UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C.  20549





FORM
10-K





[X]           ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE


SECURITIES
EXCHANGE ACT OF 1934





For the
fiscal year ended December 31,
2008





[  ]           TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES
EXCHANGE ACT OF 1934





Commission
File Number 000-50048





MOTIVNATION,
INC.


(Name of
small business issuer in its charter)





Nevada
            
            82-6008492(State
      or other jurisdiction of
              incorporation
      or organization)
            
            (I.R.S.
      Employer
              Identification
      No.)8
      Corporate Park, Suite 300Irvine,
      California
            
            92606(Address
      of principal executive offices)
            
            (zip
      code)





Issuer's
telephone number including area code:  (949)
266-8979





Securities
registered under Section 12(b) of the Exchange Act: None





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





Common
Stock, $0.001 par value


(Title if
Class)





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. ( ) Yes (X) No





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. ( ) Yes (X) No





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





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (229.405 of this chapter) is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. (  )





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





Large
accelerated filer
(  )                                                                                     Accelerated
filer (  )





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





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


Yes     No
X





State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the
last business day of the registrant’s most recently completed second fiscal
quarter. As of April 9, 2009 it was approximately $266,573 based on a share
value of $0.002.





The
number of shares of Common Stock, $0.001 par value, outstanding on December 31,
2008 was 106,253,188 shares. As of March 31, 2009, 134,019,366 shares of the
issuer’s Common Stock were outstanding.











Documents
Incorporated by Reference








The
Company’s report on Form 8-K dated March 11, 2008: Item 5.02


The
Company’s report on Form 8-K dated May 2, 2008: Item 5.02, Item
9.01


The
Company’s report on Form 8-K dated May 6, 2008: Item 1.01, Item
9.01


The
Company’s report on Form 8-S dated June 12, 2008: Item 1.01


The
Company’s report on Form 8-K dated July 25, 2008: Item 7.01, Item
9.01























MOTIVNATION,
INC.


FOR
THE FISCAL YEAR ENDED


December
31, 2008





Index
to Report


on
Form 10-K








PART
      I
            Pages(s)





Item
      1.
            Description
      of Business.
            1Item
      1A.
            Risk
      Factors
            3Item
      1B.
            Unresolved
      Staff Comments
            3Item
      2.
            Property.
            3Item
      3.
            Legal
      Proceedings.
            3Item
      4.
            Submission
      of Matters to a Vote of Security Holders.
            5





PART
II





Item
      5.
            Market
      for Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities.
            5Item
      6.
            Selected
      Financial Data.
            10Item
      7.
            Management’s
      Discussion and Analysis or Financial Condition and Results of
      Operations.
            10Item
      7A.
            Quantitative
      and Qualitative Disclosures about Market Risk.
            15Item
      8.
            Financial
      Statements and Supplementary Data
            16Item
      9.
            Changes
      in and Disagreements With Accountants on Accounting and Financial
      Disclosure.
            18Item
      9A (T).
            Controls
      and Procedures.
            18Item
      9B.
            Other
      Information.
            19





PART
III





Item
      10.
            Directors
      and Executive Officers, and Corporate Governance
            19Item
      11.
            Executive
      Compensation.
            23Item
      12.
            Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters.
            24Item
      13.
            Certain
      Relationships and Related Transactions, and Director
      Independence
            25Item
      14.
            Principal
      Accountant Fees and Services
            26





PART
IV





Item
      15.
            Exhibits,
      Financial Statement Schedules
            27











FORWARD-LOOKING
STATEMENTS





This document contains “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act
of 1995. All statements other than statements of historical fact are
“forward-looking statements” for purposes of federal and state securities laws,
including, but not limited to, any projections of earnings, revenue or other
financial items; any statements of the plans, strategies and objections of
management for future operations; any statements concerning proposed new
services or developments; any statements regarding future economic conditions or
performance; any statements or belief; and any statements of assumptions
underlying any of the foregoing.





Forward-looking statements may include
the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect”
or “anticipate” or other similar words.  These forward-looking
statements present our estimates and assumptions only as of the date of this
report. Except for our ongoing securities laws, we do not intend, and undertake
no obligation, to update any forward-looking statement.





Although we believe that the
expectations reflected in any of our forward-looking statements are reasonable,
actual results could differ materially from those projected or assumed in any or
our forward-looking statements. Our future financial condition and results of
operations, as well as any forward-looking statements, are subject to change and
inherent risks and uncertainties. The factors impacting these risks and
uncertainties include, but are not limited to:





·
            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 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 enforcement relating to our operations,
      including those governing VOC
emissions.





Actual
future performance and results could differ from that contained in or suggested
by these forward-looking statements as a result of factors set forth in this
Form 10-K (including those sections hereof incorporated by reference from other
filings with the Securities and Exchange Commission), in particular as set forth
in the "Management’s Discussion and Analysis" under Item 7.





In this
filing references to “MotivNation,” “Company,” “we,” “our,” and/or “us,” refers
to MotivNation, Inc.








PART
I





ITEM
1.                      DESCRIPTION
OF BUSINESS





(a)
Business Development





We were incorporated on April 26, 1946,
under the laws of the State of Idaho for the purpose of exploring, acquiring and
developing mineral properties in the Idaho.  The initial and
subsequent efforts in the acquisition, exploration, and development of
potentially viable and commercial mineral properties were
unsuccessful.  We have since ceased our mining business.





In 2003, we merged with our
wholly-owned Nevada subsidiary and changed our corporate domicile from the State
of Idaho to the State of Nevada.  We also changed our corporate name
from Aberdeen Idaho Mining Company to Aberdeen Mining Company.





On March 8, 2004, pursuant to the terms
of the Asset Purchase Agreement dated February 26, 2004, we acquired
substantially all of the assets and liabilities of C&M Transportation, Inc.,
a Kansas corporation whose sole shareholder was Velocity Holdings,
Inc.  In the agreement we acquired substantially all of the assets and
liabilities of C&M in exchange for the issuance and delivery to C&M of
888,799 (post-split) shares of our common stock.





Due to subsequent events after the
closing of the transaction the company discovered undisclosed issues such as the
imposition of a tax lien by the Internal Revenue Service on certain assets of
C&M and the refusal by First State Bank to further finance the activities of
C&M, the parties to the Asset Purchase Agreement agreed to unwind and
rescind the C&M transaction, according to terms and conditions of a
Rescission and Mutual Release Agreement, dated May 6, 2004.





Shortly after the rescission of the
C&M transaction, on May 11, 2004 we entered into an Asset Purchase Agreement
with Damon’s Motorcycle Creations, Inc, a California
corporation.  According to the terms of the agreement we acquired
substantially all of the assets and liabilities of Damon’s in exchange for
888,799 (post-split) shares of our common stock that we issued to Damon’s sole
shareholders, Thomas Prewitt and Richard Perez.  The shares issued are
restricted stock and bear a restrictive legend.  As a result of the
transaction, Mr. Prewitt and Mr. Perez together obtained indirect control of the
Company through Damon’s ownership of a majority of our issued and outstanding
shares.





On June 25, 2004, we changed our
corporate name to “MotivNation, Inc.” by filing an amendment to our Articles of
Incorporation with the Nevada Secretary of State.  We feel the name is
more indicative of our new line of business and is more
identifiable.





On October 11, 2004, MotivNation, Inc.
and its wholly owned subsidiary, TrixMotive Inc., a Nevada corporation, entered
into an Asset Purchase Agreement with Moonlight Industries, Inc., a California
corporation, to acquire certain assets and liabilities.  According to
the terms of the agreement, we acquired certain assets and liabilities of
Moonlight in exchange for 140,000 (post-split) shares of MotivNation common
stock that was issued to Moonlight’s sole shareholders, Leslie McPhail and her
husband David McPhail.  The president of Moonlight, Leslie A. McPhail,
also serves as the Secretary of TrixMotive.  Tom Prewitt and Richard
Perez, president and secretary of MotivNation respectively, agreed to return
140,000 (post-split) shares of MotivNation’s common stock held by them prior to
the closing of the acquisition. The company will continue under the Moonlight
brand but will operate under the TrixMotive corporate entity.





1


In December of 2007, MotivNation, Inc.
decided to discontinue the operations of the Damon’s division due to lack of
sales, and cash flow to sustain operations. The company still retains rights to
the Damon’s name and may in the future resurrect the operations.





On July
18, 2008 the company’s primary operation and wholly-owned subsidiary TrixMotive
Inc. filed for bankruptcy. The company is looking for other avenues to continue
business, and is currently working on finishing its prototype bike and to
establish business interest outside the automotive business sector. In addition
the company is looking at licensing the use of Damon’s name.








(b)
Business of Issuer








In the
first three quarters of 2008 MotivNation through its subsidiary TrixMotive Inc.
provided a full-range of services that catered to the custom automotive
enthusiast, including the sale, manufacture, converting, customization, armor
protecting, and installation of custom auto parts and accessories, as well as
restoration, repair, and servicing. TrixMotive was in the business of converting
automobile chassis into stretched limousines and other specialized
automotives.





In July
of 2008 TrixMotive, Inc. ceased operating and the Company’s filed for protection
under Chapter 7 of the United States Bankruptcy Court in the Central District of
California. The company is looking for other avenues to continue business, and
is currently working on finishing its prototype bike and to establish business
interest outside the automotive business sector. In addition the company is
looking at licensing the use of Damon’s name.








Competition








Not
Applicable





Sources
of Materials and Suppliers





We obtain our supplies from national
manufacturers and after market manufacturers of automotive parts, paints, and
supplies.  These supplies are readily available and there is no
dependency on any single supplier.  We have no need for long term
supply contracts since material and parts cost are not the most significant
factor to the cost of our completed work.





Dependence
on One or More Customers





Not applicable







2


Intellectual
Property








Not
Applicable





Government
Regulations











Not
Applicable





Personnel





As of
March 31, 2009 we had 1 full-time employee, and from time to time hire
consultants to provide necessary business services.





(c)  Reports
to Security Holders





We file annual, quarterly and special
reports and other information with the SEC that can be inspected and copied at
the public reference facility maintained by the SEC at 450 Fifth Street, N.W.,
Room 1024, Washington D.C. 20549.  Information regarding the public
reference facilities may be obtained from the SEC by telephoning
1-800-SEC-0030.  Our filings are also available through the SEC’s
Electronic Date Gathering Analysis and Retrieval System which is publicly
available through the SEC’s website (www.sec.gov).  Copies of such
materials may also be obtained by mail from the public reference section of the
SEC at 450 Fifth Street, N.W., Washington D.C. 20549 at prescribed
rates.





ITEM
1A.                                RISK
FACTORS.





The
company is a smaller reporting company and no response is required pursuant to
this Item.





ITEM
1B.                                UNRESOLVED
STAFF COMMENTS.





None





ITEM
2.                      PROPERTY.





MotivNation
maintains its corporate headquarters at 8 Corporate Park, Suite 300, Irvine, CA
92606. We lease approximately 150 square feet of office space under a 6 month
lease. The monthly cost is approximately $620 per month plus any additional
services that may be used.








ITEM
3.                      LEGAL
PROCEEDINGS.





We may
from time to time be involved in routine legal matters incidental to our
business; however, at this point in time we are currently not involved in any
litigation, nor are we aware of any threatened or impending
litigation.





