
            (0.63
            )




As
      of
      June 30, 2007, the Company has 2.5 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 3,973 and 3,975 shares for the three and six months ended June
      30,
      2007, respectively, relating to its 10% related party convertible debt that
      are
      anti-dilutive. As of June 30, 2007, depending on the stock price on the
      conversion date, up to maximum of 240,982,751 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.”





As
      the
      Company incurred net losses for the three and six months ended June 30, 2006,
      potential dilutive securities from stock warrants and unvested common stocks
      totaling 93,624 and 116,438 equivalent shares, respectively, have been excluded
      from diluted net loss per share computations as their effect was deemed
      anti-dilutive. In accordance with SFAS No. 128, *“Earnings
      Per Share”,* the
      Company also has excluded from the calculation of diluted net loss per share
      approximately 3,664 and 3,626 shares, respectively, relating to its 10% related
      party convertible debt that are anti-dilutive. As of June 30, 2006, depending
      on
      the stock price on the conversion date, up to maximum of 405,642,910 shares,
      subject to certain adjustments, may be issued upon conversion of the 8% Callable
      Secured Convertible Notes. For additional information, see “Note 5 - Convertible
      Notes Payable and Derivative Liabilities.”




11




**MOTIVNATION,
        INC.**
 
 **NOTES
        TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS**


**NOTE
      8 – BUSINESS
      AND CREDIT CONCENTRATIONS**





Three
      customers accounted approximately $413,217 or 58.9% of the Customized Automotive
      segment revenues for the three months ended June 30, 2007. One customer
      accounted for approximately $276,117 or 20.6% of the Customized Automotive
      segment revenues for the six months ended June 30, 2007. Three customers
      accounted for approximately $267,942 or 50.6% of the Customized Automotive
      segment revenues for the three months ended June 30, 2006. Two customers
      accounted approximately $230,942 or 22.5% of the Customized Automotive segment
      revenues for the six months ended June 30, 2006. The Company has no major
      customer in Customized Motorcycle segment for three and six months ended June
      30, 2007 and 2006.





The
      Company maintains its cash deposit accounts at commercial banks. At times,
      account balances may exceed federally insured limits. The Company has not
      experienced any losses on these accounts, and management believes the Company
      is
      not exposed to any significant risk on cash accounts.




**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, 2007.





In
      general, Damon’s offers a five-year warranty on workmanship to original
      purchaser and a manufacturer’s warranty from 90 days to one year for most of its
      products sold. TrixMotive warrants to the first registered owner for a period
      of
      one year or twelve thousand miles from the date of original purchase, whichever
      comes first, that this conversion shall be free from defects in materials and
      workmanship, under normal use and service. The Company’s liability under this
      warranty is limited solely to the repair or replacement of defective parts
      and/or workmanship.




12




**MOTIVNATION,
        INC.**
 
 **NOTES
        TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS**


The
      following table summarizes the activity related to the product warranty
      liability during 2007 and 2006:





As
                of June 30,
            
            2007
            
            2006Beginning
                balance
            
            $
            8,994
            
            $
            12,350Provision
                of warranties
            
            
            11,341
            
            
            6,000Utilization
                of reserve
            
            
            (11,341
            )
            
            (2,147
            )Ending
                balance
            
            $
            8,994
            
            $
            16,203





**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 unfavorable 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.




**NOTE
      10 – LEGAL
      PROCEEDINGS (CONTINUED)**




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.




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. During the second quarter
      of
      2007, there was a settlement court appearance by which the Company and the
      Plaintiff agreed to settle the claim in the amount approximately of $2,000.
      Subsequently, the plaintiff filed a petition for Chapter 7 under the Bankruptcy
      Code and the vehicle loan holder seized the title of the vehicle. As a result,
      no liability was accrued as the settlement agreement was not signed.




13




**MOTIVNATION,
        INC.**
 
 **NOTES
        TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS**
  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 liability has been accrued
      already in prior year. The Company has hired an attorney to represent the
      Company in the claim and will be negotiating a settlement.





The
      Company may be 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.





**NOTE
      11 – RELATED
      PARTY TRANSACTIONS**





The
      Company also has short-term notes payable to the officers and a related party,
      aggregate of $269,081 plus related accrued interest of $34,548 as of June 30,
      2007. The notes carry interest at range of 8% to 10% per annum and are
      unsecured.





On
      May
      15, 2007, the Company and the related parties agreed to extend the note
      agreement to December 31, 2007 from December 31, 2006.




14


**MOTIVNATION,
        INC.**
 
 **NOTES
        TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS**




**NOTE
      12 – SEGMENT
      INFORMATION**





The
      Company evaluates its reporting segments in accordance with SFAS No. 131, *“Disclosures
      about Segments of an Enterprise and Related Information.”* The
      Chief Executive Officer has been identified as the Chief Operating Decision
      Maker as defined by SFAS No. 131. The Chief Executive Officer allocates
      resources to each segment based on their business prospects, competitive
      factors, net sales and operating results.





The
      Company currently 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.





The
      Company does not track its assets by operating segments. Consequently, it is
      not
      practical to show assets by operating segments.





