UNITED
STATES





SECURITIES
AND EXCHANGE COMMISSION





WASHINGTON,
D.C. 20549











Form
10-Q





x
            QUARTERLY
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE
      ACT OF 1934





For the
quarterly period ended September 30, 2008





 ̈
            TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE
      ACT OF 1934





For the
transition period from  _____________ to _____________




Commission
file number 000-25385





POWER
SPORTS FACTORY, INC..





(Exact
Name of Registrant as Specified in Its charter)





Minnesota
              41-1853993(State
      or Other Jurisdiction of
              (I.R.S.
      Employer Identification No.)Incorporation
      or Organization)





6950 Central Highway, Pennsauken,
      NJ
              
              08109(Address
      of principal executive offices)
              
              (Zip
      Code)




(856-488-9333)(Registrant's
      Telephone Number, Including Area
Code)





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





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a smaller reporting company.  (Check
One):




Large accelerated
      filer ̈
                Accelerated
      filer   ̈Non-accelerated
      filer  ̈
                Smaller reporting companyx


(Do not
check if a smaller reporting company)




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).   ̈Yes   x No




The
number of shares outstanding the issuer's common stock, no par value, was
30,750,188 as of December 18, 2008










Table of
Contents





PART
      I
                FINANCIAL
      INFORMATIONItem
      1.
                Financial
      Statements
                1Item
      2.
                Management's
      Discussion and Analysis or Plan of Operation
                20Item
      3.
                Quantitative
      and Qualitative Disclosures About Market Risk
                23Item
      4T.
                Controls
      and Procedures
                23PART
      IIItem
      5.
                Other
      Information
                24Item
      6.
                Exhibits
                24EXHIBIT
      INDEX
                24









Item
1.  Financial Statements





Power
Sports Factory, Inc.





I N D E
X





Page
      No.Consolidated
      Balance Sheets as at September 30, 2008 and December 31, 2007
      (Unaudited)
                      2Consolidated
      Statements of Operations For the Nine and Three Months
    EndedSeptember
      30, 2008 and 2007 (Unaudited)
                      3Consolidated
      Statements of Stockholders' Equity (Deficiency)For
      the Year Ended December 31, 2007 and the Nine Months Ended September 30,
      2008 (Unaudited)
                      4Consolidated
      Statements of Cash Flows For the Nine Months EndedSeptember
      30, 2008 and 2007 (Unaudited)
                      5-6Notes
      to Unaudited Consolidated Financial Statements
                      7


1


POWER
SPORTS FACTORY, INC.
 BALANCE
SHEETS
 (Unaudited)
 
 September 30,2008
                                  
                                  
                                  December 31,2007ASSETSCurrent
      Assets:Cash
                                  
                                  $
                                  981
                                  
                                  
                                  $
                                  11,146Accounts
      receivable
                                  
                                  
                                  79,196
                                  
                                  
                                  
                                  3,959Inventory
                                  
                                  
                                  1,745,129
                                  
                                  
                                  
                                  937,702Prepaid
      expenses
                                  
                                  
                                  137,278
                                  
                                  
                                  
                                  135,320Total
      Current Assets
                                  
                                  
                                  1,962,584
                                  
                                  
                                  
                                  1,088,127Property
      and equipment-net
                                  
                                  
                                  27,864
                                  
                                  
                                  
                                  71,389Other
      assets
                                  
                                  
                                  9,876
                                  
                                  
                                  
                                  9,876TOTAL
      ASSETS
                                  
                                  $
                                  2,000,324
                                  
                                  
                                  $
                                  1,169,392LIABILITIES AND STOCKHOLDERS'
      EQUITYCurrent
      Liabilities:Accounts
      payable
                                  
                                  $
                                  3,254,261
                                  
                                  
                                  $
                                  1,096,769Accounts
      payable to related party
                                  
                                  
                                  19,112
                                  
                                  
                                  
                                  80,172Notes
      payable to related party
                                  
                                  
                                  23,363
                                  
                                  
                                  
                                  11,466Current
      portion of long-term debt
                                  
                                  
                                  322,953
                                  
                                  
                                  
                                  164,772Convertible
      debt
                                  
                                  
                                  326,107
                                  
                                  
                                  
                                  262,159Accrued
      expenses
                                  
                                  
                                  608,628
                                  
                                  
                                  
                                  192,804Dividends
      Payable
                                  
                                  
                                  673,176
                                  
                                  
                                  
                                  673,176Customer
      deposit payable
                                  
                                  
                                  65,482
                                  
                                  
                                  
                                  -Total
      Current Liabilities
                                  
                                  
                                  5,293,082
                                  
                                  
                                  
                                  2,481,318Long
      term liabilites:Long-term
      debt - less current portion
                                  
                                  
                                  8,197
                                  
                                  
                                  
                                  10,461Long-term
      convertible debt
                                  
                                  
                                  36,946
                                  
                                  
                                  
                                  24,143Total
      Long-Term Liabilities
                                  
                                  
                                  45,143
                                  
                                  
                                  
                                  34,604TOTAL
      LIABILITIES
                                  
                                  
                                  5,338,225
                                  
                                  
                                  
                                  2,515,922Stockholders'
      Deficiency:Preferred
      stock; no value - authorized 50,000,000 shares, Series B Convertible
      Preferred Stock - outstanding  -0- shares at September 30,
      2008 and 2,303,216 shares at December 31, 2007
                                  
                                  
                                  -
                                  
                                  
                                  
                                  2,687,450Common
      stock, no par value - authorized 100,000,000
      shares outstanding  30,750,188 shares at September 30,
      2008 and 4,925,213 shares at December 31, 2007
                                  
                                  
                                  7,940,183
                                  
                                  
                                  
                                  5,072,940Additional
      paid-in capital
                                  
                                  
                                  1,593,195
                                  
                                  
                                  
                                  1,162,195Deficit
                                  
                                  
                                  (12,871,279
                                  )
                                  
                                  
                                  (10,269,115
                                  )Total
      Stockholders' Deficiency
                                  
                                  
                                  (3,337,901
                                  )
                                  
                                  
                                  (1,346,530
                                  )TOTAL
      LIABILITIES AND STOCKHOLDERS' Deficiency
                                  
                                  $
                                  2,000,324
                                  
                                  
                                  $
                                  1,169,392
 
 See Notes
to Unaudited Consolidated Financial Statements
  2
 
 POWER
SPORTS FACTORY, INC.
 STATEMENTS
OF OPERATIONS
 (Unaudited)
 
 Nine Months Ended
                                    
                                    
                                    Three Months EndedSeptember 30,
                                    
                                    
                                    September 30,2008
                                    
                                    
                                    2007
                                    
                                    
                                    2008
                                    
                                    
                                    2007Net
      sales
                                    
                                    $
                                    2,081,750
                                    
                                    
                                    $
                                    2,140,543
                                    
                                    
                                    $
                                    671,616
                                    
                                    
                                    $
                                    461,657Costs
      and Expenses:Cost
      of sales
                                    
                                    
                                    1,650,120
                                    
                                    
                                    
                                    1,704,070
                                    
                                    
                                    
                                    658,601
                                    
                                    
                                    
                                    330,867Selling,
      general and administrative expenses
                                    
                                    
                                    2,921,994
                                    
                                    
                                    
                                    1,736,377
                                    
                                    
                                    
                                    809,198
                                    
                                    
                                    
                                    935,649Bad
      Debt Expense
                                    
                                    
                                    5,000
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    3,501
                                    
                                    
                                    
                                    -4,577,114
                                    
                                    
                                    
                                    3,440,447
                                    
                                    
                                    
                                    1,471,300
                                    
                                    
                                    
                                    1,266,516Loss
      from operations
                                    
                                    
                                    (2,495,364
                                    )
                                    
                                    
                                    (1,299,904
                                    )
                                    
                                    
                                    (799,684
                                    )
                                    
                                    
                                    (804,859
                                    )Other
      income and  expenses:Disposal
      of fixed asset
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (22,847
                                    )
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (22,847
                                    )Forgiveness
      of debt
                                    
                                    
                                    -
                                    
                                    
                                    
                                    3,580
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    3,580Interest
      expense
                                    
                                    
                                    (108,996
                                    )
                                    
                                    
                                    (56,289
                                    )
                                    
                                    
                                    (39,436
                                    )
                                    
                                    
                                    (11,641
                                    )Interest
      income
                                    
                                    
                                    2,196
                                    
                                    
                                    
                                    4,442
                                    
                                    
                                    
                                    1,394
                                    
                                    
                                    
                                    4,442Commissions
      Income
                                    
                                    
                                    -
                                    
                                    
                                    
                                    18,688
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    18,688(106,800
                                    )
                                    
                                    
                                    (52,426
                                    )
                                    
                                    
                                    (38,042
                                    )
                                    
                                    
                                    (7,778
                                    )Loss
      before benefit from income
      taxes
                                    
                                    
                                    (2,602,164
                                    )
                                    
                                    
                                    (1,352,330
                                    )
                                    
                                    
                                    (837,726
                                    )
                                    