3


Prior to
our acquisition of the assets of Moonlight Industries a worker’s compensation
claim had been filed against Moonlight Industries by a former
employee.  Despite the fact that the injury had taken place with an
employer that was not Moonlight Industries as claim was filed against Moonlight
and has been in litigation.  Moonlight continues to defend against
this claim and believes it is without merit.  Despite the fact that
this incident had taken place prior to our acquisition on the assets of
Moonlight Industries and that we acquired only the assets and not the
liabilities of Moonlight Industries, this worker’s compensation claim could
become material to the company. In 2006 there were no inquiries regarding this
claim.





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. However, the
Company has accrued the past due rent of $19,657 in the accompanying financial
statements.





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





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





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





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





4


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








None
occurred during the 4th
Quarter.





PART
II





ITEM
      5.
            MARKET
      FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
      PURCHASES OF EQUITY SECURITIES.





Market
      Information


We have
been eligible to participate in the OTC Bulletin Board, an electronic quotation
medium for securities traded outside of the NASDAQ Stock Market, and prices for
our common stock were published on the OTC Bulletin under the trading symbol
“MOVN” through October 25, 2005, subsequently on October 26, 2005, in
conjunction with the a one for one-hundred reverse split., our OTC: BB trading
symbol changed to “MOVT”. The quotations reflect inter-dealer prices, without
retail mark-up, mark-down or commission and may not represent actual
transactions. This market is extremely limited and the prices quoted are not a
reliable indication of the value of our common stock.  The following
table sets forth the quarterly high and low bid prices for our Common Stock
during our last two fiscal years, as reported by a Quarterly Trade and Quote
Summary Report of the OTC Bulletin Board. The quotations reflect inter-dealer
prices, without retail mark-up, markdown or commission, and may not necessarily
represent actual transactions.





2008*
            2007*High
            Low
            High
            Low1st
      Quarter
            $0.008
            $0.0017
            $0.045
            $0.0152nd
      Quarter
            $0.0028
            $0.001
            $0.025
            $0.0113rd
      Quarter
            $0.0019
            $0.0003
            $0.018
            $0.0034th
      Quarter
            $0.0009
            $0.0001
            $0.009
            $0.001








2009*High
            Low1st
      Quarter
            $0.0024
            $0.0001





* Prices
have been modified to reflect post split values





5


Holders
of Common Stock





As of
March 31, 2009, we had approximately 542 stockholders of record of the
134,019,366 shares outstanding





Dividends





We have
never declared or paid dividends on our Common Stock.  We intend to
follow a policy of retaining earnings, if any, to finance the growth of the
business and do not anticipate paying any cash dividends in the foreseeable
future.  The declaration and payment of future dividends on the Common
Stock will be the sole discretion of the Board of Directors and will depend on
our profitability and financial condition, capital requirements, statutory and
contractual restrictions, future prospects and other factors deemed
relevant.





Transfer
Agent and Registrar





MotivNation’s
transfer agent is Fidelity Transfer Company, 8915 S. 700 E., Suite 102, Sandy,
UT  84070





Securities
authorized for issuance under equity compensation plans.





N/A





Recent
Sales of Unregistered Securities





The
following is a description of all equity securities of the Company sold by the
Company during the period covered by this Annual Report on Form 10-K that were
not registered under the Securities Act of 1933 as amended, including registered
sales made pursuant to Section 4(2) of the Securities Act of 1933, as
follows:





Restricted
Stock Agreements





On
February 15, 2005, the Company entered into a Restricted Stock Agreement with
each of the following directors: Mark Absher, David Psachie, and Richard Holt.
The agreement held that the company would issue 50,000 (post-split) restricted
shares to each director, in exchange for the services provided by each
director.





On
February 14, 2005, the Company entered into a Restricted Stock Agreement with
each of two consultants: George R. Lefevre, and Scott Absher. In consideration
for extraordinary services rendered by the Consultants to the Company and the
continuing dedication of the Consultants to the Company and its business, we
have issued 150,000 restricted shares to each George R. Lefevre, and Scott
Absher.





On February 15, 2005, the Company
entered into Shares for Debt Agreement with each Jay Isco, the CFO, and
Secretary of MotivNation, and Leslie McPhail the Chief Operating Officer
together with her husband David McPhail (“McPhail’s”). The company issued
100,000 (post-split)  and 600,000 (post-split)  restricted
shares to Jay Isco and the McPhail’s respectively, pursuant to the terms
described in the Shares for Debt Agreements.





6


On
November 30, 2005 MotivNation issued $300,000 in Convertible Debentures, at an
8% annual interest rate, pursuant to a Securities Purchase Agreement (the
“Agreement”). The convertible debentures can be converted into shares of common
stock under the following calculation: the Applicable Percentage (as defined
herein) multiplied by the Market Price (as defined herein).  “Market
Price” means the average of the lowest three (3) Trading Prices (as defined
below) for the Common Stock during the twenty (20) Trading Day period ending one
Trading Day prior to the date the Conversion Notice is sent by the Holder to the
Borrower via facsimile (the “Conversion Date”).  “Trading Price”
means, for any security as of any date, the intraday trading price on the
Over-the-Counter Bulletin Board (the “OTCBB”) as reported by a reliable
reporting service (“Reporting Service”) mutually acceptable to Borrower and
Holder and hereafter designated by Holders of a majority in interest of the
Notes and the Borrower or, if the OTCBB is not the principal trading market for
such security, the intraday trading price of such security on the principal
securities exchange or trading market where such security is listed or traded
or, if no intraday trading price of such security is available in any of the
foregoing manners, the average of the intraday trading prices of any market
makers for such security that are listed in the “pink sheets” by the National
Quotation Bureau, Inc.  If the Trading Price cannot be calculated for
such security on such date in the manner provided above, the Trading Price shall
be the fair market value as mutually determined by the Borrower and the holders
of a majority in interest of the Notes being converted for which the calculation
of the Trading Price is required in order to determine the Conversion Price of
such Notes.  “Trading Day” shall mean any day on which the Common
Stock is traded for any period on the OTCBB, or on the principal securities
exchange or other securities market on which the Common Stock is then being
traded. “Applicable Percentage” shall mean 50.0%.





The above
notes were issued to the following: AJW Partners, LLC a $35,700 secured
convertible debenture, AJW Qualified Partners, LLC a $97,800 secured convertible
debenture, New Millennium Capital Partners II, LLC a $4,500 secured convertible
debenture, and AJW Offshore, LTD a $162,000 secured convertible
debenture.





In
connection with the convertible notes, the following common stock issuable upon
the exercise of warrants at $1.50: 44,625 shares of common stock issuable to AJW
Partners, LLC, 122,250 shares of common stock issuable to AJW Qualified
Partners, LLC, 6,625 shares of common stock issuable to New Millennium Capital
Partners II, LLC and 202,500 to AJW Offshore, LTD.





The
holders of the 8% convertible debentures may not convert its securities into
shares of MotivNation’s common stock if after the conversion such holder would
beneficially own over 4.99% of the outstanding shares of MotivNation’s common
stock. Since the number of shares of MotivNation’s common stock issuable upon
conversion of the debentures will change based upon fluctuations of the market
price of MotivNation’s common stock prior to a conversion, the actual number of
shares of MotivNation’s common stock that will be issued under the debentures
owned by the holders is based on a reasonable good faith estimate of the maximum
amount needed.








7


On
January 4th, 2006
MotivNation issued $500,000 in Convertible Debentures under the same conditions
disclosed on November 30, 2005.





The above
notes were issued to the following: AJW Partners, LLC a $59,500 secured
convertible debenture, AJW Qualified Partners, LLC a $163,000 secured
convertible debenture, New Millennium Capital Partners II, LLC a $7,500 secured
convertible debenture, and AJW Offshore, LTD a $270,000 secured convertible
debenture.





In
connection with the convertible notes, the following common stock issuable upon
the exercise of warrants at $1.50: 74,375 shares of common stock issuable to AJW
Partners, LLC, 203,750 shares of common stock issuable to AJW Qualified
Partners, LLC, 9,375 shares of common stock issuable to New Millennium Capital
Partners II, LLC and 337,500 to AJW Offshore, LTD.





The
holders of the 8% convertible debentures may not convert its securities into
shares of MotivNation’s common stock if after the conversion such holder would
beneficially own over 4.99% of the outstanding shares of MotivNation’s common
stock. Since the number of shares of MotivNation’s common stock issuable upon
conversion of the debentures will change based upon fluctuations of the market
price of MotivNation’s common stock prior to a conversion, the actual number of
shares of MotivNation’s common stock that will be issued under the debentures
owned by the holders is based on a reasonable good faith estimate of the maximum
amount needed.





On
January 30th, 2006
MotivNation issued $1,200,000 in Convertible Debentures, under the same
conditions as disclosed for agreements signed January 4th, 2006
and November 30th,
2005.





The above
notes were issued to the following: AJW Partners, LLC a $142,800 secured
convertible debenture, AJW Qualified Partners, LLC a $391,200 secured
convertible debenture, New Millennium Capital Partners II, LLC an $18,000
secured convertible debenture, and AJW Offshore, LTD a $648,000 secured
convertible debenture.





In
connection with the convertible notes, the following common stock issuable upon
the exercise of warrants at $1.50: 178,500 shares of common stock issuable to
AJW Partners, LLC, 489,000 shares of common stock issuable to AJW Qualified
Partners, LLC, 22,500 shares of common stock issuable to New Millennium Capital
Partners II, LLC and 810,000 to AJW Offshore, LTD.





The
holders of the 8% convertible debentures may not convert its securities into
shares of MotivNation’s common stock if after the conversion such holder would
beneficially own over 4.99% of the outstanding shares of MotivNation’s common
stock. Since the number of shares of MotivNation’s common stock issuable upon
conversion of the debentures will change based upon fluctuations of the market
price of MotivNation’s common stock prior to a conversion, the actual number of
shares of MotivNation’s common stock that will be issued under the debentures
owned by the holders is based on a reasonable good faith estimate of the maximum
amount needed.





On
January 31, 2008, related accrued interest on the $2,000,000 convertible notes
of $288,174 was converted into principal. The converted principal carries
interest at 2% per annum and matures on January 31, 2011.








8


On
November 16, 2007 MotivNation entered into a subscription agreement to issue
$175,000 at an 8% annual interest rate. The convertible debentures can be
converted into shares of common stock with the conversion price being 50% of the
average of the lowest three closing bid prices of the common stock during the 20
trading day preceding the conversion date.





The above
notes were issued to the following: AJW Master Fund, Ltd for $163,450 secured
convertible debenture, AJW Partners, LLC for $9,275 secured convertible
debenture, and New Millennium Capital Partners II, LLC for $2,275 secured
convertible debenture.





In
connection with the convertible notes, the following common stock issuable upon
the exercise of warrants at $0.002: 795,000 shares of common stock issuable to
AJW Partners, LLC, 14,010,000 shares of common stock issuable to AJW Master
Fund, Ltd, and 195,000 shares of common stock issuable to New Millennium Capital
Partners II, LLC





The
holders of the 8% convertible debentures may not convert its securities into
shares of MotivNation’s common stock if after the conversion such holder would
beneficially own over 4.99% of the outstanding shares of MotivNation’s common
stock. Since the number of shares of MotivNation’s common stock issuable upon
conversion of the debentures will change based upon fluctuations of the market
price of MotivNation’s common stock prior to a conversion, the actual number of
shares of MotivNation’s common stock that will be issued under the debentures
owned by the holders is based on a reasonable good faith estimate of the maximum
amount needed.