Summarized
      financial information of the Company’s results by operating segment is as
      follows:





For
                Three Months ended
            
            For
                Six Months endedJune
                30,
            
            June
                30,2007
            
            2006
            
            2007
            
            2006Custom
                Motorcycle:Net
                revenue to external customers
            
            $
            -
            
            $
            10,987
            
            $
            8,810
            
            $
            19,146Cost
                of revenue
            
            
            60,076
            
            
            35,156
            
            
            89,345
            
            
            46,694Margin
            
            $
            (60,076
            )
            $
            (24,169
            )
            $
            (80,535
            )
            $
            (27,548
            )Custom
                Automotive:Net
                revenue to external customers
            
            $
            701,633
            
            $
            525,708
            
            $
            1,341,135
            
            $
            1,009,452Cost
                of revenue
            
            
            653,661
            
            
            458,284
            
            
            1,257,720
            
            
            952,038Margin
            
            $
            47,972
            
            $
            67,424
            
            $
            83,415
            
            $
            57,414Total
                Net Revenue to External Customers
            
            $
            701,633
            
            $
            536,695
            
            $
            1,349,945
            
            $
            1,028,598Total
                Cost of Revenue
            
            
            713,737
            
            
            493,440
            
            
            1,347,065
            
            
            998,732Total
                Margin
            
            
            (12,104
            )
            
            43,255
            
            
            2,880
            
            
            29,866Intersegment
                Revenues:Custom
                Motorcycles
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -Custom
                Automotive
            
            
            -
            
            
            -
            
            
            -
            
            
            -Total
                Intersegment Revenues
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -




Intersegment
      transactions are recorded at cost. The margins reported reflect only the direct
      controllable expenses of each line of business and do no represent the actual
      margins for each operating segment because they do not contain corporate and
      general and administrative expenses, reduction of goodwill as well as
      stock-based compensation incurred in support of the lines of
      business.




15





**MOTIVNATION,
        INC.**
 
 **NOTES
        TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS**


**NOTE
      12 - SEGMENT INFORMATION (CONTINUED)**




**Reconciliation
        of operating segment margin to net loss before income
        taxes**




For
                Three Months ended
            
            For
                Six Months endedJune
                30,
            
            June
                30,2007
            
            2006
            
            2007
            
            2006Total
                margin for reportable segments
            
            $
            (12,104
            )
            $
            $
                43,255
            #
            $
            2,880
            
            $
            29,866Corporate
                and general and administrative expenses
            
            
            (265,139
            )
            
            (364,991
            )
            
            (539,152
            )
            
            (677,769
            )Loss
                on disposal of assets
            
            
            (15,054
            )
            
            -
            
            
            (18,744
            )
            
            (2,459
            )Interest
                and Other Expense
            
            
            (43,204
            )
            
            (55,236
            )
            
            (87,860
            )
            
            (119,266
            )Financing
                costs
            
            
            (114,931
            )
            
            (53,942
            )
            
            (208,334
            )
            
            (3,463,408
            )Change
                in Derivative Liabilities
            
            
            44,224
            
            
            50,800
            
            
            50,027
            
            
            1,949,913Interest
                and Other Income
            
            
            2,408
            
            
            18,902
            
            
            2,884
            
            
            19,035Net
                loss before income taxes
            
            $
            (403,800
            )
            $
            (361,212
            )
            $
            (798,299
            )
            $
            (2,264,088
            )





**NOTE
      13 –
      SUBSEQUENT EVENT**





Subsequent
      to June 30, 2007, the Company entered a preliminary agreement to establish
      a
      joint venture with a Chinese company to design, manufacture, and develop
      products for the automotive market in China.




16




**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. provides a full range of services that cater to the custom motorcycle
      and
      automotive enthusiast, including the sale, manufacture, converting,
      customization, armor protecting, and installation of custom-built automotive
      and
      motorcycles, auto parts and accessories, as well as restoration, repair, and
      servicing. MotivNation’s business divisions specialize in customized
      motorcycles, specialized automotives conversions such as stretched limousines,
      and is an automotive supplier delivering advanced systems and components to
      the
      motor vehicle industry.




Our
      target clients fall into two categories: the individual custom automotive
      enthusiast or collectors of the “one of a kind” custom motorcycle and auto
      creations, and those of local fabricators, custom shops, and Original Equipment
      Manufacturers. Our primary market is the latter of two listed and these
      customers buy materials, supplies, and finished parts for their work in serving
      the growing market of custom or modified automobile and motorcycle creations.
      In
      addition to distributing several lines of materials and equipment, we plan
      to
      provide training through independent dealers and our own distribution
      infrastructure to our primary market clientele.




The
      services we provide vary based on the client type.




·
            Products
                and services provided to individual retail clients are sold directly
                to
                our retail clients and include restoration work, finish and paint
                for
                motorcycles and automobiles as well as signature paint and design
                applied
                to non automotive personal property.




·
            Products
                and services for independent dealers are sold directly to dealers
                and
                include custom and signature finish and design work on a dealer’s own
                restoration or manufactured work. Dealer products and services also
                include consultative work in the preparation of signature paint blends,
                techniques and design advice related to the dealer’s own project.




·
            Products
                and services for original equipment manufacturers include signature
                design
                and fabrication for manufactured parts and accessories which are
                part of a
                “designer” or “signature” series of products or design themes. These
                products and services are sold directly to the original equipment
                manufacturer.




Our
      manufacturing operations consist of in-house production of components and parts,
      assembly and finishing of components, painting, conversion and assembly of
      motorcycles and automobiles, and quality control, which includes performance
      testing of finished products under running conditions. The custom design,
      fabrication, finish and paint processes are moved into and out of each aspect
      of
      the manufacturing process.




17




We
      offer
      various products and services depending on which client we are catering
      to for
      every project. For our individual retail clients we offer products and services including restoration work, finish and paint for motorcycles and automobiles as well
      as
      signature paint and design applied to non automotive personal property. For
      our
      independent dealers we offer products and services direct ly
      to the
      dealers which include custom and signature finish and design work on a dealer’s
      own restoration or manufactured work. We also offer consultative work in the
      preparation of signature paints blends, techniques, and design advice related
      to
      the dealer’s own project. For our original equipment manufacturers we offer
      services and products that include signature design and fabrication for
      manufactured parts and accessories, which are a party of a “designer” or
“signature” series of products or design themes. These products and services are
      also sold direct to the original equipment manufacturers.




