UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-Q









x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE QUARTERLY PERIOD ENDED June 30, 2010o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





Commission file No. 333-144597





TEAM NATION HOLDINGS CORPORATION


(Exact name of registrant as specified in charter)


Nevada
98-0441861(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)4667 MacArthur Boulevard, Suite 310, Newport Beach, CA
92660(Address of principal executive offices)
(Zip Code)





Registrant’s telephone number, including area code:949 885 9892





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





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  o  No  o





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.




Large accelerated filero
Accelerated fileroNon-accelerated filero
Smaller reporting companyx





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





As of August 13, 2010, there were 163,415,923 shares of the registrant’s common stock, $.001 par value, outstanding.





Table of Contents







Team Nation Holdings Corporation


FORM 10-Q


For the Quarterly Period Ended June 30, 2010





TABLEOF CONTENTS


PART 1 — FINANCIAL INFORMATIONItem 1.
Financial Statements (unaudited):
3Consolidated Balance Sheets as of June 30, 2010 and December 31, 2009
4Consolidated Statements of Operations for the Three and Six Month Periods ended June 30, 2010 and 2009
5Consolidated Statements of Cash Flows for the Six Month Period ended June 30, 2010 and 2009
6Notes to the Unaudited Consolidated Financial Statements
8Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
29Item 3.
Quantitative and Qualitative Disclosures About Market Risk
31Item 4.
Controls and Procedures
31PART II — OTHER INFORMATIONItem 1.
Legal Proceedings
32Item 1A.
Risk Factors
32Item 2
Unregistered Sales of Equity Securities and Use of Proceeds
32Item 3
Default on Senior Securities
32Item 4
Submission of Matters to Vote of Securities Holders
32Item 5.
Other Information
32Item 6.
Exhibits
33SIGNATURES
34





Table of Contents





ITEM1. FINANCIAL STATEMENTS


Team Nation Holdings Corporation
 Condensed Financial Statements
 
 As of June 30, 2010 and December 31, 2009 and
 For the Three and Six Month Periods Ended June 30, 2010 and 2009
  
 Condensed Financial Statements of Team Nation Holdings Corporation:Condensed Balance Sheets as of June 30, 2010 (unaudited) and December 31, 2009
4Condensed Statements of Operations for the Three and Six Month Periods ended June 30, 2010 and 2009 (unaudited)
5Condensed Statements of Cash Flows for the Six Month Period ended June 30, 2010 and 2009 (unaudited)
6Notes to the Condensed Financial Statements
8
 
 
 3
 Table of Contents
  TeamNation Holdings Corporation
 Condensed Balance Sheets
 As of June 30, 2010 and December 31, 2009
 
 June 30,


December 31,2010


2009(unaudited)ASSETSCurrent assets:Cash and cash equivalents


-


$
19,029Due from affiliates


-



313,321Prepaid expenses

$
7,016



-Total current assets


7,016



332,350Notes receivable related party


2,245,507



2,261,350Accrued interest on JMJ note receivable


14,715



2,804Title plant


710,000



710,000Software and leasehold improvements, net of accumulated depreciation of $19,446 and $8,500


46,504



52,515Deposits


27,628



27,030Total assets

$
3,051,370


$
3,386,049LIABILITIES AND SHAREHOLDER'S DEFICITCurrent liabilities:Bank overdraft

$
19,485



-Accounts payable trade


644,245


$
693,275Accounts payable of abandoned discontinued ops


5,569



5,569Related party convertible payable obligations


-



182,673Affiliate payable


457,055



-Accrued liabilities


79,068



119,314Current portion of financing agreement


138,455



104,882Current portion of note payable


56,862



-Convertible debt obligation, net of discount of $441,774 and $982,051


454,736



97,458Derivative liability


2,898,134



4,206,376Total current liabilities


4,753,609



5,409,547Financing agreement, net of current portion


2,547,648



2,645,118Convertible note payable, net of discount of $477,372 and $576,460


107,328



23,540Note payable, net of current portion


47,415



76,134Accrued interest


14,839



2,839Total liabilities


7,470,839



8,157,178Commitments and contingencies (Note 13)Shareholder's deficit:Preferred stock ($0.001 stated value, 60 shares authorized and 60 shares outstanding)


-



-Common stock ($0.001 stated value, 1,000,000,000 shares authorized, 114,700,247 and

67,901,401 shares issued and outstanding)


114,700



67,901Additional paid in capital


1,767,540



1,566,039Stock subscription receivable


(450,000
)


(450,000
)Accumulated deficit


(5,851,709
)


(5,955,069
)Total shareholder's deficit


(4,419,469
)


(4,771,129
)Total liabilities and shareholder's deficit

$
3,051,370


$
3,386,049
 The accompanying notes are an integral part of the financial statements.
  4
 Table of Contents
  TeamNation Holdings Corporation
 Condensed Statements of Operations
 Unaudited
 For the Three and Six Month Periods Ended June 30, 2010 and 2009
 
  For the


For the


For the


For theThree Month


Three Month


Six Month


Six MonthPeriod Ended


Period Ended


Period Ended


Period EndedJune 30,


June 30,


June 30,


June 30,2010


2009


2010


2009Management fees related party

$
394,680


$
552,660


$
762,480


$
1,114,980Management fees


-



30,000



-



60,000Joint marketing


-



-



824



-Total revenue


394,680



582,660



763,304



1,174,980Operating expenses:Title plant feesSearch fees


168,755



222,739



371,278



497,587Processing and general


128,895



145,630



283,123



269,019General and administrative


371,379



413,477



709,324



623,919Related party management fees


-



-



100,800



-Customer service expenses


5,006



62,296



21,216



127,295Selling expenses


19,609



-



57,196



3,282Total operating expenses


693,644



844,142



1,542,937



1,521,102Operating loss


(298,964
)


(261,482
)


(779,633
)


(346,122
)Other expense (income):Interest income


(5,978
)


(1,235
)


(11,911
)


(1,235
)Interest income related party


(16,079
)


(15,696
)


(32,157
)


(31,198
)Interest expense


41,125



76,896



69,157



151,246Debt forgiveness related party


(241,649
)


-



(241,649
)


-Accretion of debt discount


321,449



-



639,365



-Derivative liability income


(474,762
)


-



(1,308,242
)


-Income (loss) from continuing operations before provision for income taxes


76,930



(321,467
)


105,804



(464,935
)Provision for income taxes


1,643



-



2,443



-Income from continuing operations


75,287



(321,467
)


103,361



(464,935
)Loss from discontinued operations


-



(3,872
)


-



(7,790
)Net income

$
75,287


$
(325,339
)

$
103,361


$
(472,725
)Income (loss) per share from continuing operations:Basic

$
0.00


$
(0.01
)

$
0.00


$
(0.01
)Diluted

$
0.00


$
(0.01
)

$
0.00


$
(0.01
)Loss per share from discontinued operations:Basic

$
0.00


$
0.00


$
0.00


$
0.00Diluted

$
0.00


$
0.00


$
0.00


$
0.00Net income (loss) per share:Basic

$
0.00


$
(0.01
)

$
0.00


$
(0.01
)Diluted

$
0.00


$
(0.01
)

$
0.00


$
(0.01
)Weighted average shares outstanding:Basic


95,256,369



47,191,894



85,523,301



47,191,894Diluted


524,428,854



47,191,894



313,453,004



47,191,894
 
 The accompanying notes are an integral part of the financial statements.
  5
 Table of Contents
  TeamNation Holdings Corporation
 Condensed Statements of Cash Flows
 For the Six Month Periods Ended June 30, 2010 and 2009
 
  For the


For theSix Month


Six MonthPeriod Ended


Period EndedJune 30, 2010


June 30, 2009(unaudited)


(unaudited)Cash flows from (used in) operating activities:Net income (loss)

$
103,361


$
(472,725
)Loss from discontinued operations


-



(7,790
)Income (loss) from continuing operations


103,361



(464,935
)Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:Reserve for doubtful accounts receivable