                                    
                                    (812,637
                                    )Income
      tax benefit
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (128,032
                                    )
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Net  loss
                                    
                                    $
                                    (2,602,164
                                    )
                                    
                                    $
                                    (1,224,298
                                    )
                                    
                                    $
                                    (837,726
                                    )
                                    
                                    $
                                    (812,637
                                    )Loss
      per common share - basicand
      diluted
                                    
                                    $
                                    (0.11
                                    )
                                    
                                    $
                                    (0.25
                                    )
                                    
                                    $
                                    (0.03
                                    )
                                    
                                    $
                                    (0.16
                                    )Weighted
      average common shares -Basic
      and diluted
                                    
                                    
                                    22,906,529
                                    
                                    
                                    
                                    4,925,213
                                    
                                    
                                    
                                    28,839,513
                                    
                                    
                                    
                                    4,925,213
 
 See Notes
to Unaudited Consolidated Financial Statements
 
 3
 
 POWER
SPORTS FACTORY, INC.
 STATEMENTS
OF STOCKHOLDERS' DEFICIENCY
 (Unaudited)
 
 Common Stock
                                      
                                      
                                      Additional
                                      
                                      
                                      RetainedPreferred
                                      
                                      
                                      Stated
                                      
                                      
                                      
                                      
                                      
                                      Stated
                                      
                                      
                                      Paid-In
                                      
                                      
                                      EarningsStock
                                      
                                      
                                      Value
                                      
                                      
                                      Shares
                                      
                                      
                                      Value
                                      
                                      
                                      Capital
                                      
                                      
                                      (Deficit)
                                      
                                      
                                      TotalBalance
      at January 1, 2007
                                      
                                      
                                      1,650,000
                                      
                                      
                                      $
                                      27,500
                                      
                                      
                                      
                                      4,925,213
                                      
                                      
                                      $
                                      5,072,940
                                      
                                      
                                      $
                                      807,195
                                      
                                      
                                      $
                                      (7,521,066
                                      )
                                      
                                      $
                                      (1,613,431
                                      )Effect
      of reverse mergerConversion
      of debt for preferred stock
                                      
                                      
                                      240,716
                                      
                                      
                                      
                                      1,200,000
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      1,200,000Issuance
      of preferred stock for services
                                      
                                      
                                      265,900
                                      
                                      
                                      
                                      726,950
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      726,950Issuarnce
      of preferred stock for debt (valued at $5.00 per
      share)
                                      
                                      
                                      92,600
                                      
                                      
                                      
                                      463,000
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      463,000Contribution
      by shareholders
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      175,000
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      175,000Beneficial
      conversion feature
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      180,000
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      180,000Sale
      of preferred stock
                                      
                                      
                                      54,000
                                      
                                      
                                      
                                      270,000
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      270,000Net
      loss
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (2,748,049
                                      )
                                      
                                      
                                      (2,748,049
                                      )Balance
      at December 31, 2007
                                      
                                      
                                      2,303,216
                                      
                                      
                                      
                                      2,687,450
                                      
                                      
                                      
                                      4,925,213
                                      
                                      
                                      
                                      5,072,940
                                      
                                      
                                      
                                      1,162,195
                                      
                                      
                                      
                                      (10,269,115
                                      )
                                      
                                      
                                      (1,346,530
                                      )Issuance
      of preferred stock for services (valued at $2.50 to
      $7.00  per share)
                                      
                                      
                                      39,103
                                      
                                      
                                      
                                      63,543
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      63,543Issuance
      of 200,000 warrants
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      80,000
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      80,000Conversion
      of preferred stock into common stock
                                      
                                      
                                      (2,342,319
                                      )
                                      
                                      
                                      (2,750,993
                                      )
                                      
                                      
                                      23,423,190
                                      
                                      
                                      
                                      2,750,993
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -Issuance
      of common stock for debt (valued at $.08 per
      share)
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      1,262,500
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      101,000
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      101,000Issuance
      of common stock for services (valued at $.10 to $.70)
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      589,285
                                      
                                      
                                      
                                      116,250
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      116,250Conversion
      of debt for common stock (valued at $.08 to $.45)
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      550,000
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      250,000
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      250,000Net
      loss for the nine months ended  September
30,2008
                                      
                                      
                                      -
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      (2,602,164
                                      )
                                      
                                      
                                      (2,602,164
                                      )Balance
      at September 30,2008
                                      
                                      
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      
                                      30,750,188
                                      
                                      
                                      $
                                      7,940,183
                                      
                                      
                                      $
                                      1,593,195
                                      
                                      
                                      $
                                      (12,871,279
                                      )
                                      
                                      $
                                      (3,337,901
                                      )
 
 See Notes
to Unaudited Consolidated Financial Statements
 
 4
  POWER
SPORTS FACTORY, INC.
 STATEMENT
OF CASH FLOWS
 (Unaudited)
 
 For the Nine MonthsEnded September 30,2008
                                          
                                          
                                          2007CASH
      FLOW FROMOPERATING ACTIVITIES:Net  (loss)
                                          
                                          $
                                          (2,602,164
                                          )
                                          
                                          
                                          (1,224,298
                                          )Adjustments
      to reconcilenet
      loss  to net cashused
      in operating activities:Depreciation
      and amortization
                                          
                                          
                                          7,271
                                          
                                          
                                          
                                          4,268Non
      cash compensation
                                          
                                          
                                          179,793
                                          
                                          
                                          
                                          -Non
      -cash fair value of warrants
                                          
                                          
                                          80,000
                                          
                                          
                                          
                                          -Loss
      on abandonment of leasehold improvements
                                          
                                          
                                          -
                                          
                                          
                                          
                                          22,847Accretion
      of beneficial conversion feature
                                          
                                          
                                          76,752Changes
      in operating assetsand
      liabilities
                                          
                                          
                                          1,693,116
                                          
                                          
                                          
                                          1,787,197Net
      cash used in (provided from) operating activities
                                          
                                          
                                          (565,232
                                          )
                                          
                                          
                                          590,014CASH
      FLOW FROM INVESTING
      ACTIVITIES:Securiy
      deposit
                                          
                                          
                                          -
                                          
                                          
                                          
                                          4,000Purchase
      of equipment
                                          
                                          
                                          
                                          
                                          
                                          
                                          (3,000
                                          )Return
      of equipment
                                          
                                          
                                          36,254
                                          
                                          
                                          
                                          -Change
      in restricted cash
                                          
                                          
                                          -
                                          
                                          
                                          
                                          173,264Net
      cash used in investing
      activities
                                          
                                          
                                          36,254
                                          
                                          
                                          
                                          174,264CASH
      FLOW FROMFINANCING ACTIVITIES:Proceeds
      from notes payable related party
                                          
                                          
                                          22,247
                                          
                                          
                                          
                                          424,319Payment
      to note payable related party
                                          
                                          
                                          (25,350
                                          )
                                          
                                          
                                          (360,787
                                          )Proceeds
      from loan payable
                                          
                                          
                                          357,420
                                          
                                          
                                          
                                          237,437Payment
      on loan
                                          
                                          
                                          (85,504
                                          )
                                          
                                          
                                          (1,572,737
                                          )Contribution
      by shareholder
                                          
                                          
                                          -
                                          
                                          
                                          
                                          175,000Proceeds
      from sale of preferred stock
                                          
                                          
                                          -
                                          
                                          
                                          
                                          417,750Proceeds
      from issuance of convertible debt
                                          
                                          
                                          250,000
                                          
                                          
                                          
                                          -Net
      cash provided by (used in) financing activities
                                          
                                          
                                          518,813
                                          
                                          
                                          
                                          (679,018
                                          )
 
 See Notes
to Unaudited Consolidated Financial Statements
 
 5
 
 POWER
SPORTS FACTORY, INC.
 STATEMENT
OF CASH FLOWS
 (Unaudited)
 
 For the Nine MonthsEnded September 30,2008
                              
                              
                              2007Net
      increase in cash
                              
                              
                              (10,166
                              )
                              
                              
                              85,260Cash
      - beginning of period
                              
                              
                              11,146
                              
                              
                              
                              46,740Cash
      - end of year
                              
                              $
                              980
                              
                              
                              $
                              132,000Changes
      in operating assetsand liabilities
      consists of:(
      Increase)decrease in accounts receivable
                              
                              $
                              (75,237
                              )
                              
                              $
                              347,234(
      Increase)decrease in inventory
                              
                              
                              (807,426
                              )
                              
                              
                              1,362,151(
      Increase ) in prepaid expenses
                              
                              
                              (1,958
                              )
                              
                              
                              (48,008
                              )(
      Increase) deposit on bikes
                              
                              
                              
                              
                              
                              
                              (202,640
                              )Increase
      in accounts payable
                              
                              
                              2,096,432
                              
                              
                              
                              333,710Increase(decrease)
      in accrued expenses
                              
                              
                              415,824
                              
                              
                              
                              (5,250
                              )Increase
      in customer deposits
                              
                              
                              65,481
                              
                              
                              
                              -$
                              1,693,116
                              
                              
                              $
                              1,787,197Supplementary
      information:Cash
      paid during the year for:Income
      taxes
                              
                              $
                              -
                              
                              
                              $
                              -Interest
                              
                              $
                              17,499
                              
                              
                              $
                              -Non-cash
      financing activitiesIssuance
      of preferred stock for services
                              
                              $
                              63,543
                              
                              
                              $
                              -Issuance
      of warrants for services
                              
                              $
                              80,000
                              
                              
                              $
                              -Issuance
      of common stock for services
                              
                              $
                              116,250
                              
                              
                              $
                              -Issuance
      of common stock for debt
                              
                              $
                              351,000
                              
                              
                              $
                              -
 
 See Notes
to Unaudited Consolidated Financial Statements
 
 6




Power
Sports Factory, Inc.