On April
22, 2008 MotivNation entered into a subscription agreement to issue $100,000 at
an 8% annual interest rate. The convertible debentures can be converted into
shares of common stock with the conversion price being 40% of the average of the
lowest three closing bid prices of the common stock during the 20 trading day
preceding the conversion date.





The above
notes were issued to the following: New Millennium Capital Partners II, LLC for
$100,000 secured convertible debenture.





In
connection with the convertible notes, the following common stock issuable upon
the exercise of warrants at $0.002: 10,000,000 shares of common stock issuable
to New Millennium Capital Partners II, LLC





The
holders of the 8% convertible debentures may not convert its securities into
shares of MotivNation’s common stock if after the conversion such holder would
beneficially own over 4.99% of the outstanding shares of MotivNation’s common
stock. Since the number of shares of MotivNation’s common stock issuable upon
conversion of the debentures will change based upon fluctuations of the market
price of MotivNation’s common stock prior to a conversion, the actual number of
shares of MotivNation’s common stock that will be issued under the debentures
owned by the holders is based on a reasonable good faith estimate of the maximum
amount needed.





On
September 26, 2008 MotivNation entered into a subscription agreement to issue
$17,500 at an 8% annual interest rate. The convertible debentures can be
converted into shares of common stock with the conversion price being 40% of the
average of the lowest three closing bid prices of the common stock during the 20
trading day preceding the conversion date.





9


The above
notes were issued to the following: New Millennium Capital Partners II, LLC for
$17,500 secured convertible debenture.








The
holders of the 8% convertible debentures may not convert its securities into
shares of MotivNation’s common stock if after the conversion such holder would
beneficially own over 4.99% of the outstanding shares of MotivNation’s common
stock. Since the number of shares of MotivNation’s common stock issuable upon
conversion of the debentures will change based upon fluctuations of the market
price of MotivNation’s common stock prior to a conversion, the actual number of
shares of MotivNation’s common stock that will be issued under the debentures
owned by the holders is based on a reasonable good faith estimate of the maximum
amount needed.





ITEM
      6.
            SELECTED
      FINANCIAL DATA.





The
company is a smaller reporting company and no response is required pursuant to
this Item.








ITEM
      7.
            MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATION.





Overview





In the
first three quarters of 2008 MotivNation through its subsidiary TrixMotive Inc.
provided a full-range of services that catered to the custom automotive
enthusiast, including the sale, manufacture, converting, customization, armor
protecting, and installation of custom auto parts and accessories, as well as
restoration, repair, and servicing. TrixMotive was in the business of converting
automobile chassis into stretched limousines and other specialized
automotives.





In July
of 2008 TrixMotive, Inc. ceased operating and the Company’s filed for protection
under Chapter 7 of the United States Bankruptcy Court in the Central District of
California. The company is looking for other avenues to continue business, and
is currently working on finishing its prototype bike and to establish business
interest outside the automotive business sector. In addition the company is
looking at licensing the use of Damon’s name.








Fiscal
Year 2008 Compared to Fiscal Year 2007








10


Results
of Operations for the Years Ended December 31, 2008 and 2007
Compared.





Year
      Ended
              December
      31, 2008
            Year
      Ended
              December
      31, 2007Operating
      Expenses:Selling,
      General and Administrative Expenses
            $                       292,034
            $                       354,817Impairment
      of Goodwill
            -
            166,621Total
      Operating Expenses
            292,034
            521,438Total
      Other Expenses
            2,446,931
            553,040Provision
      for income taxes
            2,400
            2,400Discontinued
      Operations
            280,653
            681,900Net
      Loss
            3,022,018
            1,758,778











Operating
expenses





Our
selling, general and administrative expense consists primarily of corporate
expenditures related to maintaining a public company, and any related spending
and costs.  Major expenses decreased by 49.2% for the same period in
2008 versus 2007, primarily as a result of decreases in rent and accounting
expense of 54.7% and 25.1%, respectively. Also attributing largely to the
decrease was a decrease in salary and wages of $62,500, or 27.8% during the
twelve months ending December 31, 2008 compared to same prior period. Additional
decreases were in insurance, advertising, and utilities fees of 49.0%, 100% and
30.9%, respectively for the same time period. Also contributing were decreases
in impairment of goodwill and stock related expense of 100%, and 44.5% for the
same period in 2008 versus 2007. The largest offset was an increase in
consulting expense of $7.639 or 211.5%. There were also increases during this
period in legal and shipping and delivery fees of 56.7% and 125.8%,
respectively. Total Operating expenses were $292,034 and $521,438, respectively,
for the twelve months ended December 31, 2008 and 2007.





The Major
expenses incurred during the twelve months ended December 31, 2008 and 2007
were:





12
      Months Ended
              December
      31, 2008
            
            
            12
      Months
              Ended
              December
      31,
              2007
            
            Percentage
              Change
              Increase
              (Decrease)Major
      Expenses:Rent
            $
            7,864
            
            $
            17,360
            
            (54.7)
            %Salary
      & Wages
            
            162,500
            
            
            225,000
            
            (27.8)
            %Insurance
            
            2,087
            
            
            4,088
            
            (49.0)
            %Accounting
      Fees
            
            44,000
            
            
            58,769
            
            (25.1)
            %Consulting
            
            11,250
            
            
            3,611
            
            211.5
            %Advertising
            
            0
            
            
            105
            
            (100.0)
            %Shipping
      and Delivery
            
            1,574
            
            
            697
            
            125.8
            %Impairment
      of Goodwill
            
            0
            
            
            166,621
            
            (100.0)
            %Utilities
            
            1,483
            
            
            2,145
            
            (30.9)
            %Legal
            
            17,014
            
            
            10,858
            
            56.7
            %Stock
      Related
            
            10,237
            
            
            18,450
            
            (44.5)
            %Total
      Major Expenses
            
            258,008
            
            
            507,703
            
            (49.2)
            %Total
      Operating Expenses
            
            292,034
            
            
            521,438
            
            (44.0)
            %











11





Other
Income (Expenses) and Net Loss





Our other
income and expenses and net loss for the twelve months ended December 31, 2008
and 2007 are as follows:


12
      Months Ended
              December
      31, 2008
            
            
            12
      Months
              Ended
              December
      31,
              2007
            
            Percentage
              Change
              Increase
              (Decrease)Other
      income (expenses)Interest
      and other income
            
            113
            
            
            3,011
            
            (96.2)
            %Change
      in derivative liabilities
            
            (253,893)
            
            
            366,415
            
            169.3
            %Interest
      expenses
            
            (292,349)
            
            
            (167,307)
            
            74.7
            %Financing
      costs
            
            (1,900,802)
            
            
            (755,159)
            
            151.7
            %Total
      other income (expenses)
            
            (2,446,931)
            
            
            (1,893,891)
            
            342.5
            %Net
      (loss)
            $
            (3,022,018)
            
            
            (1,758,778)
            
            71.8
            %








Other
expenses increased approximately $1,263,240 from the year ending December 31,
2008 compared to the same period in 2007. This was primarily due to increases in
financing costs, change in derivative liabilities, and interest expense of
$1,145,643, $620,308 and $125,042 respectively. Finance costs increased
primarily due to the company receiving additional financing in 2008. This
increase was offset by a decrease in interest and other income of $2,898. The
net loss for the year ended December 31, 2008 was $3,022,018, versus a net loss
of $1,758,778 for the year ended December 31, 2007, a decrease in net loss of
$1,263,240, or 71.8%. The increase in net loss was primarily due to the
bankruptcy of the company’s subsidiary TrixMotive, Inc. in the third quarter of
2008.





LIQUIDITY
AND CAPITAL RESOURCES





Our cash, total current
assets, total assets, total current liabilities, and total liabilities as of
December 31, 2008, as compared to December 31, 2007 were as
follows:





December
      31,
            
            
            December
      31,2008
            
            
            2007Cash
            $
            32,655
            
            $
            90,672Prepaid
      expenses
            
            -
            
            
            11,532Net
      assets of TrixMotive held for liquidation
            
            70,496
            
            
            223,664Total
      current assets
            
            103,151
            
            
            325,868Total
      assets
            
            103,415
            
            
            349,673Total
      current liabilities
            
            3,398,542
            
            
            1,348,294Total
      liabilities
            
            8,683,853
            
            
            5,956,115





At December 31, 2008, we had a working
deficit of $3,295,391 resulting primarily from the company’s large convertible
notes payable, Accrued liabilities and net liabilities of TrixMotive, Inc. in
liquidation.





Net cash
used in operating activities was a negative $135,355 for the year ending
December 31, 2008. This resulted primarily from the net loss of $3,022,018.
Contributing to the net loss was an increase in cash in escrow of $17,500. An
offset to the net loss was adjustments to reconcile net loss to net cash used in
operating activities: in issuance of stocks for services, noncash interest
expense and financing costs, and a change in derivative liability of $2,500,
$2,000,874, and $253,893, respectively. In addition there was an offset due to
the increase in A/R, and accrued liabilities of $354,711. The company had a
decrease in prepaid and other assets of $11,532 which offset the net
loss.





12


Net cash
provided in investing activities for the year ending December 31, 2008 was
$zero.





Net cash
from financing activities was $117,500 for the year ending December 31, 2008 and
resulted primarily from net proceeds from convertible debt of
$117,500.





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 van and hearse conversions to
overseas clientele. The company is 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 course of 2008 the company shut down its
primary operations and is looking for an acquisition or merger of another
operation/company.





In 2008 the California State Board of
Equalization performed a sales tax audit on the company. After review
MotivNation was billed $22,664.74 in additional taxes, and $7,869.81 in
additional penalties and interest. The company is currently paying down this
liability, and as of March 31, 2008 owes approximately $22,600 to the State
Board of Equalization.








Going
Concern





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. The operations of the company have continued to be
unprofitable and cash flow negative. The company has been dependent on outside
institutions for additional funding to keep the operations running. If positive
cashflow or continued funding can not be achieved, the company will have to look
at other avenues to continue business. This may possibly include an acquisition
or merger of another operation/company by the exchange of shares.











13


OFF-BALANCE
SHEET ARRANGEMENTS





We do not have any off-balance sheet
arrangements that have or are reasonably likely to have a current or future
effect on our financial condition, changes in financial condition, revenues or
expenses, results or operations, liquidity, capital expenditures or capital
resources that is material to investors.





APPLICATION
OF CRITICAL ACCOUNTING POLICIES AND PRONOUNCEMENTS.





Our
consolidated financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America (“GAAP”). GAAP
requires us to make estimates and assumptions that affect the reported amounts
in our consolidated financial statements including various allowances and
reserves for accounts receivable and inventories, the estimated lives of
long-lived assets and trademarks and trademark licenses as well as claims and
contingencies arising out of litigation or other transactions that occur in the
normal course of business. The following summarize our most significant
accounting and reporting policies and practices:





MotivNation,
Inc Accounting Policies





Our
accounting policies are fully described in Note 2 to our consolidated financial
statements. The following describes the general application of accounting
principles that impact our consolidated financial statements.