-



60,000Depreciation


10,946



78Shares issued for services


10,000



-Debt discount accretion


639,365



-Derivative liability expense


(1,308,242
)


-Gain on debt forgiveness from related parties


241,649



-Directors fees used to satisfy notes receivable


48,000



-Decrease (increase) in assets:Accounts receivable


-



(48,960
)Prepaid expenses


(7,016
)


(51,410
)Due from affiliates


313,321



(31,197
)Deposit


(598
)


(26,530
)Increase (decrease) in liabilities:Accounts payable


(6,942
)


(139,079
)Accrued liabilities


(40,246
)


165,752Due to affiliate


457,055



-Convertible related party debt obligations


(384,322
)


-Due to affiliate


-



542,730Cash from (used in) operating activities continuing operations


76,331



(1,341
)Cash used in operating activities discontinued operations


-



(146
)Cash from (used in) operating activities


76,331



(1,487
)Cash flows used in investing activities:Purchase of software and improvements


(4,935
)


-Accrued interest on related party notes receivable


(32,157
)


-Accrued interest on stock subscription receivable


(11,911
)


(1,367
)Cash used in investing activities continuing operations


(49,003
)


(1,367
)Cash used in investing activities discontinued operations


-



737Cash used in investing activities


(49,003
)


(630
)
 The accompanying notes are an integral part of the financial statements.
  6
 Table of Contents
  Team Nation Holdings Corporation
 Condensed Statements of Cash Flows
 For the Six Month Periods Ended June 30, 2010 and 2009
 
   Cash flows used in financing activities:Restricted cash


-



(1,236
)Sale of common stock


-



13,082Repayment of related party payable


-



(13,958
)Payments made on financing agreement


(63,897
)


-Payments made on note payable


(13,945
)


-Bank overdraft


19,485



-Accrued interest on convertible debt obligation


12,000



-Cash used in financing activities continuing operations


(46,357
)


(2,112
)Cash used in financing activities discontinued operations


-



-Cash used in financing activities


(46,357
)


(2,112
)Net decrease in cash


(19,029
)


(4,229
)Cash and cash equivalents at beginning of period


19,029



4,296Cash and cash equivalents at end of period

$
-


$
67
 Supplemental Disclosure of Cash Flow InformationFor the


For theSix Month


Six MonthPeriod Ended


Period EndedJune 30,


June 30,2010


2009(unaudited)


(unaudited)Cash paid during the fiscal years for:Interest

$
57,157


$
373Income taxes

$
800


$
-Schedule of Non cash Financing ActivitiesCommon stock used to satisfy related party convertible payable obligations

$
40,000


$
-Common stock used to satisfy convertible debt obligation

$
183,000


$
-
  The accompanying notes are an integral part of the financial statements.
 7
 Table of Contents
  TeamNation Holdings Corporation
 Notes to the Condensed Financial Statements
 As of June 30, 2010 and December 31, 2009 and
 For the Three and Six Month Periods Ended June 30, 2010 and 2009
 
  1.        Description of Business and Nature of Presentation
  The condensed balance sheet as of December 31, 2009, which has been derived from audited financial statements, and the unaudited interim condensed financial statements as of June 30, 2010, have been prepared following the requirements of the Securities and Exchange Commission (SEC) for interim reporting.
  TEAM Nation Holdings Corporation (the “Company”) (“TEAM”), a Nevada corporation, is a management and services company specializing in management solutions for title companies and title production services. TEAM provides management, title plant and production services, customer service, sales and marketing support, HR administration, IT administration and accounting services to a title company in exchange for order-based fees.
  Certain reclassifications have been made to prior-period amounts to conform to current presentation. Management is responsible for the unaudited financial statements included in this document.  The financial statements include all normal and recurring adjustments that are considered necessary for the fair presentation of the Company's financial position and operating results.  The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2009.
  Preparing the Company's financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
  2.        Significant Accounting Policies
  Cash and cash equivalents
  The Company considers all cash on hand, cash in banks and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents.  At June 30, 2010, the Company does not have any cash equivalents.
  8
 Table of Contents
 Team Nation Holdings Corporation
 Notes to the Condensed Financial Statements
 As of June 30, 2010 and December 31, 2009 and
 For the Three and Six Month Periods Ended June 30, 2010 and 2009
 Concentration of Credit Risk for Cash Deposits at Banks
  Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. At June 30, 2010 and December 31, 2009, the Company did not have any funds on deposit in excess of FDIC insured limits.
  Revenue recognition
  TEAM’s revenue is derived from management and production services.  Revenue from services is recognized when the service is performed.
  Trade Accounts Receivable and Allowance for Doubtful Accounts
  Trade accounts receivable are stated at the amount the Company expects to collect. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments (Note 6). Management considers the following factors when determining the collectability of specific customer accounts: customer credit-worthiness, past transaction history with the customer, current economic industry trends, and changes in customer payment terms. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. Based on management’s assessment, the Company provides for estimated uncollectible amounts through a charge to earnings and a credit to a valuation allowance. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable.  The Company wrote off all trade receivables as of December 31, 2009 and did not reserve any receivables during the six month period ended June 30, 2010.
  Fair value of financial instruments
  The Company measures fair value based on the prices that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are based on a three tier hierarchy that prioritizes the inputs used to measure fair value. These tiers include:
  Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
  Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.
  Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.
  9
 Table of Contents
  Team Nation Holdings Corporation
 Notes to the Condensed Financial Statements
 As of June 30, 2010 and December 31, 2009 and
 For the Three and Six Month Periods Ended June 30, 2010 and 2009
 The carrying values of our cash and beneficial conversion feature derivative liability carried at fair value as of June 30, 2010 and December 31, 2009, are classified in the table below in one of the three categories described above:
  Fair Value at June 30, 2010 and December 31, 2009Level 1


Level 2


Level 3


TotalJune 30, 2010:Cash and cash equivalents

$
0



-



-



-Derivative liability


-



-


$
2,898,134


$
2,898,134December 31, 2009:Cash and cash equivalents

$
19,029


$
(1,121,512
)