Notes to
Unaudited Consolidated Financial Statements


September
30, 2008





1.
            Description
      of Business and Summary of Significant Accounting
  Policies





ORGANIZATION





Power
Sports Factory, Inc. (formerly Purchase Point Media Corp.), (the “Company”) was
incorporated under the laws of the State of Minnesota.





The
Company, through a reverse acquisition described below is in the business of
marketing, selling, importing and distributing motorcycles and
scooters.  The Company principally imports products from
China.  To date the Company has marketed significantly under the
Yamati and Andretti brands.





BASIS OF
PRESENTATION





On
September 5, 2007, the Company entered into a share exchange agreement with the
shareholders of Power Sports Factory, Inc. (“PSF”).  In connection
with the share exchange, the Company acquired the assets and assumed the
liabilities of PSF (subsidiary) as the acquirer.  The financial
statements prior to September 5, 2007 are those of PSF and reflect the assets
and liabilities of PSF at historical carrying amounts.





As
provided for in the share exchange agreement, the stockholders of PSF received
60,000,000 shares of the Company’s common stock and 1,650,000 of Series B
Convertible Preferred Stock (“Preferred Stock”) of the Company (each share of
preferred stock is convertible into 10 shares of common stock) representing 77%
of the outstanding stock after the acquisition, in exchange for the outstanding
shares of PSF common stock they held, which was accounted for as a
recapitalization.  The financial statements show a retroactive
restatement of the Company’s historical stockholders’ deficiency to reflect the
equivalent number of shares of common stock issued in the
acquisition.





The
consolidated balance sheet as of September 30, 2008, and the consolidated
statements of operations, stockholders’ deficiency and cash flows for the
periods presented herein have been prepared by the Company and are
unaudited.  In the opinion of management, all adjustments (consisting
solely of normal recurring adjustments) necessary to present fairly the
financial position, results of operations, changes in stockholders’ deficiency
and cash flows for all periods presented have been made.  The results
for the nine months ended September 30, 2008 should not be viewed as indicative
of the Company’s annual results or the Company’s results for any other
period.  The information for the consolidated balance sheet as of
December 31, 2007 was derived from audited financial statements.





GOING
CONCERN





The
Company’s consolidated financial statements for the nine months ended
September  30, 2008 have been prepared on a going concern basis which
contemplates the realization of assets and the settlement of liabilities in the
normal course of business.  Management recognizes that the Company’s
continued existence is dependent upon its ability to obtain needed working
capital through additional equity and/or debt financing and revenue to cover
expenses as the Company continues to incur losses.





The
Company presently does not have sufficient liquid assets to finance its
anticipated funding needs and obligations.  The Company’s continued
existence is dependent upon its ability to obtain needed working capital through
additional equity and/or debt financing and achieve a level of revenue and
production adequate to support its cost structure.  Management is
actively seeking additional capital to ensure the continuation of its current
operations, complete its proposed activities and fund its current debt
obligations.  However, there is no assurance that additional capital
will be obtained.  These uncertainties raise substantial doubt about
the ability of the Company to continue as a going concern.  The
accompanying consolidated financial statements do not include any adjustments
that might result from the outcome of these uncertainties should the Company be
unable to continue as a going concern.


7


Power
Sports Factory, Inc.


Notes to
Unaudited Consolidated Financial Statements


September
30, 2008





SIGNIFICANT
ACCOUNTING POLICIES





PRINCIPLES
OF CONSOLIDATION





The
Company’s consolidated financial statements include the accounts of the Company
and its wholly-owned and majority-owned subsidiaries.  All
inter-company transactions and balances have been eliminated.





USE OF
ESTIMATES





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the period. Actual results could differ from those
estimates.





CONCENTRATION
OF CREDIT RISK





Financial
instruments which potentially subject the Company to concentration of credit
risk consist principally of accounts receivable.  The Company grants
credit to customers based on an evaluation of the customer’s financial
condition, without requiring collateral.  Exposure to losses on the
receivables is principally dependent on each customer’s financial
condition.  The Company controls its exposure to credit risk through
credit approvals.





INVENTORIES





Inventories
are stated at the lower of cost or market.





REVENUE
RECOGNITION





The
Company recognizes revenue in accordance with the guidance contained in SEC
Staff Accounting Bulletin No. 104 "Revenue Recognition Financial Statements"
(SAB No. 104). Revenue is recognized when the product has been delivered and
title and risk of loss have passed to the customer, collection of the
receivables is deemed reasonably assured by management, persuasive evidence of
an agreement exist and the sale price is fixed and determinable.





EARNINGS
PER SHARE





Basic
loss per share is computed by dividing net loss by the weighted average number
of common shares outstanding during the specified period.  Diluted
loss per common share is computed by dividing net loss by the weighted average
number of common shares and potential common shares during the specified
period.  All potentially dilutive securities at September 30, 2008
which include stock purchase warrants and convertible debt, convertible into
1,000,000 common shares, have been excluded from the computation as their effect
is antidilutive.  There were no potentially dilutive securities at
September 30, 2007.





EVALUATION
OF LONG-LIVED ASSETS





The
Company reviews property and equipment and finite-lived intangible assets for
impairment whenever events or changes in circumstances indicate the carrying
value may not be recoverable in accordance with guidance in Statement of
Financial Accounting Standards (SFAS) No. 144 "Accounting for the Impairment or
Disposal of Long-Lived Assets." If the carrying value of the long-lived asset
exceeds the present value of the related estimated future cash flows, the asset
would be adjusted to its fair value and an impairment loss would be charged to
operations in the period identified.




8


Power
Sports Factory, Inc.


Notes to
Unaudited Consolidated Financial Statements


September
30, 2008




DEPRECIATION
AND AMORTIZATION





Property
and equipment are stated at cost. Depreciation is provided for by the
straight-line method over the estimated useful lives of the related
assets.





STOCK
BASED COMPENSATION





For the
nine months ended September 30, 2008 and  2007, the Company issued
39,103 and -0- of its preferred shares and recorded consulting expense of
$63,543 and $-0-, respectively, the fair value of the shares at the time of
issuance.





For the
nine months ended September 30, 2008 and 2007, the Company issued 200,000 and
-0- warrants and recorded consulting expense of $80,000 and $-0-, respectively,
the fair value of the warrants at the time of issuance.





For the
nine months ended September 30, 2008 and 2007, the Company issued 589,285 and
-0- f its common stock and recorded consulting expenses of $116,250 and $-0-
respectively, fair value of the shares at the time of issuance.





INCOME
TAXES





The
Company accounts for income taxes using an asset and liability approach under
which deferred taxes are recognized by applying enacted tax rates applicable to
future years to the differences between financial statement carrying amounts and
the tax basis of reported assets and liabilities. The principal item giving rise
to deferred taxes are future tax benefits of certain net operating loss
carryforwards.





BENEFICIAL
CONVERSION FEATURE





When debt
or equity is issued which is convertible into common stock at a discount from
the common stock market price at the date the debt or equity is issued, a
beneficial conversion feature for the difference between the closing price and
the conversion price multiplied by the number of shares issuable upon conversion
is recognized.  The beneficial conversion feature is presented as a
discount to the related debt, with an offering amount increasing additional
paid-in capital.





FAIR
VALUE OF FINANCIAL INSTRUMENTS





For
financial instruments including cash, accounts payable, accrued expenses, and
loans payable, it was assumed that the carrying amount approximated fair value
because of the short maturities of such instruments.





RECLASSIFICATIONS





Certain
reclassifications have been made to prior period amounts to conform to the
current year presentation.  We made changes to dividends payable but
it had no effect on the statement of operations.





NEW
FINANCIAL ACCOUNTING STANDARDS




In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles” (“SFAS No. 162”).  SFAS No. 162 identifies the
sources of accounting principles and the framework for selecting the principles
to be used in the preparation of financial statements of nongovernmental
entities that are presented in conformity with generally accepted accounting
principles (GAAP) in the United States.  This Statement is effective sixty
days following the SEC’s approval of the Public Company Accounting Oversight
Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity
With Generally Accepted Accounting Principles.”  The Company is currently
evaluating the potential impact, if any, of the adoption of SFAS No. 162 on its
financial statements.




9


Power
Sports Factory, Inc.