**Results
      of Operations**




**Three
      Months Ended June 30, 2007 compared to the Three Months Ended June 30,
      2006**




*Revenues
      and Loss from Operations*




Our
      revenue, cost of revenue, selling, general and administrative expenses, and
      operating loss for the three months ended June 30, 2007, as compared to the
      three months ended June 30, 2006 are as follows:





3
                MonthsEndedJune 30, 2007
            
            3
                MonthsEndedJune 30, 2006 (restated)
            
            PercentageChangeIncrease(Decrease)Revenue
            
            $
            701,633
            
            
            536,695
            
            
            30.7
            %Cost
                of revenue
            
            
            713,737
            
            
            493,440
            
            
            44.6
            %Gross
                Profit (loss)
            
            
            (12,104
            )
            
            43,255
            
            
            (128.0
            )%Total
                Operating expenses
            
            
            280,193
            
            
            364,991
            
            
            (23.2
            )%Total
                Other expenses
            
            
            111,503
            
            
            39,476
            
            
            182.5
            %Provision
                for income taxes
            
            
            0
            
            
            0
            
            
            0
            %Operating
                (loss)
            
            $
            (403,800
            )
            
            (361,212
            )
            
            11.8
            %





*Revenues*




We had total revenues of $701,633
      and $536,695 for the three month period ended June 30, 2007, and 2006
      respectively. The increase in the Company’s revenue of 30.7% can be attributed
      to the focus on client based custom conversions.




*Cost of Revenues*




We
      incurred total costs of $713,737 and $493,440 for the three month period
      ended June 30, 2007, and 2006, respectively. Our cost of revenues increased
      44.6% from the second quarter in 2007 compared to same period in 2006. This is
      primarily due to the respective increase in revenues, and the losses taken
      on
      our in-house vehicles.




18




*Operating Expenses*




Our
      selling, general and administrative expenses consist primarily of sales,
      marketing, production and other administrative personnel, cost of facilities
      and
      related spending, salaries, and related costs for executive. The company’s major
      expenses decreased by 14.7% for the second quarter of 2007 versus 2006. This
      primarily occurred from the decreases in consulting and shipping/delivery
      expense of 100% and 64.3%. In addition decreases in salary & wages,
      insurance and accounting expense of approximately 33.5%, 1.7%, and 21.8%
      respectively. Additional contributions to the decrease were in
      advertising/promotion, and depreciation expense of 61.7%, and 19.8%
      respectively. The decrease was offset by increases in rent and bad debt expense
      of 15.7% and 2816.3% for the second quarter of 2007 compared to 2006. Also
      there
      were increases in utilities expense, and loss of disposal of assets of 39.0%
      and
      100% respectively for the same time period. Total expenses were $280,193 for
      the
      second quarter of 2007, a 23.2% decrease compared to the second quarter of
      2006.
      The major expenses incurred during the three months ended June 30, 2007 and
      2006
      were:





3
                MonthsEndedJune 30, 2007
            
            3
                MonthsEndedJune 30, 2006
            
            PercentageChangeIncrease(Decrease)Major
                Expenses:Rent
            
            $
            62,646
            
            $
            54,160
            
            
            15.7
            %Salary
                & Wages
            
            
            74,460
            
            
            111,993
            
            
            (33.5)
            %Insurance
            
            
            37,148
            
            
            37,797
            
            
            (1.7)
            %Accounting
                Fees
            
            
            11,000
            
            
            14,075
            
            
            (21.8)
            %Consulting
            
            
            0
            
            
            13,645
            
            
            (100)
            %Advertising/Promotions
            
            
            4,305
            
            
            11,234
            
            
            (61.7)
            %Shipping
                and Delivery
            
            
            3,448
            
            
            9,667
            
            
            (64.3)
            %Depreciation
            
            
            8,440
            
            
            10,522
            
            
            (19.8)
            %Bad
                debt expense
            
            
            5,833
            
            
            200
            
            
            2816.3
            %Loss
                of disposal of assets
            
            
            15,054
            
            
            0
            
            
            100
            %Utilities
            
            
            5,555
            
            
            3,997
            
            
            39.0
            %Total
                Major Expenses
            
            
            227,888
            
            
            267,290
            
            
            (14.7)
            %Total
                Expenses
            
            
            280,193
            
            
            364,991
            
            
            (23.2)
            %




19




*Other
      Income and Expenses and Net Loss*





Our
      other
      income and expenses and net loss for the three months ended June 30, 2007 and
      2006 are as follows:





3
                MonthsEndedJune 30, 2007
            
            3
                MonthsEndedJune 30,2006
            
            PercentageChangeIncrease(Decrease)Other
                income (expenses)Interest
                and other income
            
            
            2,408
            
            
            18,902
            
            
            (87.3)
            %Change
                in derivative liabilities
            
            
            44,224
            
            
            50,800
            
            
            (12.9)
            %Interest
                and other expenses
            
            
            (43,204
            )
            
            (55,236
            )
            
            (22.3)
            %Financing
                costs
            
            
            (114,931
            )
            
            (53,942
            )
            
            113.1
            %Total
                other income (expenses)
            
            
            (111,503
            )
            
            (39,476
            )
            
            182.5
            %Net
                (loss)
            
            $
            403,800
            
            
            361,212
            
            
            11.8
            %




During
      the three months ended June 30, 2007, our total other expenses increased by
      182.5% compared to the three months ended June 30, 2006. This was primarily
      due
      to increases in financing costs of 113.1%. In addition interest and other
      expenses decreased by 22.3%. This increase was slightly offset by a decreases
      in
      interest and other income, and change in derivative liability of 87.3%, and
      12.9$ respectively for the second quarter of 2007 compared to the same period
      in
      2006. Net loss increased 11.8% primarily due to the 14.7% and 182.5% increase
      in
      total major expense and total other expenses. In addition the Company
      consolidated Damon’s
      Motorcycle division into the Trixmotive building to limit
      the overall
      expenses. As a result no new business occurred for Damon’s in the second
      quarter.