-


$
(1,102,483
)Derivative liability


-



-


$
693,644


$
693,644
 Advertising
  Advertising expense was $265 for the six month period ended June 30, 2009.  There was no advertising expense for the three or six month periods ended June 30, 2010 or the three month period ended June 30, 2009.
  Software and Improvements
  Software and improvements are recorded at cost and are depreciated using the straight-line method over their expected useful lives. Expenditures for normal maintenance and repairs are charged to income, and significant improvements are capitalized. Upon the sale or retirement of software and improvements, the accounts are relieved of the cost and the related accumulated depreciation or amortization, with any resulting gain or loss included in the statement of operations.
  EstimatedUseful LivesSoftware
3 yearsBuilding improvements
lesser of useful life or lease term
  Intangible costs
  Intangible assets with indefinite useful lives are not amortized, but instead tested annually for impairment.  Intangible assets with definite useful lives are amortized over that period to their estimated residual value, and are also reviewed for impairment.
  10
 Table of Contents
  Team Nation Holdings Corporation
 Notes to the Condensed Financial Statements
 As of June 30, 2010 and December 31, 2009 and
 For the Three and Six Month Periods Ended June 30, 2010 and 2009
 New Accounting Pronouncements
  There are several new accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”) which are not yet effective.  Each of these pronouncements, as applicable, has been or will be adopted by the Company.  Management does not believe any of these accounting pronouncements has had or will have a material impact on the Company’s financial position or operating results.
  In June 2009, the FASB established the FASB Accounting Standards Codification (“the Codification” or “ASC”) as the official single source of authoritative U.S. generally accepted accounting principles (“GAAP”). All guidance contained in the Codification carries an equal level of authority. All existing accounting standards are superseded. All other accounting guidance not included in the Codification will be considered non-authoritative. The Codification also includes all relevant SEC guidance organized using the same topical structure in separate sections within the Codification. The Codification is not intended to change GAAP, but it will change the way GAAP is organized and presented. The Codification is effective for financial statements issued for interim and annual periods ending after September 15, 2009. Except for the disclosure requirements, the adoption of this statement did not have an impact on the determination or reporting of the Company’s financial statements. The Company is providing the Codification cross-reference alongside the references to the standards issued and adopted prior to the adoption of the Codification.
  In June 2009, the FASB issued guidance for accounting for transfers of financial assets and eliminates the exemption from consolidation for qualifying special-purpose entities. This statement is effective for financial asset transfers occurring after the beginning of an entity’s first fiscal year that begins after November 15, 2009. This statement is not expected to have any impact on our financial position or results of operations.
  In May 2009, the FASB established general standards of accounting for disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. In particular, this statement sets forth (1) the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements; (2) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements; and (3) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. This statement is effective for interim or annual periods ending after June 15, 2009 and we adopted it on April 1, 2009.
  11
 Table of Contents
 Team Nation Holdings Corporation
 Notes to the Condensed Financial Statements
 As of June 30, 2010 and December 31, 2009 and
 For the Three and Six Month Periods Ended June 30, 2010 and 2009
 In April 2009, the FASB issued guidance to determine fair value when the volume and level of activity for the asset or liability have significantly decreased and identifying transactions are not orderly. If an entity determines that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value. This standard is effective for interim and annual periods ending after June 15, 2009 and must be applied prospectively.  The adoption of this standard no material impact on the Company’s financial statements.
  In January 2010, the FASB issued updated guidance related to fair value measurements and disclosures, which requires a reporting entity to disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and to describe the reasons for the transfers. The updated guidance also requires that an entity should provide fair value measurement disclosures for each class of assets and liabilities and disclosures about the valuation techniques and inputs used to measure fair value for both recurring and non-recurring fair value measurements for Level 2 and Level 3 fair value measurements. This updated guidance became effective for interim or annual financial reporting periods beginning after December 15, 2009. Except for the disclosure requirements, the adoption of this statement did not have an impact on the Company’s condensed financial statements.
  In February 2010, the FASB issued updated guidance which amended the subsequent events disclosure requirements to eliminate the requirement for SEC filers to disclose the date through which it has evaluated subsequent events, clarify the period through which conduit bond obligors must evaluate subsequent events and refine the scope of the disclosure requirements for reissued financial statements. The updated guidance was effective upon issuance. Except for the disclosure requirements, the adoption of the guidance had no impact on the Company’s condensed financial statements.
  3.        Discontinued Operations
  In May 2007 we formed two subsidiaries: Escrow Nation, Inc. (“Escrow”) and Mortgage Nation, Inc. (“Mortgage”).  Escrow was licensed to transact escrow business by the California Department of Corporations and Mortgage was licensed to provide mortgage broker services.  In December 2007, we decided to discontinue the operations of both Escrow and Mortgage as a result of the significant downturn in the California housing market.  In December 2009, these entities were abandoned and liabilities were assumed by the Company.  We recognized losses of $3,872 and $33,631 from the discontinued operations for the three and six month periods ended June 30, 2009, respectively.
  12
 Table of Contents
  Team Nation Holdings Corporation
 Notes to the Condensed Financial Statements
 As of June 30, 2010 and December 31, 2009 and
 For the Three and Six Month Periods Ended June 30, 2010 and 2009
 The accompanying table illustrates the reporting of the discontinued operations on the face of the Statements of Operations for the three and six month periods ended June 30, 2009.
  For the Three Month PeriodEnded June 30, 2009ESCROW


MORTGAGE


TotalRevenues


-



-



-Costs and expenses:Selling, general and administrative


-


$
368


$
368Shutdown expense

$
3,395



-



3,395Interest expense


109



-



109Loss from discontinued operations

$
(3,504
)

$
(368
)

$
(3,872
)
  For the Six Month PeriodEnded June 30, 2009ESCROW


MORTGAGE


TotalRevenues


-



-



-Costs and expenses:Selling, general and administrative


-


$
736


$
736Shutdown expense

$
6,790



-



6,790Interest expense


264



-



264Loss from discontinued operations

$
(7,054
)

$
(736
)

$
(7,790
)
 4.        Related Party Transactions
  Relationship With Affiliate - CalCounties Title Nation
  TEAM's only revenue source from July 1, 2009 going forward is from its vendor services agreement with CalCounties Title Nation ("CCTN"), which is a Southern California title company operated by TEAM's officers and directors.  In 2007, TEAM, as a private company, lent its officers and directors the funds which were used to buy CCTN.  TEAM is dependent on CCTN for working capital advances and its only source of revenue.  If CCTN were unable to continue to provide working capital advances or revenue, TEAM would not be able to survive.  TEAM is a variable interest of CCTN, but CCTN is not a variable interest of TEAM.  As such, the financial statements of TEAM presented herein have not been consolidated with the financial statements of CCTN.  CCTN's financial statements as of June 30, 2010 (unaudited) and December 31, 2009 (audited by another firm) and for the three and six months ended June 30, 2010 and 2009 (unaudited) and are summarized as follows:
  13
 Table of Contents
  Team Nation Holdings Corporation
 Notes to the Condensed Financial Statements
 As of June 30, 2010 and December 31, 2009 and
 For the Three and Six Month Periods Ended June 30, 2010 and 2009
 As of


As ofJune 30,


December 31,2010


2009(unaudited)Current assets

$
3,375,321


$
3,938,971Total assets

$
4,753,164


$
5,153,659Current liabilities

$
1,904,269


$
2,548,060Total liabilities

$
2,646,521


$
2,934,295Stockholders' equity

$
2,106,643


$
2,219,364
 
  For the


For the


For the


For theThree Month


Three Month


Six Month


Six MonthPeriod Ended


Period Ended


Period Ended


Period EndedJune 30,


June 30,


June 30,


June 30,2010


2009


2010


2009(unaudited)


(unaudited)


(unaudited)


(unaudited)Total operating revenues

$
2,924,041


$
3,584,586


$
5,500,572


$
5,998,274Total operating expenses

$
2,747,321


$
3,586,617


$
5,173,245


$
6,278,870Net income

$
473,362


$
15,440


$
644,056


$
(263,107
)
 Due To/From Affiliate
  The components of the amounts due to/from CCTN for the six month period ended June 30, 2010 is as follows:
  Due from CCTN, December 31, 2009