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 December 31,
2008, the Company had an impairment of goodwill of $zero and a loss on disposal
of assets of $zero.





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.





14


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.





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.





MotivNation,
Inc. results of operations are based upon our consolidated financial statements,
which have been prepared in accordance with accounting principals generally
accepted in the United States. The preparation of these financial statements
requires us to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses, and related disclosure of contingent
assets and liabilities. On an on-going basis, we evaluate our estimates,
including those related to bad debt, inventories, investments, intangible
assets, income taxes, financing operations, and contingencies and
litigation.





MotivNation
bases its estimates on historical experience and on various other assumptions
that are believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or
conditions.





ITEM
      7A.
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK





N/A














15








ITEM
8.                      FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA





See
Financial Statements and Financial Statement Schedules appearing on page F-1
through F-17 of this Form 10-K.










Report
      of Independent Certified Public Accountants
            17Consolidated
      Balance Sheet as of December 31, 2008 and 2007
            F-1Consolidated
      Statement of Operations for the fiscal year ended December 31, 2008,
      2007
            F-2Statement
      of Changes in Stockholders’ Deficit for the fiscal ended December 31,
      2008, 2007
            F-3Consolidated
      Statements of Cash Flows for the fiscal years ended December 31, 2008,
      2007
            F-4Notes
      to Financial Statements
            F-5
      - F-17


16
 
 HAROLD Y.
SPECTOR,
CPA                                                                
SPECTOR, WONG
& DAVIDIAN, LLP 80 SOUTH LAKE
AVENUE
 CAROL S.
WONG,
CPA                                                      
 Certified
Public Accountants
                                                                           
SUITE  723
 Z. DAVID DAVIDIAN, CPA
                                                                
1- (888)
584-5577                                                                
PASADENA, CA 91101
 FAX  (626)
584-6447
 admin@swdcpa.com



























REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To the
Board of Directors and Stockholders of




MotivNation,
Inc.




We have
audited the accompanying consolidated balance sheets of MotivNation, Inc. as of
December 31, 2008 and 2007, and the related consolidated statements of
operations, stockholders’ deficit, and cash flows for the years then ended.
These consolidated financial statements are the responsibility of the company’s
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.






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




In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of MotivNation, Inc. as of
December 31, 2008 and 2007, and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.




The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 1, the
Company's ability to continue in the normal course of business is dependent upon
the success of future operations. The Company has recurring losses, substantial
working capital and stockholders' deficit and negative cash flows from
operations. In July 2008, the Company’s principal operating subsidiary has
ceased its operations and filed for Chapter 7 bankruptcy. These conditions raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans regarding these matters are also described in Note 1. These
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.








/s/Spector,
Wong & Davidian, LLP


Pasadena,
California


April 7,
2009


MOTIVNATION,
INC.
 
 CONSOLIDATED
BALANCE SHEETS


As
      of December 31,
            
            As
      of December 31,2008
            
            2007ASSETSCurrent
      AssetsCash
            
            $     15,155
            
            $     90,672Cash
      in Escrow
            
            17,500
            
            -Prepaid
      expenses and other current assets
            
            -
            
            11,532Net
      assets of TrixMotive held for liquidation
            
            70,496
            
            223,664Total
      Current Assets
            
            103,151
            
            325,868Debt
      issuance cost, net
            
            264
            
            23,805TOTAL
      ASSETS
            
            $   103,415
            
            $   349,673LIABILITIES
      AND STOCKHOLDERS' DEFICITCurrent
      LiabilitiesAccounts
      payable
            
            $     30,039
            
            $     46,266Accrued
      liabilities
            
            750,662
            
            667,898Net
      liabilities of discontinued operations
            
            52,234
            
            10,588Net
      liabilities of TrixMotive in liquidation
            
            494,234
            
            466,057Convertible
      notes payable, net, current portion
            
            1,876,140
            
            -Short-term
      notes payable to related parties
            
            195,233
            
            157,485Total
      Current Liabilities
            
            3,398,542
            
            1,348,294Long-Term
      DebtConvertible
      notes payable, net of unamortized discount of $627,809 and
            39,731
            
            698,786$1,394,249
      for 2008 and 2007, respectivelyDerivative
      liabilities
            
            5,245,580
            
            3,909,035Total
      Long-Term Liabilities
            
            5,285,311
            
            4,607,821Total
      Liabilities
            
            8,683,853
            
            5,956,115Stockholders'
      DeficitCommon
      Stock, $0.001 par value; 300,000,000 shares authorized;issued
      and outstanding 2008 106,253,188 shares; 2007 16,266,157
      shares
            106,431
            
            16,267Paid-in
      Capital
            
            2,504,619
            
            2,546,761Accumulated
      deficit
            
            (11,191,488)
            
            (8,169,470)Total
      Stockholders' Deficit
            
            (8,580,438)
            
            (5,606,442)TOTAL
      LIABILITIES AND STOCKHOLDERS' DEFICIT
            
            $   103,415
            
            $    349,673








See Notes
to Consolidated Financial
Statements                                                                                                                                          
F-1
 
 MOTIVNATION,
INC.
 
 CONSOLIDATED
STATEMENTS OF OPERATIONS





For
      years endedDecember
      31,2008
            
            2007Operating
      Expenses:Selling,
      general and administrative Expenses
            
            $     292,034
            
            $    354,817Impairment
      of Goodwill
            
            -
            
            166,621Total
      Operating Expenses
            
            292,034
            
            521,438Operating
      loss
            
            (292,034)
            
            (521,438)Other
      income(expenses)Interest
      and other income
            
            113
            
            3,011Change
      in derivative liabilities
            
            (253,893)
            
            366,415Interest
      expense
            
            (292,349)
            
            (167,307)Financing
      costs
            
            (1,900,802)
            
            (755,159)Total
      other income(expenses)
            
            (2,446,931)
            
            (553,040)Net
      loss before state franchise tax
            
            (2,738,965)
            
            (1,074,478)State
      franchise tax
            
            2,400
            
            2,400Net
      loss from continuing operations
            
            (2,741,365)
            
            (1,076,878)Discontinued
      OperationsNet
      loss from discontinued operations(net
      of applicable taxes of $0 for 2008 and 2007)
            
            (280,653)
            
            (681,900)Net
      loss
            
            $(3,022,018)
            
            $(1,758,778)Net
      loss from continuing operations per share-Basic and
Diluted
            
            $(0.06)
            
            $(0.10)Net
      loss
            
            $(0.07)
            
            $(0.17)Weighted
      Average Number of Shares
            
            45,627,249
            
            10,528,987








See Notes
to Consolidated Financial
Statements                                                                                                                                          
F-2
 
 MOTIVNATION,
INC.
 
 CONSOLIDATED
STATEMENTS OF STOCKHDOLERS’ DEFICIT
 For
years ended December 31, 2008 and 2007





Common
      Stock
            Paid-in
            AccumulatedShares
            Amount
            Capital
            Deficit
            TotalBalance
      at December 31, 2006
            7,045,463
            $        7,046
            $  2,499,132
            $(6,410,692)
            $
      (3,904,514)Conversion
      of notes payable
            9,220,694
            9,221
            16,311
            
            25,532Reclassification
      of derivative liabilitiesand
      unamortized discount due to conversion
            
            
            31,318
            
            31,318Net
      loss
            
            
            
            (1,758,778)
            (1,758,778)Balance
      at December 31, 2007
            16,266,157
            16,267
            2,546,761
            (8,169,470)
            (5,606,442)Conversion
      of notes payable
            84,987,030
            85,164
            (67,813)
            
            17,351Issuance
      of stocks for services
            5,000,000
            5,000
            (2,500)
            
            2,500Reclassification
      of derivative liabilitiesand
      unamortized discount due to conversion
            
            
            28,171
            
            28,171Net
      loss
            
            
            
            (3,022,018)
            (3,022,018)Balance
      at December 31, 2008
            106,253,187
            $    106,431
            $  2,504,619
            $(11,191,488)
            $
      (8,580,438)








See Notes
to Consolidated Financial
Statements                                                                                                                                          
F-3
 
 MOTIVNATION,
INC.
 
 CONSOLIDATED
STATEMENTS OF CASH FLOWS





For
      the years ended December 31,
            2008
            
            2007CASH
      FLOW FROM OPERATING ACTIVITIES FROM CONTINUING OPERATIONS:Net
      loss
            $(3,022,018)
            
            $(1,758,778)Add:
      Net loss from discontinued operations, net of tax
            280,653
            
            681,900Adjustments
      to reconcile net loss to net cash used in operating
      activities:Noncash
      interest expense and financing costs
            2,000,874
            
            755,159Change
      in derivative liabilities
            253,893
            
            (366,415)Issuance
      of stocks for services
            2,500
            
            -Impairment
      of goodwill
            -
            
            166,621(Increase)
      Decrease in:Cash
      in Escrow
            (17,500)
            
            -Prepaid
      and other assets
            11,532
            
            4,088Increase
      (Decrease) in:Accounts
      payable and accrued liabilities
            354,711
            
            376,747Net
      cash flows used in operating activities from continuing
      operations
            (135,355)
            
            (140,678)CASH
      FLOW FROM INVESTING ACTIVITIES FROM CONTINUING OPERATIONS:Net
      cash flows provided by (used in) investing activities from continuing
      operations
            -
            
            -CASH
      FLOW FROM FINANCING ACTIVITIES FROM CONTINUING OPERATIONS:Proceeds
      from convertible debt
            117,500
            
            175,000Net
      cash flows provided by financing activities from continuing
      operations
            117,500
            
            175,000NET
      CASH PROVIDED BY (USED IN) CONTINUING OPERATIONS
            (17,855)
            
            34,322NET
      CASH USED BY DISCONTINUED OPERATIONS
            (57,662)
            
            (112,702)NET
      DECREASE IN CASH
            (75,517)
            
            (78,380)CASH
      AT BEGINNING OF YEAR
            90,672
            
            169,052CASH
      AT END OF PERIOD
            $         15,155
            
            $       90,672SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION:Income
      Taxes Paid
            $           2,400
            
            $         2,400Interest
      Paid
            $                   -
            
            $                 -Noncash
      Investing and Financing  Activities:Conversion
      of notes payable
            $         17,351
            
            $       25,532Transfer
      unamortized discount to paid in capital due to debt
    conversion
            $           5,357
            
            $       18,499Transfer
      derivative liabilities to paid in capital debt conversion
            $         33,528
            
            $       49,817Conversion
      of accrued interest into convertible debt
            $       288,174
            
            $                 -Issuance
      of warrants in lieu of convertible debt
            $         15,000
            
            $       59,995Beneficial
      conversion features on convertible debt
            $    1,101,178
            
            $     346,976





See Notes
to Consolidated Financial
Statements                                                                                                                                          
F-4
 
 MOTIVNATION,
INC.
 