Notes to
Unaudited Consolidated Financial Statements


September
30, 2008




In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
and Hedging Activities”, an amendment of FASB Statement No. 133 (“SFAS No.
161”).  The new standard is intended to improve financial reporting about
derivative instruments and hedging activities by requiring enhanced disclosures
to enable investors to better understand their effects on an entity’s financial
position, financial performance and cash flows.  It is effective for
financial statements issued for fiscal years and interim periods beginning after
November 15, 2008.  The Company does not believe that SFAS No. 161 will
have a material impact on its financial statements.




In
February 2008, the FASB issued FASB Staff Position SFAS 157-1, “Application
of SFAS No. 157 to SFAS No. 13 and Its Related Interpretative Accounting
Pronouncements that Address Leasing Transactions” (“FSP SFAS 157-1”) and FASB
Staff Position SFAS 157-2, “Effective Date of SFAS No. 157” (“FSP SFAS
157-2”). FSP SFAS 157-1 excludes SFAS No. 13 and its related interpretive
accounting pronouncements that address leasing transactions from the
requirements of SFAS No. 157, with the exception of fair value measurements of
assets and liabilities recorded as a result of a lease transaction but measured
pursuant to other pronouncements within the scope of SFAS No. 157. FSP SFAS
157-2 delays the effective date of SFAS No. 157 for all nonfinancial assets and
nonfinancial liabilities, except those that are recognized or disclosed at fair
value in the financial statements on a recurring basis (at least annually). FSP
SFAS 157-1 and FSP SFAS 157-2 became effective for the Company upon adoption of
SFAS No. 157 on January 1, 2008. The Company will provide the additional
disclosures required relating to the fair value measurement of nonfinancial
assets and nonfinancial liabilities when it fully implements SFAS No. 157 on
January 1, 2009, as required, and does not believe they will have a significant
impact on its financial statements.





2.
            Inventories





The
components of inventories are as follows:





September 30,
                  
                  
                  December 31,2008
                  
                  
                  2007Motor
      bikes
                  
                  $
                  1,352,910
                  
                  
                  $
                  576,780Parts
                  
                  
                  142,219
                  
                  
                  
                  44,340Deposits
      on Inventory
                  
                  
                  250,000
                  
                  
                  
                  316,583$
                  1,745,129
                  
                  
                  $
                  937,703




In October, 2007, the Company entered
into a Manufacturing Agreement, and subsequently entered into an Amendment
thereto, with Dickson International Holdings Ltd. for the manufacture of
Andretti/Benelli branded motor scooters for the exclusive distribution thereof
in the United States by the Company. The Manufacturing Agreement is for a term
of two years and is renewable for successive two-year terms unless either party
gives notice of termination in advance of the renewal
period.   The Company is required to use commercially reasonable
efforts to purchase certain minimum quantities of motor scooters.  As
an initial deposit under the Manufacturing Agreement, the Company issued to
Dickson Holdings Ltd. 500,000 shares of the Company’s common stock valued at
$250,000.




10


Power
Sports Factory, Inc.


Notes to
Unaudited Consolidated Financial Statements


September
30, 2008





3.
            Property
      and Equipment





September 30,
                  
                  
                  December 31,2008
                  
                  
                  2007Equipment
                  
                  $
                  41,898
                  
                  
                  $
                  40,586Signs
                  
                  
                  7,040
                  
                  
                  
                  7,040Software
                  
                  
                  -
                  
                  
                  
                  37,56648,938
                  
                  
                  
                  85,192Less:
      accumulated depreciation
                  
                  
                  21,074
                  
                  
                  
                  13,803$
                  27,864
                  
                  
                  $
                  71,389




Depreciation
expense for the nine and three months ended September 30, 2008 and 2007 amounted
to $7,271 and $4,268 and $2,386 and $1,977, respectively.





4.
            Note
      Payable





On
January 27, 2006, the Company entered into a revolving credit loan and floor
plan loan (the “Credit Facility”) with General Electric Commercial Distribution
Finance Corporation (“CDF”).  Terms under the Trade Finance Purchase
Program (“TFPP”) included interest at prime plus 1 1⁄2 percent with one tenth of
one percent per month administration fee, and a rate of prime plus 5 percent on
all amounts outstanding after maturity with a two and one half tenths of one
percent administration fee.  Maturity on advances under the TFPP was
180 days.  Advance rate under the TFPP was 100 percent of supplier
invoice plus freight.  CDF had a first security interest in all
inventory equipment, fixtures, accounts, chattel paper, instruments, deposit
accounts, documents, general intangibles, letter of credit rights, and all
judgments, claims and insurance policies via Uniform Commercial Code Filing
Position or invoice purchase money security interest.  The Credit
Facility was personally guaranteed by an officer and director of the
Company.





On June
6, 2006, the Company entered into an amendment to the Credit Facility whereby
the Company agreed to post an Irrevocable Letter of Credit (“ILOC”) as
additional collateral for the amounts loaned under the Credit
Facility.  The amount of the ILOC was required to be 15 percent of the
amounts outstanding or advanced.  In addition, the Amendment provided
in part that “Interest on an advance for Import Inventory shall begin to accrue
on the date CDF makes such an advance.  Interest on all other advances
shall begin on the Start Date which shall be defined as the earlier of (A) the
invoice date referred to in the Vendors invoice; or (B) the ship date referred
to in the Vendors invoice; or (C) the date CDF makes such advance....” On October
9, 2006, CDF sent the Company a notice of default for failing to make one or
more payments due under the Credit Facility.  CDF demanded a payment
to cure the default in the amount of $320,034.10 by October 13, 2006, which
payment was not made. On November 6, 2006, CDF terminated the Credit Facility
and demanded full payment, requiring final payment of a claimed remaining
balance of $1,817,920.  On November 17, 2006, CDF initiated a lawsuit
in the United States District Court for the District of New Jersey to enforce
its rights under the Credit Facility and related documents.  The
requested relief included a Court for replevin, granting CDF the right to
possess any and all Collateral covered by its security interest. On January 20,
2007, the Company entered into a Forbearance Agreement with CDF regarding the
Credit Facility.  The Forbearance Agreement stated that the amount of
the Company’s indebtedness as of that date was $1,570,376. Under the Forbearance
Agreement, the Company agreed to a new Payment Program.  The new
Payment Program provided that the Company would make payments monthly through
April, 2007.  Under this agreement, the Company also agreed to execute
a Stipulated Order for Preliminary Injunction and Writ of Seizure
(“Writ”).  The Writ could be filed in the event of a default under the
Forbearance Agreement at any time.  If no default occurred, the Writ
could be duly filed after March 1, 2007, to further protect CFD’s
interest.  On March 19, 2007, CDF filed the Writ.  There was
no Forbearance Agreement default as of that date.  The Writ was never
executed upon, meaning that CDF did not repossess the Company’s Collateral at
any time.  The last payment to CDF was made by the Company on or about
July 20, 2007.  As of that date, all indebtedness under the Credit
Facility, the Forbearance Agreement, and any related Agreements with CDF has
been satisfied, by revenue generated through sales by the
Company.


11


Power
Sports Factory, Inc.


Notes to
Unaudited Consolidated Financial Statements


September
30, 2008




5.      Long-term
debt





Long-term
debt consists of the following:





September 30,
                        
                        
                        December 31,2008
                        
                        
                        2007Note
      payable to Five Point Capital Inc. due May 2011; interest at
      18.45%; monthly payments of $397
                        
                        $
                        11,150
                        
                        
                        $
                        13,036Note
      payable due April 30, 2008; interest at 10% payable at maturity
      (1)
                        
                        
                        80,000
                        
                        
                        
                        80,000Note
      payable to Premium Payment Plan due May 31, 2008; interest at 7.5%;
      monthly payments of $871
                        
                        
                        -
                        
                        
                        
                        4,218Note
      payable to AICCO, Inc. due July 13, 2008; interest at 8%; monthly payments
      of $7,111 (2)
                        
                        
                        -
                        
                        
                        
                        48,479Note
      payable to Micro Capital  Management Corp. due June 14, 2008;
      interest at 8% (4)
                        
                        
                        -
                        
                        
                        
                        14,500Note
      payable to AICCO, Inc due  September10, 2008, interest at
      7.75%;  monthly payments of $7,388 (3)
                        
                        
                        -
                        
                        
                        
                        -Demand
      note payable to Shawn Landgraf; interest free
                        
                        
                        -
                        
                        
                        
                        15,000Note
      payable due June 15, 2008; interest at 20.0% simple interest with a
      private investor(s) (5)
                        
                        
                        240,000
                        
                        
                        
                        -331,150
                        
                        
                        
                        175,233Less
      amounts due within one year
                        
                        
                        322,953
                        
                        
                        
                        164,772$
                        8,197
                        
                        
                        $
                        10,461





For the
nine and three months ended September 30, 2008 and 2007, the Company recorded
interest expense of $28,260, $4,782 and $13,094 and $3,410,
respectively.


12


Power
Sports Factory, Inc.