$
313,321Satisfaction of amounts owed by CCTN for the vendor services agreement


762,480Operating capital advances from CCTN to TEAM


(1,543,757
)Operating capital advances from TEAM to CCTN


120,461Sublease payments from CCTN to TEAM


42,448Sublease payments from TEAM to CCTN


(53,985
)TEAM assumption of CCTN invoices


(98,023
)Due to CCTN, June 30, 2010

$
(457,055
)
 14
 Table of Contents
  Team Nation Holdings Corporation
 Notes to the Condensed Financial Statements
 As of June 30, 2010 and December 31, 2009 and
 For the Three and Six Month Periods Ended June 30, 2010 and 2009
 Notes Receivable – Related Party
  On May 31, 2007, the Company lent its 4 officers and directors a total of $2,600,000 in exchange for notes receivable from each director.  The notes receivable consist of four notes in the original amount of $650,000 each which were non-interest bearing until May 31, 2008 and interest only payable at the rate of 5% per annum until the notes receivable are due in full on May 1, 2014.  On November 10, 2009, the agreements were amended, calling for interest only payments to commence January 1, 2011.  On June 1, 2008, the Company lent its 4 officers and directors a total of $1,000,000 in exchange for notes receivable from each director.  The notes receivable consist of four notes in the original amount of $250,000 each, bearing interest at 4.62% per annum.  There were no payments due until June 1, 2010, at which point interest only payment are due at the rate of 5% per annum until the notes receivable are due in full on June 1, 2015.  On November 10, 2009, the agreements were amended, calling for interest only payments to commence January 1, 2011.  The total notes receivable balance, including accrued interest, at June 30, 2010, from its four officers and directors was $2,245,507.  The funds were used by the officers and directors to purchase and fund CCTN.
  During the six month periods ended June 30, 2010 and 2009, the notes receivable accrued interest of $32,157 and  $31,197 respectively.  Beginning April 1, 2010, the Company begain paying its 4 directors $4,000 per month for director fees.  Directors fees totaling $48,000 were used to pay accrued interest on the notes receivable.
  Management Agreements
  Management fee revenues
  On January 2, 2008, TEAM entered into a management agreement with CCTN to manage all of their operations.  TEAM provides management, title plant and production services, customer service, sales and marketing support, HR administration, IT administration and accounting services to CCTN for a monthly management fee plus a share of net profits, determined on a calendar quarterly basis.  This agreement was amended as of January 1, 2009 to change the monthly fee from a flat fee of $100,000 per month to a semi-variable fee of $40,000 per month plus $60 per open title order.  Management fee revenue from CCTN was $394,680, $762,480, $552,660 and $1,114,980 for the three and six month periods ended June 30, 2010 and 2009, respectively, and is reported as related party management fees in the statement of operations.  Title plant fees were $168,755, $371,278, $222,759 and $497,587 for the three and six month periods ended June 30, 2010 and 2009, respectively.
  15
 Table of Contents
  Team Nation Holdings Corporation
 Notes to the Condensed Financial Statements
 As of June 30, 2010 and December 31, 2009 and
 For the Three and Six Month Periods Ended June 30, 2010 and 2009
 Management fee expenses
  On July 1, 2009, the Company entered into management agreements with affiliates of two of the officers and directors by which they would actively manage operations, human resources, accounting services, sales, and marketing efforts for TEAM, each at a cost of $25,200 per month per agreement.  Total management fee expenses were $0 and $100,800 for the three and six month periods ended June 30, 2010. The management fee agreements were terminated February 28, 2010.
  Modification of Payables
  On November 3, 2009, the Company modified the terms of the management fee payables owed to the four officers and directors which made the payables convertible into shares of the Company's common stock at 60% of the average of the prior 5 day closing price. The payables are due on demand and fully transferable.
  Forgiveness of Management Fees Payable
  During the three month period ending June 30, 2010, the related party companies forgave all accrued management fee amounts owed to them resulting in a gain of $241,649.
  Shares Issued
  As discussed in note 12, in July 2009, the Company issued 14,109,338 shares of its common stock to its four officers and directors for $423,280 in certificates of deposit which were taken by Professional Business Bank to reduce the line of credit.  The outstanding balance of the line of credit became due in July 2009 and the Company defaulted.  The officers and directors had guaranteed the line of credit with personal certificates of deposit.  As a result, Professional Business Bank called the guarantee to reduce the debt.
  In two November 2009 transactions, Sunderland Capital, LLC (Sunderland) bought and converted a total of $20,000 of the Company's convertible related party payable.  In each transaction, Sunderland converted the $10,000 tranche into 666,665 shares of the Company's common stock at $0.015 per share, a 40% discount to the prior 5 days closing average.
  In three December 2009 transactions, Eventus bought and converted a total of $30,000 of the Company's convertible related party payable.  In each transaction, Eventus converted the $10,000 tranche into shares of the Company's common stock at a 40% discount to the prior 5 days closing average.  A total of 1,942,210 shares of the Company's common stock were issued in the three transactions.
  16
 Table of Contents
 
 Team Nation Holdings Corporation
 Notes to the Condensed Financial Statements
 As of June 30, 2010 and December 31, 2009 and
 For the Three and Six Month Periods Ended June 30, 2010 and 2009
 On December 23, 2009, the Company issued its four officers and directors each 15 shares of Series A Convertible Preferred Stock of the Company for total consideration of $60,000.  Each share of Series A Convertible Preferred Stock is convertible into 1% of the Company's common stock at the date of conversion.  The preferred shares do not have liquidation preference over common shares.  Each preferred share is entitled to as many votes equal to 1% of the Company's outstanding common stock.
  In four February 2010 transactions, Eventus bought and converted a total of $40,000 of the Company's convertible related party payable.  In each transaction, Eventus converted the $10,000 tranche into shares of the Company's common stock at a 40% discount to the prior 5 days closing average.  A total of 3,716,112 shares of the Company's common stock were issued in the four transactions.
  Subleases
  TEAM has entered into subleases with CCTN.  TEAM leases office space from CCTN in Pasadena, CA and CCTN leases space from TEAM in Newport Beach, CA. TEAM pays CCTN 50% of its lease expense for the Pasadena office, which amounts to $8,998 per month. CCTN pays TEAM 80% of its lease expense for the Newport Beach office which amounts to $7,075 per month. These transactions are booked through affiliate receivable/payable accounts.  See Note 13 for the Company's minimum lease obligations.
  TEAM's sublease expense to CCTN
 
 2010 (remainder of year)

$
53,9852011


-2012


-2013


-2014 and thereafter


-Total minimum lease payments

$
53,985
  TEAM's sublease revenue from CCTN
  2010 (remainder of year)

$
42,4482011


84,8952012


17,6872013


-2014 and thereafter


-Total minimum sublease revenue

$
145,030
 
 17
 Table of Contents
  Team Nation Holdings Corporation
 Notes to the Condensed Financial Statements
 As of June 30, 2010 and December 31, 2009 and
 For the Three and Six Month Periods Ended June 30, 2010 and 2009
 5.        Uncollectible Amount and Related Settlement Gain
  In December 2007, TEAM entered into a management agreement with FirstSouthwestern Title Company ("FIRST"), which was a title company with operations in Southern California, to manage all of their operations. FIRST owed TEAM $470,895 for fees work performed under the management agreement through July 2009.  In July 2009, FIRST received notice from the Department of Insurance that they wanted FIRST to voluntarily turn over their license to do business in California due to insufficient working capital and net worth, which ownership of FIRST agreed to.  At that time, TEAM's management agreement with FIRST was terminated, and the unpaid management fee receivable was uncollectible and the amount was fully reserved.  In agreement with the management of FIRST, $261,279 was reduced from the reserve as it was identified as an offset against an amount due FIRST from CCTN.  The amount in excess of 2009 FIRST revenue, $191,279, was recognized as other income.  CCTN agreed to the right of offset of the amount.  The remaining $457,817 owed by FIRST was written off as uncollectible as of December 31, 2009.
  6.        Note Receivable (In-Substance Stock Subscription)
  On November 18, 2009, the Company entered into a financing arrangement with JMJ Financial ("JMJ"), an unrelated third-party.  The financing arrangement consists of a $600,000 convertible note payable to JMJ ("JMJ Note Payable) in consideration for a $500,000 secured and collateralized note receivable from JMJ (JMJ Note Receivable).  The financing arrangement is designed for JMJ to convert the JMJ Note Payable, in tranches, into TEAM common stock and pay down the JMJ Note Receivable with cash.  See Note 9 for details of the JMJ Note Payable.  Since the JMJ Note Receivable is in-substance a stock subscription, the Company has recorded the JMJ Note Receivable as a reduction of equity rather than an asset.
  The $500,000 JMJ Note Receivable, dated November 18, 2009, is due November 18, 2012.  The JMJ Note Receivable bears interest at a rate of 14.4% with no discount allowed for early principal reductions.  All interest and principal payments are due on the maturity date.  Principal and interest may be prepaid without penalty.  The JMJ Note Receivable is secured by $500,000 worth of assets of JMJ.  JMJ paid $50,000 of the JMJ Note Receivable with cash in November 2009.  The JMJ Note Receivable principal and accrued interest balances are $450,000 and $14,839 at June 30, 2010, respectively.
  18
 Table of Contents
 Team Nation Holdings Corporation
 Notes to the Condensed Financial Statements
 As of June 30, 2010 and December 31, 2009 and
 For the Three and Six Month Periods Ended June 30, 2010 and 2009
 7.        Software and Leasehold Improvements
  Software and leasehold improvements consist of the following:
  June 30, 2010Software