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS





NOTE
1 – NATURE OF BUSINESS AND GOING CONCERN





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





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





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





Going Concern: The
Company's consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the settlement
of liabilities and commitments in the normal course of business. The Company
incurred losses from continuing operations totaling $2,741,365 and $1,076,878
for the years ended December 31, 2008 and 2007, respectively. In addition, the
Company has an accumulated deficit of $11,191,488 and working capital deficit of
$3,295,391 as of December 31, 2008.  In the near term, the Company
expects operating costs to continue to exceed funds generated from
operations.





The
application of the going concern concept is dependent upon the Company’s ability
to receive continued financial support from its creditors, stockholders and
external investors. During 2008, the Company received $117,500 from issuing 8%
callable secured convertible debts.  In July 2008, the Company’s
principal operating subsidiary has ceased its operations and filed for Chapter 7
bankruptcy. Subsequently, the Company will continue to build its prototype bike
and seeks for new business opportunities. The ability of the Company to continue
as a going concern is dependent its ability to meet its financing arrangement
and the success of its future operations. The consolidated financial statements
do not include any adjustments that might be necessary if the Company is unable
to continue as a going concern.








NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Principle of Consolidation
and Presentation: The accompanying consolidated financial statements
include the accounts of MotivNation, Inc. and its subsidiaries after elimination
of all intercompany accounts and transactions. As the Company ceased the
customizing motorcycles business in fourth quarter of 2007 and its wholly-owned
subsidiary, TirxMotive, ceased operations effective as of the bankruptcy filing
date, the accompanying financial statements have been retroactively adjusted to
reflect the impact of the discontinuation of both businesses. The results of the
customizing automobiles and motorcycles segments have been classified as
discontinued operations in the accompanying consolidated statements of
operations for years ended December 31, 2008 and 2007.





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.




















F-5

















NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)





Revenue and Cost
Recognition: The Company recognizes revenues on the completed-contract
method. Under this method, contract costs and related billings are accumulated
in the accounting records and reported as deferred items on the balance sheet
until the job is complete or substantially complete, provided that
collectibility is reasonably assured. A contract is regarded as substantially
complete if remaining costs of completion are immaterial. When the accumulated
costs exceed the related billings, the excess is presented as a current asset
(inventory account). If billings exceed related costs, the difference is
presented as a current liability.  Cash payments received in advance
are deferred. Completed-contract method is used because management considers
estimated total costs are not dependable measure of progress on the
contracts.





Contract
costs include all direct material and labor costs and those indirect costs
related to contract performance, such as indirect labor, supplies, tools, and
warranty work.





Vehicle
sales are recorded when the title and risks and rewards of ownership have
passed, provided that collectibility is reasonably assured.





Allowance for Bad
Debts: The Company provides an allowance for doubtful accounts that is
based upon a review of outstanding receivables, historical collection
information, and existing economic conditions.  As of December 31,
2008, accounts receivable were fully written off.





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





Fair Value of Financial
Instruments: The Company’s financial instruments consist principally of
cash, accounts receivable, accounts payable and borrowings. The Company believes
the financial instruments’ recorded values approximate current values because of
their nature and respective durations. The convertible notes payable were
evaluated and determined not conventional convertible and, therefore, because of
certain terms and provisions including liquidating damages under the associated
registration rights agreement the embedded conversion option was bifurcated and
has been accounted for as a derivative liability instrument. The stock warrants
issued in conjunction with these 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. The fair value of embedded conversion options and stock warrants are
based on a Black-Scholes fair value calculation. The fair value of convertible
notes payable is based on discounted cash flows of principal and interest
payments.





Inventories: Raw
materials and vehicles inventories are stated at the lower of cost or market,
using the first-in, first-out method. Work in process inventory includes all
direct materials, labor and overhead costs. As of December 31, 2008, all
inventories, except a bike project, were disposed.  A provision of
$25,500 was made to reduce the bike project to its estimated scrap
values.





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. As of December 31, 2008, all
property and equipment was disposed.




















F-6

















NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)





Goodwill: The Company
accounts for goodwill in accordance with SFAS No. 141, “Business Combinations” and
SFAS No. 142, “Goodwill and
Other Intangible Assets.”  Under SFAS No. 142, goodwill and
intangibles that are deemed to have indefinite lives are no longer amortized
but, instead, are to be reviewed at least annually for
impairment.  Application of the goodwill impairment test requires
judgment, including the identification of reporting units, assigning assets and
liabilities to reporting units, assigning goodwill to reporting units, and
determining the fair value.  Significant judgments required to
estimate the fair value of reporting units include estimating future cash flows,
determining appropriate discount rates and other assumptions.  Changes
in these estimates and assumptions could materially affect the determination of
fair value and/or goodwill impairment for each reporting unit.





The
Company recorded $333,242 of goodwill in connection with its acquisition of
Moonlight Industries, Inc. The amount that the Company recorded in connection
with this acquisition was determined by comparing the aggregate amounts of the
respective purchase price plus related transaction costs to the fair values of
the net tangible and identifiable intangible assets acquired for the business
acquired. As of December 31, 2007, the goodwill was determined not recoverable,
and fully impaired.





Convertible Notes Payable
and Derivative Liabilities: The Company accounts for convertible notes
payable and warrants in accordance with Statement of Financial Accounting
Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This standard requires the
conversion feature of convertible debt be separated from the host contract and
presented as a derivative instrument if certain conditions are met. Emerging
Issue Task Force (EITF) 00-19, "Accounting for Derivative Financial
Instruments Indexed to and Potentially Settled in a Company's Own Stock"
and EITF 05-2, "The Meaning of
"Conventional Convertible Debt Instrument" in Issue No. 00-19" were also
analyzed to determine whether the debt instrument is to be considered a
conventional convertible debt instrument and classified in stockholders' equity.
The convertible notes payable were evaluated and determined not conventional
convertible and, therefore, because of certain terms and provisions including
liquidating damages under the associated registration rights agreement the
embedded conversion option was bifurcated and has been accounted for as a
derivative liability instrument. The stock warrants issued in conjunction with
these 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 reporting date. The issuance date valuation
was used for the effective debt discount that these instruments represent. The
debt discount is amortized over the three-year life of the debts using the
effective interest method. The reporting date valuation was used to record the
fair value of these instruments at the end of the reporting period with any
difference from prior period calculations reflected in the consolidated
statement of operations.





Net Income 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 and shares issuable under convertible
debt.





Income Taxes: Income
tax expense is based on pretax financial accounting income. Deferred 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.








F-7














NOTE
2 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)





Stock-Based
Compensation: The Company accounts for stock issued to non-employees in
accordance with the provisions of SFAS No. 123, “Accounting for Stock-Based
Compensation” 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 March 2008, the Financial Accounting Standards Board
(“FASB”) issued Statement
of Financial Accounting Standards (SFAS) No. 161, “Disclosures about
Derivative Instruments and Hedging Activities” (“SFAS 161”). SFAS 161 is
intended to improve financial reporting about derivative instruments and hedging
activities by requiring companies to enhance disclosure about how these
instruments and activities affect their financial position, performance and cash
flows. SFAS 161 also improves the transparency about the location and amounts of
derivative instruments in a company’s financial
statements and how they are accounted for under SFAS 133. SFAS 161 is effective
for financial statements issued for fiscal years beginning after November 15,
2008 and interim periods beginning after that date. As such, the Company is
required to adopt these provisions beginning the quarter ending in February
2009. The Company is currently evaluating the potential impact of this standard
on its consolidated financial statements.





In
May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally
Accepted Accounting Principles.”  SFAS No. 162 identifies the sources
of accounting principles and the framework for selecting the principles used in
the preparation of financial statements of non-governmental entities that are
presented in conformity with generally accepted accounting principles in the
United States of America.  SFAS No. 162 will be effective 60 days
after the Securities and Exchange Commission approves the Public Company
Accounting Oversight Board’s amendments to AU Section 411.  The
Company does not anticipate the adoption of SFAS No. 162 will have an impact on
its consolidated financial statements.





In May
2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee
Insurance Contracts – an interpretation of FASB Statement No.
60.”  SFAS No. 163 requires that an insurance enterprise recognize a
claim liability prior to an event of default (insured event) when there is
evidence that credit deterioration has occurred in an insured financial
obligation.  This Statement also clarifies how SFAS No. 60 applies to
financial guarantee insurance contracts, including the recognition and
measurement to be used to account for premium revenue and claim liabilities.
Those clarifications will increase comparability in financial reporting of
financial guarantee insurance contracts by insurance enterprises. This Statement
requires expanded disclosures about financial guarantee insurance contracts. The
accounting and disclosure requirements of the Statement will improve the quality
of information provided to users of financial statements.  SFAS No. 163
will be effective for financial statements issued for fiscal years beginning
after December 15, 2008.  The Company does not expect the adoption of SFAS
No. 163 will have a material impact on its financial condition or results of
operation.





In
June 2008, the FASB issued FASB SP EITF 03-6-1, “Determining Whether
Instruments Granted in Share-Based Payment Transactions Are Participating
Securities.”  SP EITF 03-6-1 addresses whether instruments granted in
share-based payment transactions are participating securities prior to vesting,
and therefore need to be included in the computation of earnings per share under
the two-class method as described in SFAS No. 128, “Earnings per
Share.”  SP EITF 03-6-1 is effective for financial statements issued
for fiscal years beginning on or after December 15, 2008 and earlier
adoption is prohibited.  The Company is required to adopt SP EITF
03-6-1 in the first quarter of 2009 and is currently evaluating the impact that
SP EITF 03-6-1 will have on its financial statements.














F-8








NOTE
2 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)





In
December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interest in
Consolidated Financial Statements - An Amendment of ARB No. 51." SFAS 160
clarifies the accounting for noncontrolling or minority interests. This
statement requires expanded disclosures in the consolidated financial statements
that clearly identify and distinguish between the interests of the parent's
owners and interests of the noncontrolling owners of a subsidiary. Those
expanded disclosures include a reconciliation of the beginning and ending
balances of the equity attributable to the parent and the noncontrolling owners
and a schedule showing the effects of changes in a parent's ownership interest
in a subsidiary on the equity attributable to the parent. The provisions of SFAS
160 are effective for fiscal years beginning after December 15, 2008. The
Company is currently evaluating the impact of the adoption of SFAS 160 on its
consolidated financial statements.





In
December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business
Combinations” (“SFAS 141(R)”). SFAS No. 141(R) will replace SFAS No. 141, and
establishes principles and requirements for how the acquirer in a business
combination recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed and any noncontrolling interest in the
acquire; recognizes and measures the goodwill acquired in the business
combination or gain from a bargain purchase; and determines what information to
disclose to enable users of the financial statements to evaluate the nature and
financial effects of the business combination. SFAS No. 141(R) applies
prospectively to business combinations for which the acquisition date is on or
after the beginning of the first annual reporting period beginning on or after
December 15, 2008. Currently, the Company does not anticipate that this
statement will have a significant impact on its consolidated financial
statements.








NOTE
3 – BALANCE SHEET DETAILS





The
following tables provide details of selected balance sheet items:





December
      31,
            December
      31,2008
            2007Accrued
      LiabilitiesAccrued
      payroll and related taxes
            
            $       459,528
            $        327,028Credit
      cards payable
            
            -
            1,452Accrued
      interest
            
            239,788
            336,673Others
            
            26,346
            2,745Total
      accrued liabilities
            
            $       725,662
            $        667,898








NOTE 4 –
CONVERTIBLE NOTES PAYABLE AND DERIVATIVE LIABILITIES





Sale of $17,500 Convertible
Debentures





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





Proceeds
of the 2008 Second Debentures were held in escrow as of December 31, 2008 and
were released in March 2009.