Notes to
Unaudited Consolidated Financial Statements


September
30, 2008





1) On
July 31, 2007, the Company borrowed $80,000 from an investor.  The
note matured on April 30, 2008 at which time the principal amount plus ten
percent interest was due. The maturity date was extended to May 30, 2008
and then extended to October 1, 2008. The Company issued 10,000 shares of the
Company’s common stock valued at $3,000, as additional consideration with the
loan, subsequent to March 31, 2008.  This note is currently in
default.




2) On
October 1, 2007, the Company entered into a premium finance agreement with
Aicco, Inc., for the purchase of insurances.  The total amount
financed was $68,575, with an annual percentage rate of 8% and monthly payments
of $7,111.  The final payment was due on July 13, 2008, and was
satisfied.




3) On
February 1, 2008, the Company entered into a premium finance agreement with
Aicco, Inc., for the purchase of additional insurances.  The total
amount financed was $57,420, with an annual percentage rate of 7.75% and monthly
payments of $7,387.66.  The final payment was due on September 10,
2008, and was satisfied.




4) On
December 14, 2007, the Company borrowed $14,500 on a short term basis due June
14, 2008 at 8% interest.  For the nine months ended September 30,
2008, the Company recorded interest expense of $821.  On August 6,
2008, the Company satisfied the outstanding debt and accrued interest with the
issuance of thirteen motorbikes and 10,000 shares of common stock.




5)  On
April 15, 2008, the Company entered into a short term promissory note with a
private investor in the amount of $300,000.  The interest rate is a
simple twenty percent and the note matures on June 15, 2008.  This
note is currently in default.




6) On
August 12, 2008, the Company entered into an interim inventory funding
arrangement with a distributor whereby the distributor has agreed to acquire
inventory of makes and models from the Company’s manufacturers under the
Andretti brand and finance them exclusively for the Company over a ninety day
period for and average cost of 3.333% per month.  On August 26, 2008,
the parties modified the agreement to four percent fixed plus interest of one
and one-tenth percent per month after ninety days plus fees up to one hundred
and eighty days.  The Company also issued the distributor 250,000
shares of its common stock valued at $62,500 as an additional
incentive.  The Company may utilize this arrangement up to one million
two hundred thousand dollars.  The distributor has the right to
acquire inventory at substantially favorable pricing if it desires to sell the
product in territories that the Company has no dealers.  These
transactions must be approved by the Company.  The Company maintains
product liability and warranty responsibility on the entire inventory, as well
as financing costs and warehousing costs.  If the Company does not
take possession of the inventory at the end of any ninety day period, the
distributor has the right to sell them at cost.  The agreement is
personally guaranteed by a current officer of the Company and a former officer
of the Company.




The
aggregate amounts of all long-term debt to be repaid for the year following
December 31, 2008 is:





2008
                          
                          $
                          321,1652009
                          
                          
                          3,1882010
                          
                          
                          3,8282011
                          
                          
                          2,969331,150Current
      portion
                          
                          
                          322,953$
                          8,197




13


Power
Sports Factory, Inc.


Notes to
Unaudited Consolidated Financial Statements


September
30, 2008





6.
            Convertible
      Debt





On
September 7, 2007, the Company issued four convertible promissory notes for a
total of $150,000 with interest at twelve (12.0%) percent.  The notes
mature October 1, 2009.  The notes are convertible, at the option of the
holders, into 300,000 shares of the Company’s common stock.  Quarterly
interest and principal payments are $5,812.50 per note.  Total interest due
September 30, 2008 is $33,757.24. Payments due under the note for January 1,
April 1, July 1, and October 1, 2008 are currently in default.





On
November 2, 2007, the Company issued a convertible promissory note for $250,000
with interest at twelve (12%) percent.  The note matured on April 30,
2008.  The maturity date had been extended to October 1, 2008. The note is
convertible, at the option of the holder, into 250,000 shares of the Company’s
common stock. On August 6, 2008, this note and accrued interest of $25,000 were
converted in to 550,000 common shares.





On
January 4, 2008, the Company entered into a short term secured convertible
promissory note with a private investor for $250,000 at an annual simple
interest rate of 15%.  The note originally matured on March 1, 2008 and was
extended to August 15, 2008.  This note is currently in default. The note
has the option to convert into post-reverse split common shares @ $1.00 per
share.  The Company granted the investor a security interest in all of the
Company’s right, title and interest in all inventory of motorcycles, motor
scooters, parts accessories and all proceeds of any and all of same including
insurance payments and cash.  On December 9, 2008, the investor
executed an agreement with the Company’s new inventory financier in which the
private investor accepted a $100,000 payment towards principal, subordinated his
security interest to the new inventory financier and agreed to a stand still
subject to written authorization from the new financier. This inventory
financing has not closed yet.





The
Company has evaluated the conversion feature under applicable accounting
literature, including SFAS No. 133, “Accounting for Derivative Instruments and
Hedging Activities” and EITF 00-19 “Accounting for Derivative Financial
Instruments indexed to, and Potentially Settled in, a Company’s Owned Stock” and
concluded that none of these features should be respectively accounted for as
derivatives.  The difference between the conversion of $650,000 and
the fair value of the common stock into which the debt is convertible of
$470,000 was included as additional paid in capital based on the conversion
discount. The beneficial conversion factor in the amount of $180 is being
accreted over the lives of the outstanding debt.  Accretion expense of
the beneficial conversion feature for the nine months ended September 30, 2008
amounted to $76,752.  For the nine months ended September 30, 2008,
and 2007, the Company recorded interest expense of $67,973 and $104 respectively
on the convertible notes of which $59,080 is included in accrued expenses on the
Company’s balance sheet.





7.
            Note
      Receivable/Note Payable - Related
Party





a) As of
December 31, 2006, the Company advanced $166,400 to a related party. This
advance was taken as payroll in 2007.  This was a demand loan with no
interest.





b) In
2007 and 2006, officers of the Company advanced $74,800 and $54,266,
respectively, to the Company.  During 2008 and 2007, the Company
repaid $3,103 and $102,600, respectively.  At September 30, 2008, the
balance was $23,363. Two of the advances are interest free and all are due upon
demand.  Interest expense for the nine months ended September 30,
2008, and 2007 were $365 and $1,317 respectively.




14


Power
Sports Factory, Inc.


Notes to
Unaudited Consolidated Financial Statements


September
30, 2008





8.
            Accrued
      Expenses





Accrued
expenses consist of the following:





September 30,
                  
                  
                  December 31,2008
                  
                  
                  2007Payroll
      expense
                  
                  $
                  132,138
                  
                  
                  $
                  76,978Payroll
      tax expense
                  
                  
                  326,080
                  
                  
                  
                  45,825Interest
      expense
                  
                  
                  105,588Other
                  
                  
                  44,821
                  
                  
                  
                  70,001$
                  608,628
                  
                  
                  $
                  192,804




9.
            Stockholders’
      Equity





Common Stock


The
Company is authorized to issue 100,000,000 shares of no par value common
stock.    All the outstanding common stock is fully paid and
non-assessable.  The total proceeds received for the common stock is
the value used for the common stock.





In May
2008, the Company’s shareholders approved a 1 for 20 reverse stock
split.  Except for the presentation of common shares authorized and
issued on the consolidated balance sheet, all shares and per share information
has been revised to give retroactive effect to the reverse stock
split.





During
2007, certain officers of the Company contributed $175,000 to the Company, which
is included in Additional paid-in capital on the Company’s consolidated balance
sheet.





a)
            On
      August 6, 2008, the Company converted a $250,000 note payable and accrued
      interest of $25,000 into 550,000 common
shares.





b)
            On
      August 20, 2008, the company retained a consultant to provide equity
      research services.  The Consultant was compensated 75,000 common
      shares for these services valued at
$18,750.





c)
            On
      August 26, 2008, the Company issued a distributor 250,000 shares of common
      stock valued at $62,500.





d)
            On
      August 28, 2008, the Company paid compensation to a staffing company for
      providing sales personnel for a total of $20,000, which was paid $10,000
      in cash and 14,285 shares of common stock valued at
    $10,000.





e)
            On
      September 25, 2008, the Company retained a consultant to provide long
      range investor relations planning.  The consultant was
      compensated 250,000 shares of common stock valued at $25,000 for these
      services.





f)
            On
      September 29, 2008, an officer and director of the company, converted
      $40,000 of debt into 500,000 shares of common
  stock.





g)
            On
      September 29, 2008, an officer and director of the company, converted
      $21,000 of debt into 262,500 shares of common
  stock.





h)
            On
      September 29, 2008, a consultant of the Company converted $40,000 of debt
      into 500,000 shares of common
stock.


15


Power
Sports Factory, Inc.