$
64,584Leasehold improvements


1,36765,951Less: accumulated depreciation


(19,446
)Software and Leasehold Improvements, net

$
46,505
 Depreciation expense related to software and leasehold improvements for the three and six month periods ended June 30, 2010 and 2009 was $5,499, $10,946, $0, and $78, respectively.
  8.        Title Plant
  The Company acquired the Orange County title plant from CCTN in December 2007. The $710,000 purchase price for the title plant was based on an appraisal. The Company reviews the carrying value of the title plant asset on an annual basis to determine whether impairment may exist.  No impairments existed at December 31, 2009.
  9.        Convertible Debt
  Convertible Debt Obligation - Eventus Capital
  On November 25, 2009, the Company converted its affiliate payable to CCTN, in the amount of $1,089,509, to an unsecured, convertible obligation in favor of CCTN.  CCTN then transferred this convertible debt obligation to Eventus Capital, Inc. (“Eventus”), an unrelated third party. The debt obligation is due November 25, 2010, bears no interest and contains a conversion feature that allows Eventus to convert the debt obligation, in $10,000 tranches, into shares of the Company’s common stock at a conversion rate of 60% of the average five day closing bid price preceding the conversion notice date.  Eventus may convert the debt obligation at their election, but may not hold more than 4.99% of the Company’s outstanding shares at any time.
  19
 Table of Contents
  Team Nation Holdings Corporation
 Notes to the Condensed Financial Statements
 As of June 30, 2010 and December 31, 2009 and
 For the Three and Six Month Periods Ended June 30, 2010 and 2009
 Since conversion of the debt obligation into common shares is at the option of the holder and the conversion price is indexed to the Company's stock price, the fair value of the embedded conversion feature of the debt obligation is recorded by the Company as a derivative liability. This derivative liability is adjusted to fair value at each reporting period, with income or expense recorded to the statement of operations.  At the issuance date, the fair value of the embedded conversion feature of the debt obligation, a level 3 fair value input, was $1,583,194 which resulted in a debt discount of $1,089,510 and a derivative liability expense of $493,684. The derivative liability expense was recorded upon issuance in the amount that the liability exceeded the value of the debt obligation.  On December 22, 2009, Eventus converted $10,000 of the debt obligation into 638,570 common shares of the Company (Note 12).  During the three and six month period ended June 30, 2010, Eventus converted $57,000 and $183,000 of the debt obligation into 19,380,543 and 32,582,834 common shares of the Company, respectively.  At June 30, 2010, the debt obligation balance to Eventus was $896,510.  The value of the embedded conversion feature decreased to $1,211,499 resulting in a decrease to the derivative liability and to the Company's loss of $331,396 and $745,627 for the three and six month periods ended June 30, 2010.  Accretion of the debt obligation's debt discount for the three and six month periods ended June 30, 2010 was $268,646 and $540,277. This debt obligation is not included in the debt maturity table in Note 11.
  Convertible Note Payable - JMJ Financial
  As part of the financing arrangement with JMJ (Note 6), the Company issued a $600,000 unsecured, convertible note payable (the "JMJ Note Payable") dated November 18, 2009, to JMJ Financial for a consideration of $500,000 (reflecting a 16.66% original issue discount) in a private placement. The JMJ Note Payable bears interest at a rate of 12% with no discount allowed for principal reductions.  The JMJ Note Payable is due on or before November 18, 2012. At any time after the 180th day following the effective date of the JMJ Note Payable, the holder may at its election convert all or part of the JMJ Note Payable plus accrued interest into shares of the Company's common stock at the conversion rate of 40% of the lowest trade price in the 20 trading days prior to the conversion. The terms of the JMJ Note Payable limit JMJ from owning more than 9.99% of the Company's common stock at any given time.
  20
 Table of Contents
  Team Nation Holdings Corporation
 Notes to the Condensed Financial Statements
 As of June 30, 2010 and December 31, 2009 and
 For the Three and Six Month Periods Ended June 30, 2010 and 2009
 Since conversion of the JMJ Note Payable into common shares is at the option of the holder and the conversion price is indexed to the Company's stock price, the fair value of the embedded conversion feature of the JMJ Note Payable is recorded as a derivative liability. The derivative liability is adjusted to fair value at each reporting period, with income or expense recorded to the statement of operations.  At the issuance date, the fair value of the embedded conversion feature, a level 3 fair value input, of the JMJ Note Payable was $2,992,500 which resulted in a debt discount of $600,000 and a derivative liability expense of $2,492,500. During the three month and six month periods ended June 30, 2010, JMJ converted $15,300 of debt obligation into 10,000,000 common shares of the Company. At June 30, 2010, the value of embedded conversion feature had decreased to $1,686,635, resulting in a decrease to the derivative liability and a decrease in the Company's loss of $143,365 and $562,615 for the three and six month period ended June 30, 2010.  Accretion of the JMJ Note Payable debt discount for the three and six month periods ended June 30, 2010 was $49,270 and $99,088.
  Fair Value Valuation Technique and Assumptions
  The Company uses the Black-Scholes Option Pricing Model to determine the fair value of derivative liabilities associated with the embedded conversion features of the Eventus debt obligation and the JMJ note payable.  The assumptions used in calculating the black-scholes value of these embedded conversion features as of June 30, 2010 is as follows:
  Risk free interest rate
0.15% to 0.43%Expected volatility of common stock
350% to 367%Dividend yield
0.00%Expected life of conversion features
0.4 - 2.4 years
 
 10.      Note Payable
  In March 2010, the Company signed an unsecured promissory note to convert a trade payable to a vendor into a note payable due March 2012. The principal amount of the note payable is $118,223, the same amount as the trade payable, with a term of 24 months requiring $5,000 monthly payments at 4% interest annually. The Company may prepay in whole or in part the balance of the note prior to maturity without penalty. In the event of default, the vendor may declare the unpaid principal balance and earned interest on this note immediately due. The outstanding note payable balance and interest payable at June 30, 2010 is $104,277 and $3,978, respectively.  The current portion of the note payable is $56,862.
  21
 Table of Contents
  Team Nation Holdings Corporation
 Notes to the Condensed Financial Statements
 As of June 30, 2010 and December 31, 2009 and
 For the Three and Six Month Periods Ended June 30, 2010 and 2009
 11.      Professional Business Bank Debt
  In November 2009, the Company and its four major shareholders, who are also officers and directors, entered into a Settlement Agreement that resolved then existing litigation (Note 13) and satisfied promissory notes that were in default with Professional Business Bank ("PBB").  Per the settlement agreement, PBB received five certificates of deposit ("CDs") that were being held as collateral until resolution of this matter.  One of the CDs, with a value of $106,593, was the property of the Company. The other four CDs, totaling $423,280, were the property of the guarantors (the 4 officers and directors). As part of the settlement, PBB settled the Company's two notes payable in default totaling $3,381,292 and accrued interest of $363,644 by issuing a new financing in the amount of $2,750,000 with a five-year term and at an interest rate of 5%.  The financing calls for monthly payments of $20,000 per month that commenced January 26, 2010 and increase annually by $5,000 per month.  The monthly payments include principal and interest with the unpaid balance due at the end of the five year term.  If the Company is able to pay off the $2,750,000 within one year of issuance, the Company will receive a $250,000 discount.  PBB has received as security for this transaction a stipulated judgment against the Company and the four officers and directors in the amount of $3,215,062.  The four officers and directors all entered into personal guaranty agreements with PBB (Note 13).  The settlement agreement resulted in a gain on settlement of $465,063 for the year ended December 31, 2009.
  Debt owed to PBB at June 30, 2010 and December 31, 2009 consists of the following:
  2010