F-9





NOTE 4 –
CONVERTIBLE NOTES PAYABLE AND DERIVATIVE LIABILITIES (CONTINUED)





Sale of $100,000 Convertible
Debentures





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




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




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





Sale of $175,000 Convertible
Debentures





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




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




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

























F-10
























NOTE 4 –
CONVERTIBLE NOTES PAYABLE AND DERIVATIVE LIABILITIES (CONTINUED)





Sale of $2,000,000
Convertible Debentures





On
January 30, 2006, the Company completed the sale of $2 million aggregate
principal amount of 8% callable secured convertible notes (the “2005
Debentures”) due three years from date of receipt, and issued stock warrants
purchasing up to 2.5 million shares of the Company’s common stock (the “2005
Debenture Warrants”).  Proceeds from the notes amounted to $1,903,500
after issuance costs, of which the first traunch of $300,000 (less issuance
costs of $55,000 and $20,000 for prepaid officers’ life insurance) was received
on November 30, 2005, the second traunch of $500,000 (less issuance costs of
$6,000) was received on January 5, 2006, and the third and final traunch of
$1,200,000 (less issuance costs of $15,500) was received on January 30, 2006.
During the years ended December 31, 2008 and 2007, the Company has converted
$17,351 and $25,532 principal amount into 84,987,030 shares and 9,220,694 shares
of the Company’s common stock at the request of the note holders,
respectively.





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





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





On
January 31, 2008, related accrued interest of $288,174 was converted into
principal. The converted principal carries interest at 2% per annum and matures
on January 31, 2011.





As of
December 31, 2008, the Company was in default of the first traunch of debt;
accordingly, the Company added a penalty of $62,326 to the principal. Interest
is being accrued at the default rate of 15% per annum. Subsequent to December
31, 2008, the Company was also in default of the second and final traunch of
debt.





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





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




11/30/05
              Traunch
            1/4/06
              Traunch
            1/30/06
              Traunch
            11/16/07
              Traunch
            1/31/08
              Traunch
            4/22/08
              Traunch
            9/26/08
      Traunch
            12/1/08
      Default PenaltyApproximate
      risk free rate
            4.41%
            4.28%
            4.47%
            3.30%
            2.27%
            2.43%
            2.38%
            0.81%Average
      expected life
            3
      years
            3
      years
            3
      years
            3
      years
            3
      years
            3
      years
            3
      years
            1
      yearDividend
      yield
            0%
            0%
            0%
            0%
            0%
            0%
            0%
            0%Volatility
            356.33%
            348.92%
            342.77%
            286.90%
            289.55%
            325.91%
            355.73%
            411.17%Estimated
      fair value of conversion feature
            $599,200
            $998,346
            $2,395,289
            $346,997
            $571,604
            $249,283
            $43,695
            $121,197Charged
      to debt discount
            $300,000
            $500,000
            $1,200,000
            $175,000
            $288,174
            $100,000
            $17,500
            $0Charged
      to expenses
            $299,200
            $498,346
            $1,195,289
            $171,997
            $283,434
            $149,283
            $26,195
            $121,197








F-11





NOTE 4 –
CONVERTIBLE NOTES PAYABLE AND DERIVATIVE LIABILITIES (CONTINUED)





The
Company recorded the fair value of the conversion feature as a discount to the
convertible debt in the accompanying balance sheet up to the proceeds received
from each traunch, with any excess charged to expense. Amortization expense
related to the conversion feature discount for the years ended December 31, 2008
and 2007 was $1,166,755 and $497,688, respectively.





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





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





In
accordance with the EITF 00-19, the conversion feature of each convertible
debenture and the stock warrants issued in conjunction with convertible
debentures have been included as long-term liabilities and were originally
valued at fair value at the date of issuance. As a liability, the convertible
features and the stock warrants are revalued each period until and unless the
debt is converted. As of December 31, 2008 and December 31, 2007, the fair
values of the conversion feature and the stock warrants aggregated to $5,245,580
and $3,909,035, respectively.  The Company recorded a loss of $253,893
for the year ended December 31, 2008, and a gain of $366,415 for the year ended
December 31, 2007. 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
5 – INCOME TAX





Provision
of income tax consists of a minimum state franchise tax of $2,400 for each of
the year ended December 31, 2008 and 2007, respectively.





As of
December 31, 2008, the Company has net operating loss carryforwards,
approximately of $4.3 million and $4.4 million to reduce future federal and
state taxable income, respectively. To the extent not utilized, the
carryforwards will begin to expire through 2028 for federal tax purposes
and through 2018 for state tax purposes. The Company’s ability to utilize its
net operating loss carryforwards is uncertain and thus a valuation reserve has
been provided against the Company’s net deferred tax assets.





The deferred tax assets as
of December 31, 2008 and 2007 consist of the following:





For
      Years ended December 31,2008
            
            2007Tax
      benefit on net operating loss carryforwards
            
            $     1,843,434
            
            $     1,411,828Temporary
      difference in other accruals
            
            240,921
            
            171,868Temporary
      difference in depreciation and amortization
            
            -
            
            118,692Others
            
            268,996
            
            596,860Less:
      valuation allowance
            
            (2,353,351)
            
            (2,299,248)Net
      deferred tax assets
            
            $                  -
            
            $                  -








F-12








NOTE
6 – NET LOSS PER SHARE





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





For
      years endedDecember
      31,2008
            2007Numerator:Net
      loss from continuing operations
            
            $   (2,741,365)
            $(1,076,878)Net
      loss from discontinued operations
            
            $      (280,653)
            $   (681,900)Net
      loss
            
            $   (3,022,018)
            $(1,758,778)Denominator:Weighted
      average number of shares outstanding
            
            45,627,249
            10,528,987Net
      loss per share from continuing operations-basic and
diluted
            
            $            (0.06)
            $         (0.10)Net
      loss per share from discontinued operations-basic and
    diluted
            
            $            (0.01)
            $         (0.06)Net
      loss per share-basic and diluted
            
            $            (0.07)
            $         (0.17)








In
accordance with SFAS No. 128, “Earnings Per Share”,the
Company also has excluded from the calculation of diluted net loss per share
approximately 5,438 shares relating to its 10% related party convertible debt
that are anti-dilutive.  As of December 31, 2008, depending on the
stock price on the conversion date, up to maximum of 57,184,333,333 shares,
subject to certain adjustments, may be issued upon conversion of the 8% Callable
Secured Convertible Notes. For additional information, see “Note 4 – Convertible
Notes Payable and Derivative Liabilities.”  Stock warrants to purchase
approximately 27,500,000 shares were outstanding, but were not included in the
computation of diluted net loss per share because the exercise price of the
stock warrants were greater than the average share price of the common stocks,
and, therefore, the effect would have been antidilutive.





As the
Company incurred net losses for the year ended December 31, 2007, potential
dilutive securities from stock warrants totalling 750,000 equivalent shares 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 3,973 shares relating to its 10% related party convertible debt
that are anti-dilutive.  As of December 31, 2007, depending on the
stock price on the conversion date, up to maximum of 800,051,333 shares, subject
to certain adjustments, may be issued upon conversion of the 8% Callable Secured
Convertible Notes. For additional information, see “Note 8 – Convertible Notes
Payable and Derivative Liabilities.”  Stock warrants to purchase
approximately 2,500,000 shares were outstanding, but were not included in the
computation of diluted net loss per share because the exercise price of the
stock warrants were greater than the average share price of the common stocks,
and, therefore, the effect would have been antidilutive























F-13





























NOTE
7 – DISCONTINUED OPERATIONS





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





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





Following
is summarized financial information for the discontinued
operations:





For
      Years ended December 31,2008
            2007Revenues:Customized
      Automobile
            $1,330,390
            $2,228,809Customized
      Motorcycle
            $              -
            $     15,472Total
      Revenues:
            $1,330,390
            $2,244,281Net
      operating loss from discontinued operations:Customized
      Automobile
            $(194,369)
            $(472,904)Customized
      Motorcycle
            $  (39,738)
            $(190,252)Net
      operating loss from discontinued operations
            $(234,107)
            $(663,156)Loss
      on disposal of assets:Customized
      Automobile
            $  (40,158)
            $    (1,703)Customized
      Motorcycle
            $    (6,388)
            $  (17,041)Total
      loss on disposal of assets
            $  (46,546)
            $  (18,744)Net
      Loss from Discontinued Operations
            $(280,653)
            $(681,900)(Net
      of tax of $0 for 2008 and 2007)December
      31, 2008
            December
      31, 2007NET
      LIABILITIES OF DISCONTINUED OPERATIONS:Current
      AssetsCash
            $         (24)
            $           (24)Inventory
            25,422
            50,922Net
      other assets
            1,650
            13,304Current
      liabilitiesAccounts
      payable
            (22,055)
            (22,055)Accrued
      liabilities
            (56,247)
            (51,755)Other
      liabilities
            (980)
            (980)Net
      assets (liabilities) of discontinued operations
            $  (52,234)
            $     (10,588)

















F-14





NOTE
7 – DISCONTINUED OPERATIONS (CONTINUED)





December
      31, 2008
            December
      31, 2007NET
      ASSETS (LIABILITIES) IN LIQUIDATION:Current
      AssetsCash
      in Trustee
            $      70,458
            $               -Cash
            -
            5,851Accounts
      receivable, net
            -
            13,953Inventory
            -
            37,057Net
      other assets
            39
            166,803Current
      liabilitiesAccounts
      payable
            (134,869)
            (136,003)Accrued
      liabilities
            (264,671)
            (213,080)Debt
      (a)
            (94,695)
            (116,974)Net
      assets (liabilities) in liquidation
            $  (423,738)
            $  (242,393)(a)
      Net of intercompany payable to parent of $1,424,207 and $1,371,025 as of
      December 31, 2008 andDecember
      31, 2007, respectively.For
      years ended December 31,2008
            2007Net
      cash used by operating activities of discontinued
    operations
            $  (35,383)
            $
      (86,202)Net
      cash used by investing activities of discontinued
    operations
            -
            (3,775)Net
      cash used by financing activities of discontinued
    operations
            (22,279)
            (22,725)NET
      CASH USED BY DISCONTINUED OPERATIONS
            $  (57,662)
            $(112,702)





NOTE
8 – 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 December 31,
2008.

















F-15

















NOTE
9 – LEGAL PROCEEDINGS





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





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





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





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





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





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





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














F-16














NOTE
10 – RELATED PARTY TRANSACTIONS





The
Company has short-term notes payable to an officer and a related party,
aggregate of $253,648 including related accrued interest of $58,415 as of
December 31, 2008. The notes carry interest at range of 8% to 10% per annum and
are unsecured. On July 2, 2008, the Company, the officer and the related party
agreed to extend the note to December 31, 2008 and to increase the principal by
$20,000 as a cost of extension.  A 10% penalty will be added annually
until the note is paid in full. In addition, the Company granted a conversion
right to the officer allowing him to convert all or any outstanding balance into
the Company’s common stocks at 75% of the average of the lowest three closing
prices during the ten days prior to the date the conversion notice. As a result,
the Company recorded a conversion expense of $115,399 using the Black-Scholes
valuation model:





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





NOTE
11 – CHANGE OF OFFICERS





On
February 27, 2008 the Chief Financial Officer (“CFO”), Jay Isco, resigned as CFO
and Secretary of the Company.  George Lefevre, the Company’s Chief
Executive Officer (“CEO”), will effective immediately the vacant positions of
CFO and secretary.





