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 September 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 November 15, 2010 there were 219,447,975 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 September 30, 2010





TABLE OF CONTENTS


PART 1 — FINANCIAL INFORMATIONItem 1.
Financial Statements:
3Item 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


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


December 31,2010


2009(unaudited)ASSETSCurrent assets:Cash and cash equivalents

$
1,484


$
19,029Due from affiliates


-



313,321Prepaid expenses


7,915



-Total current assets


9,399



332,350Notes receivable - related parties


2,225,492



2,261,350Accrued interest on JMJ note receivable


20,759



2,804Title plant


710,000



710,000Software and leasehold improvements, net of accumulated amortization of $24,946 and $8,500


41,005



52,515Deposits


27,628



27,030Total assets

$
3,034,283


$
3,386,049LIABILITIES AND SHAREHOLDER'S DEFICITCurrent liabilities:Accounts payable - trade

$
562,632


$
693,275Accounts payable of abandoned discontinued ops


5,569



5,569Related party convertible payable obligations


-



182,673Affiliate payable


707,211



-Accrued liabilities


104,595



119,314Current portion of financing agreement


155,271



104,882Current portion of note payable


72,437



-Convertible debt obligation, net of discount of $167,158 and $982,051


720,352



97,458Derivative liability


2,125,404



4,206,376Total current liabilities


4,453,471



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


2,504,571



2,645,118Convertible note payable, net of discount of $427,007 and $576,460


127,318



23,540Accrued interest on convertible note payable


20,839



2,839Note payable, net of current portion


32,844



76,134Total liabilities


7,139,043



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


1



1Common stock ($0.001 stated value, 1,000,000,000 shares authorized, 195,591,125 and 67,901,401 shares issued and outstanding)


195,591



67,901Additional paid in capital


1,729,023



1,566,038Stock subscription receivable


(450,000
)


(450,000
)Accumulated deficit


(5,579,375
)


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


(4,104,760
)


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

$
3,034,283


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


For the


For the


For theThree Month


Three Month


Nine Month


Nine MonthPeriod Ended


Period Ended


Period Ended


Period EndedSeptember 30,


September 30,


September 30,


September 30,2010


2009


2010


2009Management fees  - related party

$
490,260


$
413,640


$
1,252,740


$
1,528,620Management fees


-



201,279



-



261,279Joint marketing


864



-



1,688



-Total revenue


491,124



614,919



1,254,428



1,789,899Operating expenses:Title plant feesSearch fees


198,783



190,755



570,061



688,342Processing and general


104,686



131,033



387,809



400,052General and administrative


251,156



311,897



912,480



935,816Directors fees


58,000



-



106,000



-Management fees  - related parties


-



151,200



100,800



151,200Customer service expenses


79



56,842



21,295



184,137Selling expenses


45,506



-



102,702



3,282Total operating expenses


658,210



841,727



2,201,147



2,362,829Operating loss


(167,086
)


(226,808
)


(946,719
)


(572,930
)Other expense (income):Interest income


(6,050
)


(624
)


(17,961
)


(1,859
)Interest income - related parties


(27,985
)


(15,893
)


(60,142
)


(47,091
)Interest expense


40,765



78,946



109,922



230,192Debt forgiveness - related parties


-



-



(241,649
)


-Accretion of debt discount


324,981



-



964,346



-Derivative liability income


(772,730
)


-



(2,080,972
)


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


273,933



(289,237
)


379,737



(754,172
)Provision for income taxes


1,600



800



4,043



800Income from continuing operations


272,333



(290,037
)


375,694



(754,972
)Loss from discontinued operations


-



(3,827
)


-



(11,617
)Net income (loss)

$
272,333


$
(293,864
)

$
375,694


$
(766,589
)Income (loss) per share from continuing operations:Basic

$
0.00


$
(0.01
)

$
0.00


$
(0.02
)Diluted

$
0.00


$
(0.01
)

$
0.00


$
(0.02
)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


$
(0.02
)Diluted

$
0.00


$
(0.01
)

$
0.00


$
(0.02
)Weighted average shares outstanding:Basic


156,576,679



53,210,924



109,468,030



49,207,087Diluted


3,241,945,911



53,210,924



826,505,335



49,207,087
  The accompanying notes are an integral part of the financial statements.
  5
 Table of Contents
  TeamNation Holdings Corporation
 Condensed Consolidated Statements of Cash Flows
 For the Nine Month Periods Ended September 30, 2010 and 2009
  For the


For theNine Month


Nine MonthPeriod Ended


Period EndedSeptember 30,


September 30,2010


2009(unaudited)


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

$
375,694


$
(766,589
)Loss from discontinued operations


-



(11,617
)Income (loss) from continuing operations


375,694



(754,972
)Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:Reserve for doubtful accounts receivable


-



(251,945
)Amortization


16,445



195Shares issued for services


10,000



-Debt discount accretion


964,346



-Derivative liability income


(2,080,972
)