2009Financing AgreementPBB financing agreement payable; unsecured; interest at 5% APR; guaranteed by the four officers and directors;

monthly principal and interest payments of $20,000 per month starting January 26, 2010, increasing $5,000 annually

with a balloon payment due at the end of the five year term

$
2,686,103



2,750,000Less current portion


138,455



298,964Long term debt to PBB

$
2,547,648


$
2,451,036
 For the three and six month periods ended June 30, 2010 and 2009, interest expense on the PBB debt was $41,125, $69,157, $76,896 and $151,246, respectively.
  22
 Table of Contents
  Team Nation Holdings Corporation
 Notes to the Condensed Financial Statements
 As of June 30, 2010 and December 31, 2009 and
 For the Three and Six Month Periods Ended June 30, 2010 and 2009
 Maturity of all TEAM debt is as follows:
  Year ended December 31,2010 (remainder of year)

$
81,3582011


230,2892012


844,9652013


316,2712014 and beyond


1,902,197$
3,375,080
  12.      Stockholder's Equity
  Preferred stock
  On December 23, 2009, the Company issued its four officers and directors each 15 shares of Series A Convertible Preferred Stock of the Company for $60,000.  Each share of Series A Convertible Preferred Stock is convertible into 1% of the Company's common stock at the date of conversion.  The preferred shares do not have liquidation preference over common shares.  Each preferred share is entitled to as many votes equal to 1% of the Company's outstanding common stock.  On January 4, 2010, the Company amended the certificate of designation of preferences and rights of Series A Preferred Stock previously filed with the Nevada Secretary of State which changed the number of shares authorized from 50,000,000 to 60 shares. At June 30, 2010 and December 31, 2009, there were 60 shares issued and outstanding.
  Common stock
  The Company collected $7,004 of subscriptions receivable during the three month period ended March 31, 2009.
  In June 2009, the Company issued 400,797 shares of its common stock to certain of its stock subscription subscribers to meet a pricing provision in the subscription agreement ("Free-up shares").  There was no financial impact of the issuance of these shares.
  In July 2009, the Company issued 14,109,338 shares of its common stock to its four officers and directors as consideration for each of the individuals' certificates of deposit which were used in the PBB settlement to partially satisfy the then outstanding debt.  The certificates of deposit in total were valued at $423,280.  The outstanding balance of the line of credit became due in July 2009 and the Company was in default.  The officers and directors had guaranteed the line of credit with personal certificates of deposit.  The Company reached a settlement with PBB effective December 31, 2009 (Note 11).
  In August 2009, the Company sold 200 shares of its common stock for cash of $200.
  23
 Table of Contents
  Team Nation Holdings Corporation
 Notes to the Condensed Financial Statements
 As of June 30, 2010 and December 31, 2009 and
 For the Three and Six Month Periods Ended June 30, 2010 and 2009
 In September 2009, the Company issued 1,293,333 shares of its common stock to a stock subscription subscriber to meet a pricing provision in the agreement.  There was no financial impact of the issuance of these shares.
  In two November 2009 transactions, Sunderland bought a total of $20,000 of the Company's convertible related party payable.  In each transaction, Sunderland converted the $10,000 tranche into 666,665 shares of the Company's common stock at $0.015 per share, a 40% discount to the prior 5 days closing average.
  In three December 2009 transactions, Eventus bought a total of $30,000 of the Company's convertible related party payable.  In each transaction, Eventus converted the $10,000 tranche into shares of the Company's common stock at a 40% discount to the prior 5 days closing average.  A total of 1,942,210 shares of the Company's common stock were issued in the three transactions.
  In December 2009, the Company issued 1,796,504 shares of its common stock to the former landlord of ESCROW, the Company's discontinued subsidiary, in satisfaction of a $53,895 lease liability owed.  The share value of $0.03 was the closing price on the date of issuance.
  In December 2009, Eventus converted a $10,000 tranche of the Company's convertible debt obligation (Note 9) into 638,570 shares of the Company's common stock at $0.01566 per share, a 40% discount to the prior 5 days closing average.
  In four February 2010 transactions, Eventus bought a total of $40,000 of the Company's convertible related party payable.  In each transaction, Eventus converted the $10,000 tranche into shares of the Company's common stock at a 40% discount to the prior 5 days closing average.  A total of 3,716,112 shares of the Company's common stock were issued in the four transactions.
  In February 2010, the Company issued 500,000 shares of the Company's common stock for investor relations services valued at $10,000.
  During the three-month period ended March 31, 2010, Eventus converted 11 tranches of its convertible debt obligation totaling $126,000.  In each transaction, Eventus converted the debt into shares of the Company's common stock at a 40% discount to the prior 5 days closing average.  A total of 13,202,291 shares of the Company's common stock were issued in the eleven transactions.
  During the three-month period ended June 30, 2010, Eventus converted 6 tranches of its convertible debt obligation totaling $57,000.  In each transaction, Eventus converted the debt into shares of the Company's common stock at a 40% discount to the prior 5 days closing average.  A total of 19,380,543 shares of the Company's common stock were issued in the six transactions.
  24
 Table of Contents
  Team Nation Holdings Corporation
 Notes to the Condensed Financial Statements
 As of June 30, 2010 and December 31, 2009 and
 For the Three and Six Month Periods Ended June 30, 2010 and 2009
 During the three-month period ended June 30, 2010, JMJ Financial converted 7 tranches of its convertible debt obligation totaling $15,300.  In each transaction, Eventus converted the debt into shares of the Company's common stock at a 40% discount to the prior 5 days closing average.  A total of 10,000,000 shares of the Company's common stock were issued in the seven transactions.
  At June 30, 2010, the Company does not have adequate shares authorized to issue upon conversion of the debt (Note 13).  If needed, the Company intends to increase the number of shares authorized or enact a reverse stock split while keeping the current number of shares authorized.
  13.      Commitments and Contingencies
  Contingencies
  Certain conditions may exist as of the date financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur.  Company management and its legal counsel assess such contingencies related to legal proceeding that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.  If the assessment of a contingency indicates that it is probably that a liability has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements.  If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or if probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable, would be disclosed.
  Officer and Directors Loans
  The Company amended certain of the terms of four officers and directors' note receivable agreements.  Our legal counsel has reviewed these amendments and has indicated that they are compliant with Section 402(a) of the Sarbanes-Oxley Act of 2002.
  25
 Table of Contents
  Team Nation Holdings Corporation
 Notes to the Condensed Financial Statements
 As of June 30, 2010 and December 31, 2009 and
 For the Three and Six Month Periods Ended June 30, 2010 and 2009
 Authorized Shares
  At June 30, 2010, the Company did not have adequate shares authorized to issue upon conversion of the JMJ and Eventus debt (Note 9).  If needed, the Company intends to increase the number of shares authorized or enact a reverse stock split while keeping the current number of shares authorized.  Given the Company's stock trading price as of June 30, 2010 and the date of this report, management does not believe that the debt will be converted to the extent that there will be insufficient shares authorized, and as such, has not recorded a liability for any costs associated with this matter.
  Operating Leases
  The Company has operating leases for certain office equipment and the facility. Future minimum lease payments are as follows for the years ending December 31:
  2010 (remainder of year)

$
124,9912011


145,4582012


30,4932013


-2014 and thereafter


-Total minimum lease payments

$
300,942
 Rental expense was $39,850, $72,540, $53,578 and $74,583 for the three and six month periods ended June 30, 2010 and 2009, respectively.  Rental expense is net of sublease income of $21,224, $42,448, $21,224 and $24,761 for the three and six month periods ended June 30, 2010 and 2009.  Note 4 contains future expected sublease income and expenses.
  Litigation
  The Company's policy is to recognize amounts related to legal matters as a charge to operations if it is probable that a liability has been incurred and the amount of loss can be reasonably estimated.
  In November 2009, we entered into a settlement (Note 11) with PBB to resolve the pending litigation and the amount of the bank's then outstanding loans.
  26
 Table of Contents
  Team Nation Holdings Corporation
 Notes to the Condensed Financial Statements
 As of June 30, 2010 and December 31, 2009 and
 For the Three and Six Month Periods Ended June 30, 2010 and 2009
 Going Concern
  The accompanying financial statements have been prepared assuming the Company will continue as a going concern.  At June 30, 2010, the Company had negative working capital of $4,746,593, total liabilities of $7,470,839, and a stockholders’ deficit of $4,419,469.  The Company's only source of revenue and sole customer is a related party (Note 4).  The Company’s most significant asset is a group of eight notes receivable that were issued by its four officers and directors, amounting to $2,245,507 at June 30, 2010, which had the payment terms rewritten on extended terms in 2008.  Our significant debt servicing requirements, the ongoing operating losses and negative cash flows along with the depressed value of our common stock raise substantial doubt about the Company’s ability to continue as a going concern.  The financial statements do not include any adjustments that may result from the outcome of these uncertainties.
  The Company hopes to meet its working capital requirements through the conversion of its current debt and the identification of other sources of debt and private placement of equity funding.
  14.      Income (Loss) Per Share
  The following is a reconciliation of the number of common shares used in the calculation of basic income (loss) per share and diluted income (loss) per share for the three and six month periods ended June 30, 2010 and 2009:
  For the