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





NOTE
13 – COMMITMENTS AND CONTINGENCIES





Lease
Commitments





TrixMotive
has a non-cancelable operating lease that expires through August 2009. As of
December 31, 2008, TrixMotive has accrued the remaining lease obligations,
amounted to $136,000.





Officer
Indemnification





Under the
Company's organizational documents, the Company's officers, employees and
directors are indemnified against certain liability arising out of the
performance of their duties. The Company's maximum exposure under these
arrangements is unknown as this would involve future claims that may be made
against the Company that have not yet occurred. The Company does not carry
Director and Officers insurance policy. However, based on experience, the
Company expects any risk of loss to be remote.





See Notes
to Consolidated Financial
Statements                                                                                                                                          
F-17


ITEM
      9.
            CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE.





None








ITEM
9A(T).                                CONTROLS
AND PROCEDURES.








Evaluation
of Disclosure Controls and Procedures





We
conducted an evaluation, with the participation of our Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the design and operation of
our disclosure controls and procedures, as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange
Act, as of the end of the period covered by this Annual Report on Form 10-K, to
ensure that information required to be disclosed by us in the reports filed or
submitted by us under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Securities Exchange
Commission’s rules and forms, including to ensure that information required to
be disclosed by us in the reports filed or submitted by us under the Exchange
Act is accumulated and communicated to our management, including our principal
executive and principal financial officers, or persons performing similar
functions, as appropriate to allow timely decisions regarding required
disclosure.  Based on that evaluation, our Chief Executive
Officer/Chief Financial Officer have concluded that as of December 31, 2008, our
disclosure controls and procedures were not effective at the reasonable
assurance level due to the material weaknesses described below.





A
material weakness is a control deficiency (within the meaning of the Public
Company Accounting Oversight Board (PCAOB) Auditing Standard No. 2) or
combination of control deficiencies, which result in more than a remote
likelihood that a material misstatement of the annual or interim financial
statements will not be prevented or detected.  Management has
identified the following two material weaknesses which have caused management to
conclude that, as of December 31, 2008, our disclosure controls and procedures
were not effective at the reasonable assurance level:








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








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








Remediation
of Material Weaknesses





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








17


Changes
in Internal Control over Financial Reporting





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








ITEM
9B.                                OTHER
INFORMATION.





None





PART
III





ITEM
      10
            DIRECTORS,
      EXECUTIVE OFFICERS, AND CORPORATE
GOVERNANCE





The
following table sets forth the names and positions of the executive officers and
directors of the Company.  Directors will be elected at our annual
meeting of stockholders and serve for one year or until their successors are
elected and qualify.  Officers are elected by the Board and their
terms of office are, except to the extent governed by employment contract, at
the discretion of the Board.





Name
            Age
            Positions
      and Offices heldMartyn
      Powell (1)
            56
            President,
      DirectorRobert
      O’Brien (1)
            73
            §Secretary,
      Treasurer, DirectorDale
      Lavigne (1)
            78
            DirectorDennis
      O’Brien (1)
            47
            DirectorJames
      Etter (1)
            78
            DirectorJohn
      Ohle (2)
            51
            President,
      Interim Chief Financial OfficerArthur
      Lefevre (3)
      (5)
            71
            DirectorMark
      Absher (3)(12)
            47
            DirectorVincent
      Michael Keyes III (3)(5)
            52
            DirectorThomas
      Prewitt (4) (8)
            53
            PresidentRichard
      Perez (4)
      (8)
            50
            SecretaryJay
      Isco  (4)
      (7)(11)
            28
            Chief
      Financial Officer, SecretaryRichard
      Holt (6)(10)
            68
            DirectorDavid
      Psachie (7)
            69
            DirectorGeorge
      R. Lefevre (8)(11)
            41
            Chief
      Executive Officer, President, CFO, SecretaryLeslie
      McPhail (9)(13)
            36
            Chief
      Operating Officer





18


(1)
            In
      connection with Aberdeen Mining Company acquiring C&M Transportation,
      Inc. the officers and directors resigned on March 8,
  2004.


(2)
            As
      part of the acquisition agreement of C&M Transportation, Inc. Mr. Ohle
      was appointed the President and interim Chief Financial
      Officer.  Once the C&M Transportation, Inc. agreement was
      rescinded, Mr. Ohle was removed from his
  positions.


(3)
            Upon
      consummation of the acquisition with C&M Transportation, Mr. Lefevre,
      Mr. Absher, and Mr. Keyes were appointed to fill the board of
      directors.


(4)
            On
      May 11, 2004, the Company acquired Damon’s Motorcycle Creations, Inc. and
      the Board elected Mr. Prewitt to serve as the President, Mr. Perez to
      serve as the Secretary, and Mr. Isco to serve as the Interim Chief
      Financial Officer.


(5)
            On
      September 25, 2004, Mr. Lefevre and Vincent Michael Keyes resigned
      as  Directors from the Board of
  Directors


(6)
            On
      October 6, 2004, the Board of Directors elected Richard Holt to serve as a
      Director.


(7)
            On
      February 11, 2005, the Board of Directors elected Mr. Psachie to serve as
      a Director


(8)
            On
      February 15, 2005, the Board of Directors approved the removal of Mr.
      Prewitt and Mr. Perez as the President and Secretary
      respectively.  George R. Lefevre was appointed to the position
      of Chief Executive Officer and President.  Mr. Isco was elected
      to the position of Chief Financial Officer and
  Secretary.


(9)
            On
      February 15, 2005, the Board of Directors elected Ms. McPhail to the
      position of Chief Operating
Officer.


(10)
            On
      October 2, 2006, Richard Holt resigned as director of the
      company


(11)
            On
      February 27, 2008 Jay Isco resigned as CFO and Secretary of the company,
      and George Lefevre was elected to the vacated positions of CFO and
      Secretary.


(12)
            On
      April 25, 2008 Mark Absher resigned as director of the
      company.


(13)
            On
      June 23, 2008 Leslie McPhail resigned as COO of the
  company





Duties,
Responsibilities and Experience





George R.
Lefevre, Chief Executive Officer, Chief Financial Officer, Secretary and
Director





As CEO of
MotivNation, Mr. Lefevre is responsible for the oversight, and management of the
company’s direction of business affairs.





From 2004
to 2008, Mr. Lefevre has served as a Director, Chief Financial Officer and
Secretary for EntreMetrix, Inc. From 2000 to 2008, George R. Lefevre was a
Managing Partner of NeoTactix, a company focused on mergers, acquisitions and
structural guidance for small public companies. From 1998 to 2000, Mr. Lefevre
assisted in the formation and funding of PTM Molecular Biosystems. He was the
Chief of Finance and key officer for strategic business ventures. Mr. Lefevre
has invested in and managed portfolios of securities since 1991. He received a
B.S. in Business Administration Finance from California State University, Long
Beach.





David
Psachie, Director





Since
2005, Mr. Psachie has served as a director of MotivNation, Inc. In 1974, Mr.
Psachie formed Martin Aircraft Sales at Orange County Airport, selling servicing
and training in Lear, Citation and Piper aircraft. Martin Aviation was sold in
1982 and Mr. Psachie returned to the management of auto dealerships while
continuing to invest in other entities. Mr. Psachie owned Psachie Racing,
becoming United States Auto Club Champion in 1981 and 1982, holding numerous
championship titles internationally. David formed Coast Realty and Construction
in Long Beach, California 1995 - present. Acting as Broker/Owner he built and
sold investment properties. Mr. Psachie currently is the General Manager of
Sales and Internet Director of Sales for several Auto dealerships and continues
to manage these dealerships in Southern California. David Psachie attended Long
Beach City and State College for his continuing degree 1965. After completing
additional education in business administration at UCLA.




19




Election
of Directors and Officers.





Directors
are elected to serve until the next annual meeting of stockholders and until
their successors have been elected and qualified. Officers are appointed to
serve until the meeting of the Board of Directors following the next annual
meeting of stockholders and until their successors have been elected and
qualified.





No
Executive Officer or Director of the Corporation has been the subject of any
Order, Judgment, or Decree of any Court of competent jurisdiction, or any
regulatory agency permanently or temporarily enjoining, barring suspending or
otherwise limiting him from acting as an investment advisor, underwriter, broker
or dealer in the securities industry, or as an affiliated person, director or
employee of an investment company, bank, savings and loan association, or
insurance company or from engaging in or continuing any conduct or practice in
connection with any such activity or in connection with the purchase or sale of
any securities.





No
Executive Officer or Director of the Corporation has been convicted in any
criminal proceeding (excluding traffic violations) or is the subject of a
criminal proceeding which is currently pending.





No
Executive Officer or Director of the Corporation is the subject of any pending
legal proceedings.





Section
16(a) Beneficial Ownership Reporting Compliance





Section
16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
requires our executive officers and directors, and persons who beneficially own
more than ten percent of our common stock, to file initial reports of ownership
and reports of changes in ownership with the SEC. Executive officers, directors
and greater than ten percent beneficial owners are required by SEC regulations
to furnish us with copies of all Section 16(a) forms they file. Based upon a
review of the copies of such forms furnished to us and written representations
from our executive officers and directors, we believe that during the year ended
2008, all officers and directors  filed all forms 3, forms 4 and forms
5.





Audit
Committee and Financial Expert





We do not
have an Audit Committee, our board of directors during 2008, performed some of
the same functions of an Audit Committee, such as: recommending a firm of
independent certified public accountants to audit the annual financial
statements; reviewing the independent auditors independence, the financial
statements and their audit report; and reviewing management's administration of
the system of internal accounting controls. The Company does not currently have
a written audit committee charter or similar document.





We have
no financial expert. We believe the cost related to retaining a financial expert
at this time is prohibitive. Further, because of our start-up operations, we
believe the services of a financial expert are not warranted.








20





Code
of Ethics





A code of
ethics relates to written standards that are reasonably designed to deter
wrongdoing and to promote:





(1)
            Honest
      and ethical conduct, including the ethical handling of actual or apparent
      conflicts of interest between personal and professional
      relationships;


(2)
            Full,
      fair, accurate, timely and understandable disclosure in reports and
      documents that are filed with, or submitted to, the Commission and in
      other public communications made by an
issuer;


(3)
            Compliance
      with applicable governmental laws, rules and
  regulations;


(4)
            The
      prompt internal reporting of violations of the code to an appropriate
      person or persons identified in the code;
and


(5)
            Accountability
      for adherence to the code.





We have
adopted a corporate code of ethics that applies to our principal executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions.  MotivNation will
provide, without charge, a copy of the Code of Ethics on the written request of
any person addressed to MotivNation at:  8 Corporate Park, Suite 300,
Irvine, CA 92606.