Notes to
Unaudited Consolidated Financial Statements


September
30, 2008





Preferred
Stock


The
Company is authorized to issue 50,000,000 shares of no par value preferred
stock.  The Company has designated 3,000,000 of these authorized
shares of preferred stock as Series B convertible Preferred
Stock.  The Board of Directors has the authority, without action by
the stockholders, to designate and issue the shares of preferred stock in one or
more series and to designate the rights, preferences and each series, any or all
of which may be greater than the rights of the Company’s common
stock.





a)
            During
      2007, the Company sold 54,000 shares of Series B Convertible Preferred
      Stock and received proceeds of
$270,000.





b)
            During
      2007, the Company issued 333,316 shares of Series B Convertible Preferred
      Stock in exchange for the liquidation of $1,663,000 of Company
      debt.





c)
            During
      2007, the Company issued 265,900 shares of Series B Convertible Preferred
      Stock for services with a fair value of
  $726,950.





d)
            On
      January 18, 2008, the Company retained a firm to provide management
      consulting, business advisory, shareholder information and public relation
      services. The term of the agreement is one year. The Company issued 35,000
      Series B Convertible shares for services to be performed with a fair value
      $43,750 and pays $2,500 per month as compensation under the
      agreement.





e)
            On
      March 24, 2008, the Company issued 389 shares of Series B Convertible
      Preferred Stock for services valued at
$1,712.





f)
            On
      April 1, 2008, the Company retained a marketing consultant for
      $15,000.  On April 21, 2008, the consultant agreed to convert
      his payable into 3,000 shares of Series B Convertible
    Shares.





g)
            On
      April 24, 2008, the Company paid compensation to staffing company for
      providing permanent accounting personnel for a total of $10,272, which was
      paid $7,191 in cash and 514 shares of Series B Convertible Preferred
      Shares.





h)
            On
      May 16, 2008, the Company issued MCMC, LLC. 200 shares of Series B
      Convertible Preferred Shares.





In June
2008, all shares of Series B Convertible Preferred shares outstanding on that
date were converted into shares of common stock at the rate of 10 shares
for each share of Series B Convertible Preferred Stock.




10.








The
Company adopted the provisions of financial Interpretation No. 48, “Accounting
for Uncertainty in Income Taxes” (“FIN 48”) on January 1, 2007.  As a
result of the implementation of FIN 48, the Company recognized no adjustment in
the net liability for unrecognized income tax benefits.





11.
Warrants





During
January 2008, the Company issued a warrant to purchase 200,000 common shares at
an exercise price of $0.01 per share.  The warrant expires December
31, 2017.  The fair value of the warrant is estimated on the date of
the grant using the Black-Scholes option-pricing model with the following
weighted average assumptions used for the warrant in 2008: dividend yields of
0%, expected volatility of 218% and expected life of 10 years.


16


Power
Sports Factory, Inc.


Notes to
Unaudited Consolidated Financial Statements


September
30, 2008





Summary
of warrant activity as of September 30, 2008 and the changes during the nine
months ended September 30, 2008:





WeightedWeighted
                
                
                Average
                
                
                AggregateAverage
                
                
                Remaining
                
                
                IntrinsicWarrants
                
                Shares
                
                
                Exercise Price
                
                
                Contractual Term
                
                
                ValueOutstanding
      at January 1, 2008
                
                
                -
                
                
                $
                -Granted
                
                
                200,000
                
                
                
                0.01
                
                
                
                9.5
                
                
                $
                -Exercised
                
                
                -
                
                
                
                -Forfeited,
      expired or cancelled
                
                
                -
                
                
                
                -
                
                
                
                
                
                
                $
                -Outstanding
      at September 30, 2008
                
                
                200,000
                
                
                $
                0.01
                
                
                
                9.5Exercisable
      at September 30, 2008
                
                
                200,000
                
                
                $
                0.01
                
                
                
                9.5





a.
            Dividend
      Payable





In
September 2007, the Company entered into a share exchange agreement with the
shareholders of PSF.  Following the share exchange, the Company would
transfer its existing business relating to the development of lastword® to its
subsidiary, The Last Word Inc.  To distribute the existing business of
the Company to the shareholders, the Board of Directors of PPMC declared a
dividend, payable in common stock of our subsidiary holding the lastword®
technology, at the rate of one share of common stock of the subsidiary for each
share of common stock of PPMC owned on the record date.  The Board of
Directors of PPMC used May 2, 2007, as the record date for this share dividend,
with a payment date as soon as practicable thereafter.  Prior to the
payment of this dividend, our subsidiary holding the lastword® technology will
have to file a registration statement under the Securities Act of 1933 with, and
have the filing deemed effective by the SEC.  The Company plans to
file the registration statement as soon as practicable.  As of
September 30, 2008 and December 31, 2007, the dividend payable in the amount of
$673,176 represents the net liabilities that will be assumed by The Last Word
Inc.





13. Commitments
and Contingencies





a)       
        On April 1, 2007, the Company hired two consultants to provide
      transition management services, business planning, managerial systems
      analysis, sales and distribution assistance and inventory management
      systems services.  Both contracts are each $15,000 per month and
      can be terminated at will when the Company decides that the services have
      been completed and/or are no longer necessary.  One contract
      ceased on May 15, 2008.  The other contract ceased on August 15
      2008.  For the nine months ended September 30, 2008, the Company
      recorded consulting expense of
$202,500.





b)         
       On May 15, 2007, the Company entered into an exclusive licensing
      agreement with Andretti IV, LLC, a Pennsylvanian limited liability company
      to brand motorcycles and scooters.  The term of the agreement is
      through December 31, 2017.  Royalties under the agreement are
      tied to motorcycle and scooter sales branded under the “Andretti
      line”.  Th e agreement calls for a minimum annual
      guarantee.  After year two of the agreement, if the Company does
      not sell a certain minimum number of motorcycles and scooters under the
      “Andretti Line” it may elect to terminate the licensing agreement. A
      minimum payment of $250,000 was due under the agreement on March 31,
      2008.  A minimum payment of $250,000 is also due on July 31,
      2008.  These two payments totaling $500,000 represent the minimum
      annual guarantee owed to Andretti IV LLC for 2008.  In addition,
      after certain volume targets are met, Andretti IV LLC receives a per bike
      fee.  A consultant working for the Company co-guaranteed the minimum
      annual guarantee for the first two years and receives a 4.1667% of the
      license fees as a fee throughout the life of the license related to that
      work. The consultant subsequently became an officer and director of the
      Company.  On January 1, 2008, the Company issued a warrant to
      Andretti IV, LLC, pursuant to their May 15, 2007 agreement, to purchase
      200,000 common shares following the effectiveness of the Reverse Split at
      an exercise price equal to $.01 per share.  The warrant expires
      December 31, 2017.  The Company issued the warrant as part of the
      consideration to Andretti IV LLC in connection with the original license
      agreement signed in May 2007.  The Company paid $50,000 as a
      licensing fee in 2007.  The Company has paid $50,000 in 2008. The
      warrant has been accounted for in the financial
      statements.


17


Power
Sports Factory, Inc.


Notes to
Unaudited Consolidated Financial Statements


September
30, 2008





c)         
      On June 1, 2007, the Company hired Steven A. Kempenich as its Chief
      Executive Officer and a director of the Company.  His contract
      is a two-year agreement at $16,666 per month.  On August 14,
      2008, he was terminated for cause.




d)           On
October 11, 2007, the Company retained a firm to provide corporate
communications and investor relations.  The agreement is for one year
which automatically renews unless either party elects to terminate the agreement
with a notice of termination no later than sixty days prior to the end of the
term.  Fees for these services are $5,000 per month and 20,000 shares
of common stock.  Fees are earned but deferred until the seventh month
at which time the deferred fees are paid in equal amounts along with the current
fees as they are incurred.  The Company paid $24,000 as consulting
fees in 2007 of which $14,000 was paid with 1,000 shares of preferred
stock.




e)           Effective
January 1, 2008, the Company entered into a monthly agency retainer agreement
with a marketing and advertising firm to provide the company with services at a
fee of $25,000 per month. This agreement ceased at the end of May,
2008.




g)           On
May 14, 2008, the Company signed an agreement with Road America Motor Club,
Inc., to provide a 24 hour road-side assistance program to Andretti motorbike
owners.  The agreement commenced as of April 1, 2008 and continues for an
initial term of two years, or until terminated by either party according to the
terms of the agreement.  The Company pays for the enrollment of each bike
properly entered into the company warranty program for a period of one year
subject to terms and conditions.




h)           On
June 27, 2008, the Company entered into a second licensing agreement with
Andretti IV, LLC, to further utilize the name Andretti in the branding and sale
of its Yamati brand line.  The term of the agreement is through December
31, 2018.  Royalties under the agreement are tied to motorcycle and
scooter sales branded under the “Andretti Yamati line”.  The agreement
calls for a Minimum Annual Guarantee.  Minimum payment of $45,000 was due
on September 30, 2008.  A minimum payment of $45,000 is also due on
December 31, 2008.  These payments have not been made.  After
year two of the agreement, if the Company does not sell a certain minimum number
of motorcycles and scooters under the “Andretti Yamati Line” it may elect to
terminate the licensing agreement.




i)       On
July 16, 2008, the Company entered into contracts with a storage company to
provide warehousing and logistics services on the west coast of the United
States.  This contract requires fees for storage and handling of our
motor bike inventory which are incurred monthly on a per bike
basis.




18


Power
Sports Factory, Inc.