For the


For the


For theThree Month


Three Month


Six Month


Six MonthPeriod Ended


Period Ended


Period Ended


Period EndedJune 30,


June 30,


June 30,


June 30,2010


2009


2010


2009Numerator:Net income (loss)

$
75,287


$
(325,339
)

$
103,361


$
(472,725
)Denominator:Weighted average number of common shares outstanding


95,256,369



47,191,894



85,523,301



47,191,894Incremental shares resulting from the assumed conversion

of debt and preferred stock


524,428,854



-



313,453,004



-Diluted common shares outstanding

$
619,685,223


$
47,191,894


$
398,976,305


$
47,191,894Net income (loss) per share:Basic

$
0.00


$
(0.01
)

$
0.00


$
(0.01
)Diluted

$
0.00


$
(0.01
)

$
0.00


$
(0.01
)
 27
 Table of Contents
 Team Nation Holdings Corporation
 Notes to the Condensed Financial Statements
 As of June 30, 2010 and December 31, 2009 and
 For the Three and Six Month Periods Ended June 30, 2010 and 2009
 The following table sets forth the number of common shares issuable upon conversion of the Series A Preferred Stock and convertible debt:
 
 As of June 30,2010


2009Series A Preferred Shares


93,675,313



-Shares issuable upon conversion of debt


2,134,005,971



-
 
 Each Series A Preferred Share is convertible into 1% of the Company's outstanding common shares at the time of its conversion.  The number of shares upon conversion presented above represents the maximum number of shares to be issued assuming the preferred shares are converted consecutively, rather than all at once.  At June 30, 2010, the Company does not have adequate shares authorized to issue upon such a conversion of the debt (Note 13).  If needed, the Company intends to increase the number of shares authorized or enact a reverse stock split while keeping the current number of shares authorized.









28
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ITEM2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS





From time to time, we may publish forward-looking statements relative to such matters as anticipated financial results, business prospects, technological developments and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. The following discussion and analysis should be read in conjunction with the Consolidated Financial Statements and the accompanying Notes to Consolidated Financial Statements appearing earlier in this report. All statements other than statements of historical fact included in this report are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended. Important factors that could cause actual results to differ materially from those discussed in such forward-looking statements include, but are not limited to, the following: our current liquidity needs, as described in our periodic reports; changes in the economy; our inability to raise additional capital; our involvement in potential litigation; volatility of our stock price; the variability and timing of business opportunities; changes in accounting policies and practices; the effect of internal organizational changes; adverse state and federal regulation and legislation; and the occurrence of extraordinary or catastrophic events and terrorist acts. These factors and others involve certain risks and uncertainties that could cause actual results or events to differ materially from management’s views and expectations. Inclusion of any information or statement in this report does not necessarily imply that such information or statement is material. We do not undertake any obligation to release publicly revised or updated forward-looking information, and such information included in this report is based on information currently available and may not be reliable after this date.
 
 LIQUIDITY, FINANCIAL CONDITION AND GOING CONCERN
 
 The accompanying financial statements have been prepared assuming we will continue as a going concern.  We commenced limited operations in February 2007 and began full business operations in May 2007.  As discussed in the Notes to the Consolidated Financial Statements, on June 17, 2008 the shareholders of TEAM exchanged all of the outstanding common shares of TEAM for 25 million common shares of Suncross Exploration Corporation (“SUNCROSS”), which resulted in the TEAM shareholders having control of Suncross. At the time of the merger, Suncross changed its name to Team Nation Holdings Corp. The financial statements prior to that date are those of HOLDING.
 
 At June 30, 2010 we had negative working capital of $4,746,593 and incurred an operating loss of $731,633 during the six month period ended June 30, 2010.  Our operations do not currently provide sufficient cash flow to meet our obligations and it does not appear this will occur within the next year based on current operating trends. It is not likely that we will become cash flow positive in 2010.  However, we believe we are able to restructure or meet our obligations as they become due during the coming months while we move toward positive cash flow. Our company is still highly leveraged and there can be no assurance that revenues from operations, convertible debt financing and/or common stock sales will be sufficient to fund our current business plan.
 
 The company has also entered in to convertible debt obligations with Eventus Capital and JMJ Financial to help meet financing needs. As described in detail in Note 9 of the financial statements, this financing is based on cash payments to TEAM in exchange for stock at a discount which pays down the debt financing owed to Eventus and JMJ. Eventus can convert the obligation in $10,000 tranches into shares of the Company’s common stock at the conversion rate of 60% of the average five day closing bid price preceding the conversion notice date. With each cash payment, JMJ can convert into shares of the Company's common stock at the conversion rate of 40% of the lowest trade price in the 20 trading days prior to the conversion. This financing is expensive and dependent on the ability of the marketplace to absorb the volume of stock sales that are required to maintain this level of stock issuance. These two financing arrangements are responsible for over 469 million shares of the over 524 million share difference between basic and diluted weighted average shares outstanding on the statement of operations for the 2nd quarter. Eventus and JMJ have already indicated that at current stock prices they will not participate in further financing or at best will only participate in very limited financing not sufficient to cover operating capital deficiencies. This financing caused a derivative liability of $4,206,376 as of 12/31/2009. However, for the 6 months ended June 30, 2010, the original derivative liability incurred has been reduced by $1,308,242 which has been reported as Derivative liability income on the Statement of Operations. This derivative liability is still a significant current liability in the amount of $2,898,134 as of June 30, 2010 which is approximately 61% of the working capital deficiency that exists as of 6/30/2010. On the statement of operations, accretion of debt discount expense for the 1st six months of 2010 ($639,365) and for the 2nd quarter of 2010 ($321,449) are solely related to JMJ and Eventus debt agreements.
 
 The ability of the Company to continue as a going concern during the next year depends on the Company’s success being able to acquire ongoing financing and being able to execute its operating plans to generate positive cash flow.  The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.


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RESULTS OF OPERATIONS





Comparison of Six Month Period Ended June 30, 2010 to the Six Month Period Ended June 30, 2009
 
 Revenues
 
 Our revenue during the six month period in 2010 totaled $763,304 compared to $1,174,980 during the same period in the prior year. This decrease was due to a comparable decrease in title insurance orders from a title company owned by our officers and directors. Virtually all revenue was generated through a contract with this title company owned by our officers and directors (99.9% of revenue for 2010 and 94.9% of revenue in 2009). A small amount of joint marketing revenue was generated in the first six months of 2010 ($824) as the company’s plans for this revenue stream just began to take effect in the 4th quarter of 2009.
 
 Costs and expenses
 
 General and administrative expense amounted to $709,324 in 2010 as compared to $623,919 in the prior period.  The company’s employee base just began to be hired in late 1st quarter and 2nd quarter 2009 whereas 2010 reflects a full administrative staff expense (albeit with some cuts in 2nd quarter 2010). The 2010 general and administrative expense number also includes $48,000 in Director Fees that are being paid and used to reduce outstanding shareholders notes receivable per Board authorization. This began in April 2010 at the rate of $4,000 per director per month. The difference in general and administrative expense becomes greater when factoring in $60,000 of bad debt expense in 2009 that did not exist in 2010. Bad debt expense from 2009 is solely related to revenue streams from First Southwestern Title Company, which went out of business in 2009. All amounts owed from this title company were written off in 2009. Title plant processing and general fees increased in 2010 compared to the 1st six months of 2009 for the same staff building reasons.
 