Nominating
Committee





We do not have a Nominating Committee
or Nominating Committee Charter. Our board of directors in 2008, performed some
of the functions associated with a Nominating Committee. We have elected not to
have a Nominating Committee in that we are a development stage company with
limited operations and resources.





Limitation
of Liability of Directors





Pursuant to the Nevada General
Corporation Law, our Articles of Incorporation exclude personal liability for
our Directors for monetary damages based upon any violation of their fiduciary
duties as Directors, except as to liability for any breach of the duty of
loyalty, acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, or any transaction from which a
Director receives an improper personal benefit.  This exclusion of
liability does not limit any right which a Director may have to be indemnified
and does not affect any Director’s liability under federal or applicable state
securities laws.  We have agreed to indemnify our directors against
expenses, judgments, and amounts paid in settlement in connection with any claim
against a Director if he acted in good faith and in a manner he believed to be
in our best interest.

















21











ITEM
11.                                EXECUTIVE
COMPENSATION.





The
following table sets forth the cash compensation of our executive officer and
director during the last three fiscal years. The remuneration described in the
table does not include the cost to us of benefits furnished to the named
executive officers, including premiums for health insurance and other benefits
provided to such individual that are extended in connection with the conduct of
our business.





Summary
Compensation Table


Annual Compensation
            Long Term CompensationName
      and Principal Position
            Year
            Salary
      (3)
            Bonus
            Other
      Annual Compensation
            Restricted
      Stock
              (4)
            Options
            LTIP
      Payouts
            All
      Other CompensationGeorge
      R. Lefevre - CEO & Director (1) (2) (3)
            2008
            $150,0002007
            $150,0002006
            $150,000Jay
      Isco- Former CFO & Secretary (1)
            2008
            $12,5002007
            $75,0002006
            $75,000Leslie
      McPhail- Former Chief Operating Officer
            2008
            $43,6802007
            $84,2402006
            $86,240Mark
      Absher – Former Director (1) (2) (3)
            200820072006
            $12,000David
      Psachie- Director (1) (2) (3)
            200820072006
            $12,000Richard
      Holt- Former Director (1) (2) (3)
            200820072006
            $9,000





(1)
            Amounts
      noted are actual cash amounts paid and accrued salaries combined in their
      respective year.  The following are the portions of accrued
      salaries:


a.
            George
      R. Lefevre


i.
            2008-
      $150,000 in accrued salary


ii.
            2007-
      $150,000 in accrued salary


iii.
            2006-
      $62,500 in accrued salary


b.
            Jay
      Isco


i.
            2008-
      $12,500 in accrued salary


ii.
            2007-
      $57,500 in accrued salary


iii.
            2006-
      $23,666.64 in accrued salary


c.
            Mark
      Absher


i.
            2006-
      $12,000 in accrued salary


d.
            David
      Psachie


i.
            2006-
      $12,000 in accrued salary


e.
            Richard
      Holt


i.
            2006-
      $9,000 in accrued salary


(2)
            The
      dollar value of the restricted shares is calculated by multiplying the
      closing market price of our unrestricted stock on the date of issuance as
      required in instructions to Item
  402(b)(2)(iv)(A).


(3)
            Mark
      Absher, David Psachie, Richard Holt each received 50,000 (post split)
      shares at a price of $1.10 (post split), the close price of the stock on
      February 15, 2005.






22





Employment
agreements





On July
31, 2006 the Company entered into a five year employment agreement with George
R. Lefevre its CEO. Effective January 1, 2006, MotivNation agreed to a monthly
salary of $12,500 per month with annual increases equaling 10% of the base
salary. In addition he is eligible for a quarterly bonus of 20,000 based on the
Company achieving a net profit for that quarter





On July
31, 2006 the Company entered into a five year employment agreement with Jay Isco
its CFO. Effective January 1, 2006, MotivNation agreed to a monthly salary of
$6,250 per month with annual increases equaling 10% of the base salary. In
addition he is eligible for a quarterly bonus of 10,000 based on the Company
achieving a net profit for that quarter. As of February 2008 Mr. Isco has
resigned.





As of
December 31, 2008, we have employment agreement with George Lefevre, and do not
have any agreements in place for the amount of annual compensation that our
other officers, directors and employees will receive in the future.





Compensation
Committee





We
currently do not have a compensation committee of the board of directors.
However, the board of directors intends to establish a compensation committee,
which is expected to consist of three inside directors and two independent
members.  Until a formal committee is established our entire board of
directors will review all forms of compensation provided to our executive
officers, directors, consultants and employees including stock compensation and
loans.





F-24
 23
 24





ITEM
      12.
            SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS.





As of the
close of business on December 31, 2008, based on information available to the
Company:





Name
      of Officer, Director and Beneficial Owner
            
            Number
              of
      Shares
            
            Percent
              Beneficially
              Owned*1.Thomas
      Prewitt- Former President (2)(3)
              2.547
      Apollo Unit C
              3.Brea,
      CA 92821
            
            748,799
            
            0.704%Jay
      Isco- Former Chief Financial Officer, Secretary(3)(7)
              4.18101
      Von Karman Ave. Ste. 330
              5.Irvine,
      CA 92612
            
            817,000
            
            0.769%6.Richard
      Perez Former Secretary (2)(3)
              7.1741
      E. Lambert Road
              8.La
      Habra, CA 90631
            
            748,799
            
            0.704%9.George
      R. Lefevre- Chief Executive Officer, Chief Financial Officer, Secretary,
      and Director (3)(6)(7)
              10.18101
      Von Karman Ave. Ste. 330
              Irvine,
      CA 92612
            
            683,000
            
            0.643%11.Scott
      Absher- Beneficial Owner (4)
              12.18101
      Von Karman Ave. Ste. 330
              Irvine,
      CA 92612
            
            248,000
            
            0.233%Leslie
      McPhail-Former Chief Operating Officer(1)(3)(9)
              14948
      Shoemaker Avenue
              Santa
      Fe Springs, CA 90670
            
            640,000
            
            0.602%David
      McPhail- Beneficial Owner(1)
              14948
      Shoemaker Avenue
              Santa
      Fe Springs, CA 90670
            
            640,000
            
            0.602%Mark
      Absher- Former Director (8)
              13.18101
      Von Karman Ave. Ste. 330
              Irvine,
      CA 92612
            
            50,000
            
            0.0471%David
      Psachie- Director
              14.18101
      Von Karman Ave. Ste. 330
              Irvine,
      CA 92612
            
            50,000
            
            0.0471%Richard
      Holt- Former Director (5)
              15.18101
      Von Karman Ave. Ste. 330
              Irvine,
      CA 92612
            
            50,000
            
            0.0471%All
      Directors, Officers, & Beneficial Holders as a Group
            
            3,286,799
            
            3.09%





1.
            Leslie
      McPhail owns jointly with David McPhail 740,000 (post-split) shares of the
      Company.


2.
            Thomas
      Prewitt and Richard Perez own jointly 748,799 (post-split) shares of the
      Company.


3.
            On
      February 15, 2005, the Board of Directors approved the removal of Mr.
      Prewitt and Mr. Perez as the President and Secretary
      respectively.  George R. Lefevre was appointed to the position
      of Chief Executive Officer and President.  Mr. Isco was elected
      to the position of Chief Financial Officer and Secretary, and Mrs. McPhail
      to the position of Chief Operating
Officer.


4.
            Scott
      Absher served as a consultant for the company and is the brother of Mark
      Absher a former director of the
company.


5.
            On
      October 2, 2006, Richard Holt resigned as director of the
      company


6.
            On
      January 6, 2006, George Lefevre was elected as Chairman of the board of
      directors.


7.
            On
      February 27, 2008 Jay Isco resigned as CFO and Secretary of the Company,
      on the same day George Lefevre was elected to the vacated positions by the
      board of directors of Motivnation.


8.
            On
      May 1, 2008 Mark Absher resigned as director of the
  company


9.
            On
      June 23, 2008 Leslie A. McPhail resigned as COO of the
    company





*
            Number
      of shares and percent of ownership based upon 106,253,188 shares
      outstanding on December 31, 2008








ITEM
      13.
            CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE








There
have been no transactions, or proposed transactions, which have materially
affected or will materially affect us in which any director, executive officer
or beneficial holder of more than 5% of the outstanding common stock, or any of
their respective relatives, spouses, associates or affiliates, has had or will
have any direct or material indirect interest. We have no policy regarding
entering into transactions with affiliated parties.







F-25
 25


ITEM
14.                                PRINCIPAL
ACCOUNTANT FEES AND SERVICES.





(1) AUDIT
FEES





The
aggregate fees billed for the fiscal year ended December 31, 2008, for
professional services rendered by Spector & Wong LLP, for the audit of the
registrant's annual financial statements and review of the financial statements
included in the registrant's Form 10-Q and 10-K or services that are normally
provided by the accountant in connection with statutory and regulatory filings
or engagements for fiscal year 2008 and 2007 were approximately $41,500 and
$56,000, respectively.





(2)
AUDIT-RELATED FEES





The
aggregate fees billed for the fiscal year ended December 31, 2008, for assurance
and related services by Spector & Wong LLP, that are reasonably related to
the performance of the audit or review of the registrant's financial statements
for fiscal year 2008 were $0 and $0 for 2007.





(3) TAX
FEES





The
aggregate fees billed for each of the fiscal years ended December 31, 2008 and
2007, for professional services rendered by Spector & Wong LLP, for tax
compliance, tax advice, and tax planning, for those fiscal years were $2,500 and
$2,500 respectively. Services provided included preparation of Federal Income
Tax Returns Form 1120, tax planning, and research regarding 1031
exchange.





(4) ALL
OTHER FEES





There
were no other aggregate fees billed in each of the fiscal years ended December
31, 2008 and 2007, for products and services provided by Spector & Wong LLP,
other than those services reported above, for those fiscal years.





(5) AUDIT
COMMITTEE POLICIES AND PROCEDURES





Not Applicable.





(6) If
greater than 50 percent, disclose the percentage of hours expended on the
principal accountant's engagement to audit the registrant's financial statements
for the most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent
employees.





Not Applicable.














F-26
 26








ITEM
15.                                EXHIBITS
& FINANCIAL STATEMENT SCHEDULES





(a)           Exhibits





Exhibit
            DescriptionNumber3(i)
            Articles
      of Incorporation**3(ii)
            ByLaws**23.1
            Consent
      of Spector & Wong LLP,
      the Company’s Independent Public Accountants31.1
            Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to Section
      302 of the Sarbanes-Oxley Act of 200232
            Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to 18
      U.S.C. section 1350, as adopted pursuant to section 906 of the
      Sarbanes-Oxley act of 2002.


_____


* Filed
herewith


**
Incorporated herein by reference from the Company’s Form 10-SB filed with the
Commission on 10-24-2002








F-27
 27


SIGNATURES





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








/s/ George R. Lefevre


By:


George R. Lefevre


CEO





Dated:





Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.





NAME                                                                                                Title                         DATE





/s/
George R. Lefevre


________________________


George R.
Lefevre                                                                CEO,
CFO, Secretary, and
Director               
April 13, 2009






/s/ David
Psachie


________________________


David
Psachie                                                                    
 Director                               April 13, 2009




















28