**Six
      Months Ended June 30, 2007 compared to the Six Months Ended June 30,
      2006**




*Revenues
      and Loss from Operations*




Our
      revenue, cost of revenue, selling, general and administrative expenses, and
      operating loss for the six months ended June 30, 2007, as compared to the six
      months ended June 30, 2006 are as follows:





6
                MonthsEndedJune 30, 2007
            
            6
                MonthsEndedJune 30, 2006 (restated)
            
            PercentageChangeIncrease(Decrease)Revenue
            
            $
            1,349,945
            
            
            1,028,598
            
            
            31.2
            %Cost
                of revenue
            
            
            1,347,065
            
            
            998,732
            
            
            34.9
            %Gross
                Profit (loss)
            
            
            2,880
            
            
            29,866
            
            
            (90.4)
            %Total
                Operating expenses
            
            
            557,896
            
            
            680,228
            
            
            (18.0)
            %Total
                Other expenses
            
            
            243,283
            
            
            1,613,726
            
            
            (84.9)
            %Provision
                for income taxes
            
            
            2,400
            
            
            2,400
            
            
            0
            %Operating
                (loss)
            
            $
            800,699
            
            
            2,266,488
            
            
            (64.7)
            %




20




*Revenues*




We had total revenues of $1,349,945
      and $1,028,598 for the six month period ended June 30, 2007, and 2006
      respectively. The increase in the Company’s revenue of 31.2% can be attributed
      to the focus on client based custom conversions.




*Cost of Revenues*




We
      incurred total costs of $1,347,065 and $998,732 for the six month period
      ended June 30, 2007, and 2006, respectively. Our cost of revenues increased
      34.9% from the second quarter in 2007 compared to same period in 2006. This
      is
      primarily due to the respective increase in revenues, and the losses taken
      on
      our in-house vehicles.




*Operating Expenses*




Our
      selling, general and administrative expenses consist primarily of sales,
      marketing, production and other administrative personnel, cost of facilities
      and
      related spending, salaries, and related costs for executive. The company’s major
      expenses decreased by 6.9% for the second quarter of 2007 versus 2006. This
      primarily occurred from the decrease in consulting expense of 82.0%. In addition
      decreases in salary & wages and accounting expense of approximately 20.4%,
      and 14.6% respectively. Additional contributions to the decrease were in
      advertising/promotion, shipping/delivery, and depreciation expense of 51.4%,
      35.7%, and 10.2% respectively. The decrease was offset by increases in rent,
      insurance, and bad debt expense of 15.8%, 1.5%, and 712.4% for the second
      quarter of 2007 compared to 2006. Also there were increases in utilities
      expense, and loss of disposal of assets of 35.4% and 662.2% respectively for
      the
      same time period. Total expenses were $557,896 for the second quarter of 2007,
      a
      18.0% decrease compared to the second quarter of 2006. The major expenses
      incurred during the six months ended June 30, 2007 and 2006 were:





6
                MonthsEndedJune 30, 2007
            
            6
                MonthsEndedJune 30, 2006
            
            PercentageChangeIncrease(Decrease)Major
                Expenses:Rent
            
            $
            120,792
            
            $
            104,328
            
            
            15.8
            %Salary
                & Wages
            
            
            161,893
            
            
            203,379
            
            
            (20.4)
            %Insurance
            
            
            71,438
            
            
            70,373
            
            
            1.5
            %Accounting
                Fees
            
            
            22,000
            
            
            25,757
            
            
            (14.6)
            %Consulting
            
            
            3,811
            
            
            21,206
            
            
            (82.0)
            %Advertising/Promotions
            
            
            6,975
            
            
            14,355
            
            
            (51.4)
            %Shipping
                and Delivery
            
            
            9,866
            
            
            15,353
            
            
            (35.7)
            %Depreciation
            
            
            18,889
            
            
            21,044
            
            
            (10.2)
            %Bad
                debt expense
            
            
            8,012
            
            
            986
            
            
            712.4
            %Loss
                of disposal of assets
            
            
            18,743
            
            
            2,459
            
            
            662.2
            %Utilities
            
            
            11,361
            
            
            8,393
            
            
            35.4
            %Total
                Major Expenses
            
            
            453,781
            
            
            487,634
            
            
            (6.9)
            %Total
                Expenses
            
            
            557,896
            
            
            680,228
            
            
            (18.0)
            %




21




*Other
      Income and Expenses and Net Loss*





Our
      other
      income and expenses and net loss for the six months ended June 30, 2007 and
      2006
      are as follows:





6
                MonthsEndedJune 30, 2007
            
            6
                MonthsEndedJune 30,2006
            
            PercentageChangeIncrease(Decrease)Other
                income (expenses)Interest
                and other income
            
            
            2,884
            
            
            19,035
            
            
            (84.8)
            %Change
                in derivative liabilities
            
            
            50,027
            
            
            1,949,913
            
            
            (97.4)
            %Interest
                and other expenses
            
            
            (87,860
            )
            
            (119,266
            )
            
            (26.3)
            %Financing
                costs
            
            
            (208,334
            )
            
            (3,463,408
            )
            
            (94.0)
            %Total
                other income (expenses)
            
            
            (243,283
            )
            
            (1,613,726
            )
            
            (84.9)
            %Net
                (loss)
            
            $
            (800,699
            )
            
            (2,266,488
            )
            
            (64.7)
            %




During
      the six months ended June 30, 2007, our total other expenses decreased by 84.9%
      compared to the six months ended June 30, 2006. This was primarily due to
      decreases in financing costs and the change in derivative liabilities of
      approximately 94.0% and 97.4% respectively. In addition interest/other expenses
      and interest/other income decreased by 26.3% and 84.8% respectively for the
      second quarter of 2007 compared to the same period in 2006. Net loss decreased
      64.7% primarily due to the 18.0% and 84.9% decrease in total operating expense
      and 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, 2007, as compared
      to
      June 30, 2006 were as follows:





June
                30,
            
            June
                30,2007
            
            2006Cash
            
            $
            93,651
            
            $
            556,403Accounts
                receivable
            
            
            50,640
            
            
            87,843Prepaid
                expenses/other current assets
            
            
            51,334
            
            
            42,549Inventory
            
            
            108,490
            
            
            630,070Total
                current assets
            
            
            304,115
            
            
            1,316,865Total
                assets
            
            
            687,235
            
            
            1,952,966Total
                current liabilities
            
            
            1,119,212
            
            
            853,193Total
                liabilities
            
            
            5,386,812
            
            
            4,868,272





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
      as
      a result of continuing litigation and reserve or deposit requirements which
      are
      a result of sales growth of the business. We intend for these funding
      requirements to be fulfilled through either equity or debt
      financing.




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, 2007, we had a working deficit of $815,097.




22




*Operating
      activities:*




Net
      cash
      used in operating activities was $63,836 for the six months ended June 30,
      2007.
      This resulted primarily from a net loss of $800,699, as well as a change in
      derivative liabilities of $50,027. In addition the increase in accounts
      receivable of $3,289 and decrease in unearned revenue of $23,338 contributed.
      An
      offset to this was noncash interest expense and financing costs of $208,333
      and
      a decrease in inventory of $345,839. An additional offset was an adjustment
      in
      depreciation, loss on disposal of assets, and accounts payable/accrued
      liabilities of $18,887, 18,744, and 190,123, respectfully.





*Investing
      activities:*





Net
      cash
      used in investing activities was $1,985 which was primarily due to the purchase
      of property and equipment of $1,985.





*Financing
      activities:*





Net
      cash
      used in financing activities was $21,313 for the six months ended June 30,
      2007,
      and resulted primarily from payments on long-term debt of $15,292. In addition
      the company made net repayments to related parties of $6,021.





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. These steps include increasing
      operating revenues over last year through the growth of the business by
      expanding our product line to offer complete customized vehicles by financing
      our own chassis through our credit line and equity financing. In addition the
      company has been looking into, reducing costs by bringing certain projects
      in-house through possible acquisitions, and constantly testing the market for
      better pricing on our costs of goods sold. As well as making timely payments
      of
      our obligations, building our stock and debt sources to provide additional
      working capital, and continuing to review our business plan to assure we are
      moving the business forward in a cost-effective manner. The company will and
      continuing continue to examine the segments of our business that offer the
      most
      profitable opportunity for success and eliminating operations and practices
      which detract from our profitability. During the second quarter of 2007 the
      company sold its last in-house custom vehicle, and is now focusing on selling
      client end custom automotive conversions.





There
      can
      be no assurance that we will be successful in executing our plans to improve
      operations or obtain additional debt or equity financing. If the company is
      unable to have adequate cash from operations and is unsuccessful in obtaining
      financing, the company would have to cut back on operations. In addition 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.




**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, 2007, the Company had a
      loss
      on disposal of assets of $15,054 for the year to date.




23




****** *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.




*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.




**R** **isks
      and Uncertainties**




Our
      business, and the value of our common stock, is affected by certain risks and
      uncertainties, some of which include the following:




***We
      Have Historically Lost Money And Losses May Continue In The Future, Which May
      Cause Us To Curtail Operations.***




Since
      our
      inception, we have not been profitable and we may not be profitable in the
      future. We may continue to incur losses on a quarterly or annual basis for
      a
      number of reasons, some within and others outside our control. (See
“ *Our
      Limited Operating History Makes It Difficult To Forecast Our Future Results”* and
      “ *We
      Are Subject to Price Volatility Due to Our Operations Materially
      Fluctuating* .”)
      No
      assurances can be given that we will be successful in reaching or maintaining
      profitable operations. Accordingly, we may experience liquidity and cash flow
      problems. If our losses continue, our ability to operate may be severely
      impacted.




24




***If
      We Are Unable To Secure Future Capital, We Will Be Unable To Continue Our
      Operations.***





The
      growth of our business will require the commitment of substantial capital
      resources. We have not been profitable in our operations. If funds are not
      available from operations, we will need additional funds. We may seek such
      additional funding through public and private financing, including debt or
      equity financing. Adequate funds for these purposes, whether through financial
      markets or from other sources, may not be available when we need them. Even
      if
      funds are available, the terms under which the funds are available to us may
      not
      be acceptable to us. Insufficient funds may require us to delay, reduce or
      eliminate some or all of our planned activities.





***Our
      Independent Auditors Have Noted In Their Opinion That We Have Suffered Recurring
      Losses, Which Raises Substantial Doubt About Our Ability To Continue As A Going
      Concern.***





To
      successfully execute our current strategy, we will need to improve our working
      capital position. The report of our independent auditors accompanying our
      financial statements for the year ended December 31, 2006 and the notes to
      our
      unaudited financial statements for the three months ended June 30, 2007, however
      it includes an explanatory paragraph indicating there is a substantial doubt
      about the Company’s ability to continue as a going concern due to recurring
      losses. We plan to overcome the circumstances that impact our ability to remain
      a going concern through a combination of increased revenues and decreased costs,
      with interim cash flow deficiencies being addressed through additional debt
      and/or equity financing. There can be no assurances that these plans will be
      successful.