 Title plant search fees decreased from $497,587 to $371,278 as these data charges are a variable cost that is directly related to the title order decrease when comparing the 1st six months of 2009 and 2010. Customer service expenses have been completely phased out ($127,295 to $21,216) and any expense in 2010 reflects the expenses for this service prior to being completely phased out in the 2nd quarter of 2010. Selling expenses have increased from $3,282 to $57,196 as the company tries to generate joint marketing revenues and other revenue streams outside of the vendor services contract with the title company owned by our officers and directors.
 
 Related party management fee expense increased in the six month period in 2010 only because no such management agreements existed in the 1st and 2nd quarters of 2009. These two months of expenses were terminated in February 2010. Moreover, under “Other expense (income)” on the statement of operations, the balances due for these management agreements in the amount of $241,649 were forgiven by the related party shareholders to the benefit of the company. This was reported as an “other income” item in the 2nd quarter of 2010.
 
 Interest income increased as a result of accrued interest on related party notes receivable due from directors which were in effect prior to the reverse acquisition between Team and Suncross that occurred in June 2008. The interest applicable to related party shareholders has been separated on the Statement of Operations in 2010. Payments have begun at the rate of $4,000 per month per Director to begin paying down these notes. Interest expense decreased from $151,246 to $69,157 between the comparable six month periods primarily due to debt with Professional Business Bank being renegotiated in late 2009 which yielded a much lower interest rate and lower principal balance due for 2010 than the default interest rate and outstanding balance that was in effect for the 1st six months of 2009.
 
 Comparison of Three Month Period Ended June 30, 2010 to the Three Month Period Ended June 30, 2009.
 
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 Revenues
 
 Our revenue during the three month period in 2nd quarter 2010 totaled $394,680 compared to $582,660 during the same period in the prior year. Management fees from First Southwestern Title Company in 2nd Quarter 2009 totaling $30,000 are no longer a viable revenue stream as that company is no longer in business.
 
 Costs and expenses
 
 General and administrative expense amounted to $413,477 in 2009 as compared to $371,379 in 2010.  Some cuts have been necessary in the 2nd quarter in light of the downturn of title orders related to the decrease in Title Plant fees (discussed below). However, the 2010 general and administrative expense number also includes $48,000 in Director Fees that are being paid and used to reduce outstanding shareholders notes receivable per Board authorization.
 
 Title plant search fees decreased from $222,739 to $168,755 as these data charges are a variable cost that is directly related to the title order decrease when comparing the 2nd quarters of 2009 and 2010. Title plant processing and general fees decreased in 2010 for the same reason. Customer service expenses have been completely phased out ($62,296 to $5,006) and any expense in 2010 reflects the expenses for this service prior to being completely phased out in the 2nd quarter of 2010. Selling expenses have increased from $0 to $19,609 as the company tries to generate joint marketing revenues and other revenue streams outside of the vendor services contract with the title company owned by our officers and directors.




Interest income increased as a result of accrued interest on related party notes receivable due from directors which were in effect prior to the reverse acquisition between Team and Suncross that occurred in June 2008. The interest applicable to related party shareholders has been separated on the Statement of Operations in 2010. Payments have begun at the rate of $4,000 per month per Director to begin paying down these notes. Interest expense decreased from $76,896 to $41,125 between the comparable six month periods primarily due to debt with Professional Business Bank being renegotiated in late 2009 which yielded a much lower interest rate and lower principal balance due for 2010 than the default interest rate and outstanding balance that was in effect for the 2nd quarter of 2009.
 
 OFF-BALANCE SHEET ARRANGEMENTS
 
 We had no off balance sheet arrangements.




ITEM3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





As a Smaller Business Issuer, we are not required to include this Item.





ITEM4. CONTROLS AND PROCEDURES





We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, who also acts as our Principal Accounting Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of “disclosure controls and procedures” in Rule 13a-14(c). In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.




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Changes in Internal Control Over Financial Reporting





We made no changes in our internal control over financial reporting during the second quarter of fiscal year 2009 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.





Evaluation of Disclosure Controls and Procedures





We have carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer/Principal Accounting Officer, of the effectiveness of the design and operation of all of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer/Principal Accounting Officer concluded that our disclosure controls and procedures were effective as of September 30, 2009.





PART II – OTHER INFORMATION





ITEM1. LEGAL PROCEEDINGS





From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not currently aware of any such legal proceedings or claims that we believe will have, individually or in the aggregate, a material adverse affect on our business, financial condition or operating results.





ITEM1A. RISK FACTORS





As a Smaller Business Issuer, we are not required to include this Item.





ITEM2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.





Please see 8-K filings dated September 11, 2009 and September 15, 2009.





ITEM3. DEFAULTS UPON SENIOR SECURITIES.





None.




ITEM4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.





None.





ITEM5. OTHER INFORMATION.





None.




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ITEM6. EXHIBITS





The following Exhibits are filed as part of this report pursuant to Item 601 of Regulation S-K:




3.1
Articles of Incorporation (1)3.2
Amended and Restated Articles of Incorporation (2)3.3
Amendment to Articles of Incorporation (3)10.1
Agreement and Plan of Reorganization dated June 17, 2008, between Registrant and Team Nation Holdings Corporation; (4)10.2
Agreement and Plan of Reorganization dated  June 10, 2009, between Registrant and Calcounties Title Nation Company; (5)10.3
Management Agreement dated January 2, 2009, between Team and CCTN; (5)10.4
Convertible Promissory Note dated 11-18-2009 between Registrant and JMJ Financial (6 )10.5
Amended Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock filed in Nevada on 1-4-10 (7 )10.6
Settlement Agreement dated January 21, 2010 between Registrant and Professional Business Bank  (8)14.1
Code of Ethics (9)16.1
Letter from Malone & Bailey, PC dated June 26, 2008, to the Securities and Exchange Commission (10)16.2
Letter from Moore & Associates dated April 21, 2009 to the Securities and Exchange Commission (11)31.1
Section 302 Certification (CEO)31.2
Section 302 Certification (CFO)32.1
Section 906 Certification (CEO)32.2
Section 906 Certification (CFO)





(1)
Filed as an exhibit to our Form SB-2 Registration Statement filed with the Commission on July 16, 2007, an incorporated herein by reference.(2)
Filed as an exhibit to our Form 10-QSB, filed with the Commission on August 14, 2007, and incorporated herein by reference.(3)
Filed as an Exhibit to our Form 10-K, filed with the commission on May 4, 2009, and incorporated herein by reference.(4)
Filed as an exhibit to our Form 8-K, filed with the Commission on March 14, 2008, and incorporated herein by reference.(5)
Incorporated by reference from the exhibit to Registrant’s Form 8-K filed with the Commission on June 20, 2008.(6)
Incorporated by reference from the exhibit to Registrant’s Form 8-K filed with the Commission on November 19, 2009.(7)
Incorporated by reference from the exhibit to Registrant’s Form 8-K filed with the Commission on January 8, 2010.(8)
Incorporated by reference from the exhibit to Registrant’s Form 8-K filed with the Commission on March 8, 2010.(9)
Filed as an Exhibit to our Form 10-K, filed with the commission on May 4, 2009, and incorporated herein by reference.(10)
Incorporated by reference from the exhibit to Registrant’s Form 8-K filed with the Commission on June 26, 2009.(11)
Incorporated by reference from the exhibit to Registrant’s Form 8-K filed with the Commission on April 28, 2009.








(c)

Not applicable.








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SIGNATURES





Pursuant to the requirement 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.




Team Nation Holdings CorporationBy:
/s/ Dennis R. DuffyDennis R. Duffy, President/CEOAugust 12, 2010By:
/s/ Daniel J. DuffyDaniel J. Duffy, Principal Financial OfficerAugust 12, 2010








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