Notes to
Unaudited Consolidated Financial Statements


September
30, 2008





j)      On
August 12, 2008, the Company entered into an interim inventory funding
arrangement with a distributor whereby the distributor has agreed to acquire
inventory of makes and models from the Company’s manufacturers under the
Andretti brand and finance them exclusively for the Company over a ninety day
period for and average cost of 3.333% per month.  On August 26, 2008,
the parties modified the agreement to four percent fixed plus interest of one
and one-tenth percent per month after ninety days plus fees up to one hundred
and eighty days.  The Company also issued the distributor 250,000
shares of its common stock as an additional incentive.  The Company
may utilize this arrangement up to one million two hundred thousand
dollars.  The distributor has the right to acquire inventory at
substantially favorable pricing if it desires to sell the product in territories
that the Company has no dealers.  These transactions must be approved
by the Company.  The Company maintains product liability and warranty
responsibility on the entire inventory, as well as financing costs and
warehousing costs.  If the Company does not take possession of the
inventory at the end of any ninety day period, the distributor has the right to
sell them at cost.  The agreement is personally guaranteed by a
current officer of the Company and a former officer of the Company.





k)  On
August 15, 2008, the Company hired Shawn Landgraf as the chief executive
officer.  His salary is $156,000 per year.  He does not have
a contract at this time.  Landgraf is also the president of Magnus
Partners, Inc., which has provided services to the Company in the past and is
currently owed $173,750.





14.           Subsequent
Events




a)
            On
      October 1, 2008, the Company borrowed $150,000 on a short term basis at
      fifteen percent interest compounded monthly and 125,000 shares of common
      stock valued at $22,500.  The note and interest were due on
      November 30, 2008. An Officer of the Company guaranteed the loan.
      This note is in default.




b)
            On
      October 1, 2008, the Company entered into a premium finance agreement with
      Cananwill, Inc., for the purchase of insurance.  The total
      amount financed was $67,500, with an annual percentage rate of 8.84% and
      monthly payments of $7,026.50.




c)
            On
      October 1, 2008, the Company entered into a premium finance agreement with
      Cananwill, Inc., for the purchase of additional insurance.  The
      total amount financed was $27,000, with an annual percentage rate of 8.59%
      and monthly payments of $2,807.44.




d)
            On
      October 21, 2008, the Company entered into an agreement with a firm to
      provide the Company with capital restructuring and corporate financing
      advice.  The firm was compensated 500,000 shares of common stock
      valued at $40,000.




e)
            On
      October 23, 2008, the Company entered into an exclusive distribution
      agreement with Eurospeed, Inc., to distribute its Andretti product line to
      new and used automotive dealers in the U.S. and Canada.  The
      agreement calls for an initial purchase of six hundred units before
      November 30, 2008 and a minimum of seventy-five hundred units over the
      first twelve months of the agreement.  The Company’s
      manufacturer has agreed to supply Eurospeed with product in the event that
      the Company defaults under its manufacturing agreement.  The
      initial purchase date has been extended to December 30,
    2008.




19





ITEM 2.
            MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS
      OF OPERATIONS





The
following discussion of our financial condition and results of operations should
be read in conjunction with the financial statements and notes thereto and the
other financial information included elsewhere in this
report.  Certain statements contained in this report, including,
without limitation, statements containing the words “believes,” “anticipates,”
“expects” and words of similar import, constitute “forward looking statements”
within the meaning of the Private Securities Litigation Reform Act of
1995.  Such forward-looking statements involve known and unknown risks
and uncertainties.  Our actual results may differ materially from
those anticipated in these forward-looking statements as a result of certain
factors, including our ability to create, sustain, manage or forecast our
growth; our ability to attract and retain key personnel; changes in our business
strategy or development plans; competition; business disruptions; adverse
publicity; and international, national and local general economic and market
conditions.




Overview




The
Company was organized under the laws of the State of Minnesota on June 28, 1996.
the Company, through the
acquisition in 1997 of a Nevada corporation acquired the trademark, patent and
exclusive marketing rights to, and has invested over one  million
dollars in the development of a grocery cart advertising display device called
the last word®, a clear
plastic display panel that attaches to the back of the child’s seat section in
supermarket shopping carts.





To
distribute this existing business of the Company following the PSF acquisition
to our stockholders, the Board of Directors of the Company has declared a
dividend, payable in common stock of our subsidiary holding our last word® technology, at the rate of one share of
common stock of this subsidiary for each share of common stock of the Company owned on the record
date. The Board of Directors of the Company has fixed May 2,
2007, as the record date for this share dividend, with a payment date as soon as
practicable thereafter.  Prior to the payment of this dividend, our
subsidiary holding the last word® technology will
have to file a registration statement under the Securities Act of 1933 with, and
have the filing declared effective by, the SEC.  We plan to file the
registration statement for this dividend as soon as practicable.





On April
24, 2007, we entered into the Share Exchange Agreement with Power Sports
Factory, Inc. (“PSF”) and the shareholders of PSF. The Share Exchange Agreement
provided for our acquiring all of the outstanding shares of PSF in exchange for
shares of the Company’s Common Stock. On May 14, 2007, we issued 60,000,000
shares of Common Stock to Steve Rubakh, the major shareholder of PSF, and on
August 31, 2007, entered into an amendment (the “Amendment”) to the Share
Exchange Agreement, that provided for a completion of the acquisition of PSF at
a closing (the “Closing”) which was held on September 5, 2007. At the Closing
the Company issued 1,650,000 shares of a new Series B Convertible Preferred
Stock (the “Preferred Stock”) to the shareholders of PSF, to complete the
acquisition of PSF by us.  Each share of Preferred Stock was converted
into 10 shares of our Common Stock following effectiveness of the 1:20 reverse
split described below.





Pursuant
to a Definitive Information Statement filed with the SEC, and stockholder
approval at a stockholders meeting on May 28, 2008, effective June 9, 2008, we
effected a 1:20 reverse split (the “Reverse Split”) of our outstanding common
stock in connection with the Share Exchange Agreement, and changed our name from
Purchase Point Media Corp. to Power Sports Factory, Inc.


20





Results
of Operations





Three Months Ended September
30, 2008 Compared to Three Months Ended September 30, 2007





During
the three months ended September 30, 2008, we incurred a net loss of $837,727,
as compared with a net loss of $812,637 for the comparable period in 2007, the
increased loss being primarily attributable to an increase in cost of sales from
approximately $330,867 in 2007 to $658,601 in 2008, and an increase in interest
expense from $11,641 for the three months ended September 30, 2007, to $39,436
for the three months ended September 30, 2008, coupled with a decrease in gross
margin from 26% in 2007 to 2% in 2008, primarily due to increases in demurrage
costs due to delayed financings.





Nine Months Ended September
30, 2008 Compared to Nine Months Ended September 30, 2007





During
the nine months ended September 30, 2008, we incurred a net loss of $2,602,164,
as compared with a net loss of $1,224,298 for the comparable period in 2007, the
increased loss being primarily attributable to an increase in selling, general
and administrative expenses from approximately $1,736,377 in 2007 to $2,921,995
in 2008, and a decrease in net sales from $2,140,543 for the nine months ended
September 30, 2007, to $2,081,750 for the nine months ended September 30, 2008,
coupled with an increase in interest expense from $56,289 in 2007 to $108,996 in
2008.





The
decrease in sales for the nine month period ended September 30, 2008, was
primarily due to inventory financing delays in the introduction of our new line
of scooters under our recently negotiated rights to the Andretti brand and the
resulting lack of adequate inventory to meet the requirements of our dealers.
For our increased inventory requirements and marketing efforts, as well as
product development, we will require substantial additional
financing.





Liquidity and Financial
Resources





Since the
acquisition of Power Sports Factory, we have operated at a loss.  We
rely significantly on the private placement of debt and equity to pay operating
expenses.





As of
September 30, 2008, the Company had $981 of cash on hand. The Company has
incurred a net loss of $2,602,164 in the nine months ended September 30, 2008,
and has working capital and stockholders' deficiencies of $3,330,499 and
$3,337,901, respectively, at September 30, 2008.  The accompanying
financial statements have been prepared assuming that the Company will continue
as a going concern.  These conditions raise substantial doubt about
the Company's ability to continue as a going concern.  The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.





During
the nine months ended September 30, 2008, we received proceeds of $250,000 from
the issuance of convertible debt and net proceeds $246,566 from the issuance of
promissory notes for debt. We will require substantial additional financing to
maintain operations at Power Sports Factory, and to expand our operations to
continue the launch of our new Andretti brand.




Critical
Accounting Policies





The
Securities and Exchange Commission recently issued "Financial Reporting Release
No.  60 Cautionary Advice Regarding Disclosure About Critical
Accounting Policies" ("FRR 60"), suggesting companies provide additional
disclosures, discussion and commentary on those accounting policies considered
most critical to its business and financial reporting
requirements.  FRR 60 considers an accounting policy to be critical if
it is important to the Company's financial condition and results of operations,
and requires significant judgment and estimates on the part of management in the
application of the policy.  For a summary of the Company's significant
accounting policies, including the critical accounting policies discussed below,
please refer to the accompanying notes to the financial
statements.