***Our
      Limited Operating History Renders Makes It Difficult To Forecast Our Future
      Results.***





We
      had
      been a non-operating company for many years prior to the acquisition of Damon’s
      and Moonlight Industries. Therefore, we have a limited operating history and
      our
      business and prospects must be considered in light of the risks and
      uncertainties inherent in a development-stage venture, many of which are beyond
      our control, including:




·
            our
                ability to distribute, sell and market our services and
                products;




·
            our
                ability to develop and offer new services and
                products;




·
            the
                performance of our motorcycle and automotive products and
                accessories;




·
            the
                significant and ongoing funds needed to achieve our production, marketing
                and sales objectives;




·
            the
                appeal of our services and products to
                consumers;




·
            our
                ability to generate adequate revenue to support our
                operations;




·
            our
                ability to maintain positive cash flow resulting from extended periods
                of
                monetary responsibility in the form of labor for extensive custom
                works in
                progress;




·
            the
                loss or injury of our principal design or technical staff; and




·
            changes
                in environmental regulation and enforcementrelating
                to our operations, including those governing VOC
                emissions.




We
      cannot
      provide assurances that our business strategy will be successful or that we
      will
      successfully address those risks and the risks described herein.





In
      addition, as a result of our limited operating history, our historical financial
      and operating information is of limited value in predicting our future operating
      results. We may not accurately forecast customer behavior and recognize or
      respond to emerging trends, changing preferences or competitive factors facing
      us, and, therefore, we may fail to make accurate financial forecasts. Our
      current and future expense levels are based largely on our investment plans
      and
      estimates of future revenue. As a result, we may be unable to adjust our
      spending in a timely manner to compensate for any unexpected revenue shortfall,
      which could force us to curtail or cease our business operations.




25




***We
      Are Subject to Price Volatility Due to Our Operations Materially
      Fluctuating***




As
      a
      result of the evolving nature of the markets in which we compete, as well as
      the
      current nature of the public markets and our current financial condition, we
      believe that our operating results may fluctuate materially, as a result of
      which quarter-to-quarter comparisons of our results of operations may not be
      meaningful. If in some future quarter, whether as a result of such a fluctuation
      or otherwise, our results of operations fall below the expectations of
      investors, the trading price of our common stock would likely be materially
      and
      adversely affected. You should not rely on our results of any interim period
      as
      an indication of our future performance. Additionally, our quarterly results
      of
      operations may fluctuate significantly in the future as a result of a variety
      of
      factors, many of which are outside our control. Factors that may cause our
      quarterly results to fluctuate include, among others:




·
            our
                ability to retain existing
                customers;




·
            our
                ability to attract new customers at a steady
                rate;




·
            our
                ability to maintain customer
                satisfaction;




·
            the
                extent to which our products and services gain market
                acceptance;




·
            introductions
                of products and services by
                competitors;




·
            price
                competition in the markets in which we
                compete;




·
            our
                ability to attract, train, and retain skilled
                management,




·
              the
                  amount and timing of operating costs and capital expenditures relating
                  to
                  the expansion of our business, operations, and infrastructure;
                  and




·
              general
                  economic conditions and economic conditions specific to the aftermarket
                  motorcycle and automotive parts, service and accessories
                  industry.





***We
      May Not Be Able To Compete Effectively In Markets Where Our Competitors Have
      More Resources***




The
      motorcycle and automobile customization and accessories market is competitive
      and there are no substantial barriers to entry. We expect that competition
      will
      intensify and that new competitors may enter the market in the future. Increased
      competition may result in reduce profit margins on our products and services.
      In
      addition, many of our competitors have longer operating histories, larger
      customer bases, longer relationships with clients, and significantly greater
      financial, technical, marketing, and public relations resources than us. We
      may
      not successfully compete in any market in which we conduct currently or in
      the
      future. The fact that we compete with established competitors who have
      substantially greater financial resources and longer operating histories than
      us, enables them to engage in substantial advertising and promotion and attract
      a greater number of customers and business than we currently attract. While
      this
      competition is already intense, if it increases, it could have an even greater
      adverse impact on our revenues and profitability.





***We
      Could Fail To Attract Or Retain Key Personnel, Which Could Be Detrimental To
      Our
      Operations***




Our
      success is heavily dependent on the efforts, abilities and continued active
      participation of George R. Lefevre, Jay Isco, and Leslie McPhail, our CEO,
      CFO,
      and Chief Operating Officer respectively. In addition we are dependent on
      Richard Perez the co-founder of Damon’s Motorcycle Creation. Mr. Richard Perez
      has departed from Damon’s Motorcycle Creations. The loss of the services of
      these individuals, and other principal design or technical staff, would diminish
      our ability to deliver signature work that our clients desire and otherwise
      severely harm our business because of their irreplaceable skills and experience.
      We maintain “key person” life insurance on Mr. Lefevre and Mr. Isco; however we
      do not retain insurance on Mrs. McPhail, or Mr. Perez. We also have other key
      employees who manage our operations and if we were to lose their services,
      senior management would be required to expend time and energy to replace and
      train their replacements. To the extent that we are smaller than our competitors
      and have fewer resources we may not be able to attract the sufficient number
      and
      quality of staff. There can be no assurance that we will be able to recruit
      or
      retain other qualified personnel, should it be necessary to do so.





***We
      are subject to federal, state and local government regulations affecting
      motorcycle and automotive customization and restoration that may affect our
      operations.***





Our
      business is subject to certain federal, state and local government regulations,
      including those of the Environmental Protection Agency ("EPA") and comparable
      state agencies that regulate emissions of Volatile Organic Compounds ("VOC")
      and
      other air contaminants, the Occupational Safety and Health Administration
      ("OSHA"), and regulations governing the disposal of oil, grease, tires,
      batteries and the prevention of pollution, and State tax authorities where
      vehicle sales may be affected as well as State motor vehicle regulators with
      an
      interest in our manufacturing, sales and distribution of finished products
      . Any
      changes in the laws or regulations imposed on us by these agencies could
      significantly increase our costs of doing business and could have a very
      negative effect on our business.




26





State
      tax
      and motor vehicle regulations are migratory and in some cases regulating bodies
      may decide that a code or regulation may apply to our business when there was
      no
      history of such application. We may in the process of conducting our business
      or
      yielding to a customer request have inadvertently or in ignorance created a
      possible infraction of these regulations. We may encounter a situation in which
      a regulator from a State tax authority or motor vehicle regulator would decide
      that we have not been in compliance and insist on a material change in the
      way
      we have done business that could seriously impact our ability to continue to
      market our products to our customers. We may further encounter a corrective
      measure by a similar regulator that would take action more aggressive that
      a
      correction of our process or practice that could include a back payment, a
      fine
      or termination of our ability to do business within a particular state. These
      applications of regulations that our business has not historically been subject
      to by any of these state regulators would have a serious negative impact on
      our
      business.





In
      the
      event our business operations and facilities are subject to a number of federal,
      state and local environmental laws and regulations, such application of these
      laws, regulations to our operations may require us to make significant
      additional capital expenditures to ensure compliance in the future. Our failure
      to comply with environmental laws could result in the termination of our
      operations, impositions of fines, or liabilities in excess of our capital
      resources.





Our
      painting operations are subject to air quality management standards and
      enforcement by The South Coast Air Quality Management District (AQMD). AQMD
      requires licensing and conducts inspections from time to time relative to vapor
      as a result of our paint operations. If we were found to require adjustment
      or
      replacement of our paint and ventilation equipment as a result of an unfavorable
      AQMD inspection or suspension or change of our license with AQMD we could risk
      experiencing an interruption in production that would have a negative impact
      on
      revenue and profits.





***Product
      liability claims could severely damage our business and we may have insufficient
      insurance coverage.***





Given
      the
      nature of our products and services, we expect that we will be subject to
      potential product liability claims that could, in the absence of sufficient
      insurance coverage, have a material adverse impact on our business. There can
      be
      no assurance that our liability insurance coverage is adequate to cover all
      product liability claims. If such coverage is found to be insufficient, our
      business operations could be adversely affected.





***Our
      Success Is Dependent Upon The Popularity Of Harley-Davidson
      Motorcycles***  ***and
      Customized Automotives.***





Although
      our products and services are not limited to Harley-Davidson motorcycles, the
      success of our business is depended upon the popularity of Harley-Davidson
      motorcycles, and custom automotives. There can be no assurance, however, that
      the current popularity of Harley-Davidson motorcycles and custom automotives
      will continue. If such popularity declines, our business operations may be
      adversely affected.




***We
      do not own any patents or registered trademarks or trade names. Protecting
      our
      proprietary technology and other intellectual property may be costly and
      ineffective, and if we are unable to protect our intellectual property, we
      may
      not be able to compete effectively in our market.***




Our
      business success will depend materially on our ability to protect our trademarks
      and trade names, to preserve our trade secrets, and to avoid infringing the
      proprietary rights of third parties. In general, our proprietary rights will
      be
      protected only to the extent that protection is available and to the extent
      we
      have the financial and other resources to enforce any rights we hold.




27




We
      do not
      own any patents or registered trademarks or trade names. We may apply for
      federal and other governmental trademark registrations in the future, but we
      cannot assure you that any of our trademark applications will result in a
      registered and protectable trademark. Any registered or unregistered trademarks
      held or asserted by us may be canceled, infringed, circumvented or declared
      generic, or determined to be infringing on other marks owned by third parties.
      We intend to rely upon trade secrets, proprietary know-how and continuing
      technological innovation to become competitive in our market. We cannot assure
      you that others may not independently develop the same or similar technologies
      or otherwise obtain access to our technology and trade secrets.




Costly
      litigation might be necessary to protect our intellectual property or to
      determine the scope and validity of third-party proprietary rights. If an
      adverse outcome in litigation finds that we have infringed on proprietary rights
      of others, we may be required to pay substantial damages and may have to
      discontinue use of our products or re-design our products. Any claim of
      infringement may involve substantial expenditures and divert the time and effort
      of management.




***We
      Have Never Paid Dividends on Our Common Stock and You May Never Receive
      Dividends.***





We
      have
      not paid any cash dividends on our common stock to date and we do not anticipate
      paying cash dividends in the foreseeable future. We intend to retain earnings,
      if any, to finance the development and expansion of our business. Future
      dividend policy will be at the discretion of our Board of Directors and will
      be
      contingent upon future earnings, if any, our financial condition, capital
      requirements, general business conditions and other factors. There can be no
      assurance that cash dividends of any kind will ever be paid.





***Our
      Common Stock May Be Affected By Limited Trading Volume And May Fluctuate
      Significantly, Which May Affect Our Shareholders’ Ability To Sell Shares Of Our
      Common Stock***




There
      has
      been a limited public market for our common stock and there can be no assurance
      that a more active trading market for our common stock will develop. An absence
      of an active trading market could adversely affect our shareholders’ ability to
      sell our common stock in short time periods, or possibly at all. Our common
      stock has experienced, and is likely to experience in the future, significant
      price and volume fluctuations, which could adversely affect the market price
      of
      our common stock without regard to our operating performance. In addition,
      we
      believe that factors such as quarterly fluctuations in our financial results
      and
      changes in the overall economy or the condition of the financial markets could
      cause the price of our common stock to fluctuate substantially. These
      fluctuations may also cause short sellers to enter the market from time to
      time
      in the belief that we will have poor results in the future. We cannot predict
      the actions of market participants and, therefore, can offer no assurances
      that
      the market for our stock will be stable or appreciate over time. These factors
      may negatively impact shareholders’ ability to sell shares of our common
      stock.





***Because
      Our Stock Is Considered A Penny Stock, Any Investment In Our Stock Is Considered
      To Be A High-Risk Investment And Is Subject To Restrictions On
      Marketability.***





Trading
      of our common stock is conducted over-the-counter through the NASD Electronic
      Bulletin Board and covered by Rule 15g-9 under the Securities Exchange Act
      of
      1934. Under this rule, broker/dealers who recommend these securities to persons
      other than established customers and accredited investors must make a special
      written suitability determination for the purchaser and receive the purchaser’s
      written agreement to a transaction prior to sale. Securities are exempt from
      this rule if the market price is at least $5.00 per share.