21





The
Company assesses potential impairment of its long-lived assets, which include
its property and equipment and its identifiable intangibles such as deferred
charges under the guidance of SFAS 144 "Accounting for the Impairment or
Disposal of Long-Lived Assets". The Company must continually determine if a
permanent impairment of its long-lived assets has occurred and write down the
assets to their fair values and charge current operations for the measured
impairment.




CRITICAL
ACCOUNTING ISSUES




The
Company's discussion and analysis of its financial condition and results of
operations are based upon the Company's financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of the financial statements, requires
the Company to make estimates and judgments that effect the reported amount of
assets, liabilities, and expenses, and related disclosures of contingent assets
and liabilities. On an on-going basis, the Company evaluates its estimates,
including those related to intangible assets, income taxes and contingencies and
litigation. The Company bases its estimates on historical experience and on
various assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about 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.





NEW
FINANCIAL ACCOUNTING STANDARDS




In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles” (“SFAS No. 162”).  SFAS No. 162 identifies the
sources of accounting principles and the framework for selecting the principles
to be used in the preparation of financial statements of nongovernmental
entities that are presented in conformity with generally accepted accounting
principles (GAAP) in the United States.  This Statement is effective sixty
days following the SEC’s approval of the Public Company Accounting Oversight
Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity
With Generally Accepted Accounting Principles.”  The Company is currently
evaluating the potential impact, if any, of the adoption of SFAS No. 162 on its
financial statements.




In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
and Hedging Activities”, an amendment of FASB Statement No. 133 (“SFAS No.
161”).  The new standard is intended to improve financial reporting about
derivative instruments and hedging activities by requiring enhanced disclosures
to enable investors to better understand their effects on an entity’s financial
position, financial performance and cash flows.  It is effective for
financial statements issued for fiscal years and interim periods beginning after
November 15, 2008.  The Company does not believe that SFAS No. 161 will
have a material impact on its financial statements.




In
February 2008, the FASB issued FASB Staff Position SFAS 157-1, “Application
of SFAS No. 157 to SFAS No. 13 and Its Related Interpretative Accounting
Pronouncements that Address Leasing Transactions” (“FSP SFAS 157-1”) and FASB
Staff Position SFAS 157-2, “Effective Date of SFAS No. 157” (“FSP SFAS
157-2”). FSP SFAS 157-1 excludes SFAS No. 13 and its related interpretive
accounting pronouncements that address leasing transactions from the
requirements of SFAS No. 157, with the exception of fair value measurements of
assets and liabilities recorded as a result of a lease transaction but measured
pursuant to other pronouncements within the scope of SFAS No. 157. FSP SFAS
157-2 delays the effective date of SFAS No. 157 for all nonfinancial assets and
nonfinancial liabilities, except those that are recognized or disclosed at fair
value in the financial statements on a recurring basis (at least annually). FSP
SFAS 157-1 and FSP SFAS 157-2 became effective for the Company upon adoption of
SFAS No. 157 on January 1, 2008. The Company will provide the additional
disclosures required relating to the fair value measurement of nonfinancial
assets and nonfinancial liabilities when it fully implements SFAS No. 157 on
January 1, 2009, as required, and does not believe they will have a significant
impact on its financial statements.


22




ITEM
3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.





We are
primarily exposed to foreign currency risk, interest rate risk and credit
risk.





Foreign
Currency Risk - We import products from China into the United States and market
our products in North America. As a result, our financial results could be
affected by factors such as changes in foreign currency exchange rates or, if we
initiate our planned international operations, weak economic conditions in
foreign markets. Because our revenues are currently denominated in U.S. dollars,
a strengthening of the dollar could make our products less competitive in
foreign markets that we plan to enter.  If the Chinese Yuan
strengthened against the dollar, our cost of imported products could increase
and make us less competitive.  We have not hedged foreign currency
exposures related to transactions denominated in currencies other than U.S.
dollars. We do not engage in financial transactions for trading or speculative
purposes.





Interest
Rate Risk - Interest rate risk refers to fluctuations in the value of a security
resulting from changes in the general level of interest rates. Investments that
are classified as cash and cash equivalents have original maturities of three
months or less. Our interest income is sensitive to changes in the general level
of U.S. interest rates.  We do not have significant short-term
investments, and due to the short-term nature of our investments, we believe
that there is not a material risk exposure.





Credit
Risk - Our accounts receivables are subject, in the normal course of business,
to collection risks. We regularly assess these risks and have established
policies and business practices to protect against the adverse effects of
collection risks. As a result we do not anticipate any material losses in this
area.




ITEM
4T.    CONTROLS AND PROCEDURES.





The
Company's Chief Executive Officer and its Chief Financial Officer are primarily
responsible for the accuracy of the financial information that is presented in
this quarterly Report.  These officers have as of the close of the
period covered by this Quarterly Report, evaluated the Company's disclosure
controls and procedures (as defined in Rules 13a-4c and 15d-14c promulgated
under the Securities Exchange Act of 1934) and determined that such controls and
procedures were effective in ensuring that material information relating to the
Company was made known to them during the period covered by this Quarterly
Report.  In their evaluation, no changes were made to the Company's
internal controls in this period that have materially affected, or are
reasonably likely materially to affect, the Company’s internal control over
financial reporting.





PART
II—OTHER INFORMATION





Item
1.                      LEGAL
PROCEEDINGS.





None.




ITEM
1A.                 RISK
FACTORS.





In
addition to the other information set forth in this Quarterly Report on Form
10-Q, there are material risks in addition to the risk factors previously
disclosed in our amended Annual Report on Form 10-K, filed with the Securities
and Exchange Commission on August 18, 2008, which additional risk factors are
relevant to and should be considered in connection with an evaluation of our
business.  These additional risks are as follows.




23





Some
of our customers rely on financing with third parties to purchase our
products.





We rely
on sales of our products to distributors and customers to generate cash from
operations. A significant portion of our sales are financed by third party
finance companies on behalf of our customers. The availability of financing by
third parties is affected by general economic conditions and the credit
worthiness of our customers. Deterioration in the credit quality of our
customers could negatively impact the ability of our customers to obtain the
financing they need to make purchases of our products. Given the current
economic conditions, and the more limited liquidity in our credit markets, there
can be no assurance that third party finance companies will continue to extend
credit to our customers as they have in the past. These economic conditions
could have a material adverse effect on demand for our products and on our
financial condition and operating results.




Our
business is affected by the cyclical nature of the markets we
serve.




Demand
for our products depends upon general economic conditions in the markets in
which we compete. Our sales depend in part upon our customers’ new purchases in
favor of continuing to use or repairing existing transportation. Downward
economic cycles may result in reductions in sales of our products, which may
reduce our profits. Additionally we see a significant correlation between the
demand for our product and the price of gasoline.  There can be no
assurance that we will be able to maintain or increase our sales volume given
the negative impact of the recent deterioration in economic
conditions.




We
could face limitations on our ability to access the capital
markets.




Our
ability to access the capital markets to raise funds through the sale of equity
or debt securities is subject to various factors, including general economic
and/or financial market conditions. The current conditions of the financial
markets have adversely affected the availability of credit and liquidity
resources and our access to capital markets is severely limited until stability
re-emerges in these markets.





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





Not
applicable





ITEM
3.                      DEFAULTS
UPON SENIOR SECURITIES.





Not
applicable.





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





Not
applicable.





ITEM
5.                      OTHER
INFORMATION.





Not
applicable.





ITEM
6.  EXHIBITS.




31.1
              Certification
      of Chief Executive Officer Pursuant to Section 302 of The Sarbanes Oxley
      Act of 2002.31.2
              Certification
      of Chief Financial Officer Pursuant to Section 302 of The Sarbanes Oxley
      Act of 2002.32.1
              Certification
      of Chief Executive Officer Pursuant to
      18  U.S.C.  Section  1350 as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Oxley Act of
      2002.32.2
              Certification
      of Chief Financial Officer Pursuant to
      18  U.S.C.  Section  1350 as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Oxley Act of
      2002.


24





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.





POWER
      SPORTS FACTORY, INC.(Registrant)By:
              /s/  Shawn
    LandgrafShawn
      Landgraf, Chief Executive
Officer





Dated:
December 19, 2008





EXHIBIT
INDEX





Exhibit Number
                  
                  Description31.1
                  
                  Certification  of
      Chief Executive Officer Pursuant to Section 302 of the
      Sarbanes  Oxley Act of 2002.31.2
                  
                  Certification  of
      Chief Financial Officer Pursuant to Section 302 of the
      Sarbanes  Oxley Act of 2002.32.1
                  
                  Certification
      of Chief Executive Officer Pursuant to
      18  U.S.C.  Section  1350 as adopted
      pursuant to Section  906 of the Sarbanes-Oxley Oxley Act of
      2002.32.2
                  
                  Certification
      of Chief Financial Officer Pursuant to
      18  U.S.C.  Section  1350 as adopted
      pursuant to Section  906 of the Sarbanes-Oxley Oxley Act of
      2002.




25