The
      Securities and Exchange Commission adopted regulations that generally define
      a
“penny stock” as any equity security that has a market price of less than $5.00
      per share. Additionally, if the equity security is not registered or authorized
      on a national securities exchange or the NASDAQ and the issuer has net tangible
      assets under $2,000,000, the equity security also would constitute a “penny
      stock.” Our common stock does constitute a penny stock because our common stock
      has a market price less than $5.00 per share and our common stock is not quoted
      on NASDAQ. As our common stock falls within the definition of penny stock,
      these
      regulations require the delivery, prior to any transaction involving our common
      stock, of a disclosure schedule explaining the penny stock market and the risks
      associated with it. Furthermore, the ability of broker/dealers to sell our
      common stock and the ability of shareholders to sell our common stock in the
      secondary market may be limited. As a result, the market liquidity for our
      common stock is adversely affected. We can provide no assurance that trading
      in
      our common stock will not be subject to these or other regulations in the
      future, which may negatively affect the market for our common stock.
      Furthermore, this lack of liquidity also may make it more difficult for us
      to
      raise capital in the future.




28





***Future
      Acquisitions May Disrupt Our Business And Deplete Our Financial
      Resources***




Any
      future acquisitions we make could disrupt our business and seriously harm our
      financial condition. While we have no current agreements to do so, we may
      consider investments in complementary companies and products. In the event
      of
      any future acquisitions, we may:




·
            issue
                stock that would dilute our current stockholders’ percentage
                ownership;




·
            incur
                debt;




·
            assume
                liabilities;




·
            incur
                amortization expenses related to goodwill and other intangible assets;
                or




·
            incur
                large and immediate write-offs.




The
      use
      of debt or leverage to finance our future acquisitions should allow us to make
      acquisitions with an amount of cash in excess of what may be currently available
      to us. If we use debt to leverage up our assets, we may not be able to meet
      our
      debt obligations if our internal projections are incorrect or if there is a
      market downturn. This may result in a default and the loss in foreclosure
      proceedings of the acquired business or the possible bankruptcy of our
      business.




Our
      operation of any acquired business will also involve numerous risks,
      including:




·
            integration
                of the operations of the acquired business and its
                products;




·
            unanticipated
                costs;




·
            diversion
                of management’s attention from our core business;




·
            adverse
                effects on existing business relationships with suppliers and customers;




·
            risks
                associated with entering markets in which we have limited prior
                experience; and




·
            potential
                loss of key employees, particularly those of the purchased
                organizations.




**ITEM
      3. CONTROLS AND PROCEDURES**




(a)  Evaluation
      of Disclosure Controls and Procedures. Our Chief Executive Officer and Interim
      Chief Financial Officer have evaluated the effectiveness of our disclosure
      controls and procedures (as such term is defined in Rules 13a-15 and 15d-15
      under the Securities Exchange Act of 1934, as amended (the "Exchange Act"))
      as
      of the end of the period covered by this quarterly report (the "Evaluation
      Date"). Based on such evaluation, such officers have concluded that, as of
      the
      Evaluation Date, our disclosure controls and procedures are effective in
      alerting them on a timely basis to material information relating to our Company
      (including our consolidated subsidiaries) required to be included in our reports
      filed or submitted under the Exchange Act.





(b)  Changes
      in Internal Controls over Financial Reporting. During the most recent fiscal
      quarter, there have not been any significant changes in our internal controls
      over financial reporting or in other factors that have materially affected,
      or
      are reasonably likely to materially affect, our internal controls over financial
      reporting.




29




**PART
      II**





**ITEM
      1.**  **LEGAL
      PROCEEDINGS**





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.




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. Subsequently there was
      a
      settlement court appearance by which the Company and the Plaintiff agreed to
      settle the claim in the amount of $2,000. Subsequently, the plaintiff filed
      a
      petition for Chapter 7 under the Bankruptcy Code and the vehicle loan holder
      seized the title of the vehicle. As a result, no liability was accrued as the
      settlement agreement was not signed.





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
      2.**  **CHANGES
      IN SECURITIES**





Except
      as
      set forth below, there were no unregistered, or any other, sales of equity
      securities by the Company during the three month period ended June 30,
      2007.





On
      January 19, 2007 the company cancelled 45,000 shares of the Company’s common
      stock issued to Entremetrix Inc., pursuant to a rescission agreement signed
      May
      6, 2004. According to the rescission agreement all shares related to the
      rescinded transaction were to be cancelled. The certificate shall be returned
      to
      the authorized and un-issued stock.





On
      April
      27, 2007, 38,175 shares of common stock were issued to AJW Offshore, LTD
      pursuant to Rule 144e for the conversion of $221.42 of convertible debt at
      $.0058 per share.





On
      April
      27, 2007, 8,413 shares of common stock were issued to AJW Partners, LLC pursuant
      to Rule 144e for the conversion of $48.80 of convertible debt at $.0058 per
      share.




30





On
      April
      27, 2007, 23,046 shares of common stock were issued to AJW Qualified Partners,
      LLC pursuant to Rule 144e for the conversion of $133.67 of convertible debt
      at
      $.0058 per share.





On
      April
      27, 2007, 1,060 shares of common stock were issued to New Millennium Capital
      Partners II, LLC pursuant to Rule 144e for the conversion of $6.15 of
      convertible debt at $.0058 per share.





**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
      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
      for
      the second quarter of 2007




31




**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 20, 2007
            MotivNation,
              Inc.By:
            /s/ George R. LefevreGeorge
              R. Lefevre CEO





32




INDEX
                  TO EXHIBITSExhibit
                  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.




33