-Gain on debt forgiveness from related parties


(241,649
)


-Directors fees used to satisfy notes receivable


96,000



-Accrued interest income on stock subscription receivable


(17,955
)


(1,366
)Accrued interest expense on convertible debt obligation


18,000



-Decrease (increase) in assets:Accounts receivable


-



262,985Prepaid expenses


(7,915
)


-Due from affiliates


313,321



(47,090
)Deposit


(598
)


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


(73,555
)


(175,699
)Accrued liabilities


(14,719
)


258,445Due to affiliate


707,211



855,445Convertible related party debt obligations


98,976



-Cash from operating activities - continuing operations


162,630



107,851Cash used in operating activities - discontinued operations


-



(13,966
)Cash from operating activities


162,630



93,885Cash flows used in investing activities:Purchase of software and improvements


(4,935
)


(92,441
)Accrued interest on related party notes receivable


(60,141
)


-Cash used in investing activities - continuing operations


(65,076
)


(92,441
)Cash used in investing activities - discontinued operations


-



1,105Cash used in investing activities


(65,076
)


(91,336
)
   The accompanying notes are an integral part of the financial statements.
  6
 Table of Contents
  Team Nation Holdings Corporation
 Condensed Consolidated Statements of Cash Flows
 For the Nine Month Periods Ended September 30, 2010 and 2009
   Cash flows used in financing activities:Restricted cash


-



(1,860
)Sale of common stock


3,000



13,630Repayment of related party payable


-



(13,958
)Payments made on financing agreement


(90,158
)


-Payments made on note payable


(27,941
)


-Cash used in financing activities - continuing operations


(115,099
)


(2,188
)Cash used in financing activities  - discontinued operations


-



-Cash used in financing activities


(115,099
)


(2,188
)Net increase (decrease) in cash


(17,545
)


361Cash and cash equivalents at beginning of period


19,029



4,296Cash and cash equivalents at end of period

$
1,484


$
4,657
 Supplemental Disclosure of Cash Flow Information
  For the


For theNine Month


Nine MonthPeriod Ended


Period EndedSeptember 30,


September 30,2010


2009(unaudited)


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

$
92,300


$
1,014Income taxes

$
2,443


$
800Schedule of Non cash Financing ActivitiesCommon stock used to satisfy related party convertible payable obligations

$
40,000


$
-Common stock used to satisfy convertible debt obligation

$
237,675


$
423,280Issuance of shares to meet subscription pricing terms

$
-


$
1,694
 The accompanying notes are an integral part of the financial statements.
   7
 Table of Contents
  TeamNation Holdings Corporation
 Notes to the Condensed Consolidated Financial Statements
 As of September 30, 2010 and December 31, 2009 and
 For the Three and Nine Month Periods Ended September 30, 2010 and 2009
  1.       Description of Business and Nature of Presentation
  We have prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). We have condensed or omitted certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) pursuant to such rules and regulations. The unaudited condensed consolidated financial statements reflect all adjustments, which are normal and recurring, that are, in the opinion of management, necessary to fairly state the financial position as of September 30, 2010 and the results of operations and cash flows for the related interim periods ended September 30, 2010 and 2009. The results of operations for the three and nine months ended September 30, 2010 are not necessarily indicative of the results that may be expected for the year ending December 31, 2010 or for any other period.
  TEAM Nation Holdings Corporation (the “Company”) (“TEAM”), a Nevada corporation, is a management and services company specializing in management solutions for title companies and providing title production services. TEAM currently provides management, title plant and production services, customer service, sales and marketing support, HR administration, IT administration and accounting services to a single related party title company in exchange for transaction-based fees (Note 4).
  Included in the financial statements of the Company is wholly-owned subsidiary TEAM Title Inc. (TEAM Title), a Delaware corporation which was formed in 2010 to provide a national licensing arm for TEAM.  Through end of the third quarter of 2010, TEAM Title has obtained licensure to conduct title and settlement transactions in the District of Columbia, Georgia, Iowa, Kentucky, Minnesota, New Jersey, New York, Pennsylvania, Rhode Island and West Virginia.  TEAM Title's business plan anticipates licensing in an additional 28 states, including Arizona, Florida, Nevada and Texas during the next nine months.  Once the planned licensing is obtained, TEAM Title plans to conduct direct title and settlement services in the licensed areas with a focus on its marketing efforts to regional and national lenders, asset managers, and banking centers.
  Reclassification
  Certain reclassifications have been made to the December 31, 2009 balance sheet and the three and nine month financial statements for the period ending September 30, 2009 to conform to the September 30, 2010 presentation. These reclassifications had no effect on previously reported results of operations and accumulated deficit presented.
  8
 Table of Contents
  Team Nation Holdings Corporation
 Notes to the Condensed Consolidated Financial Statements
 As of September 30, 2010 and December 31, 2009 and
 For the Three and Nine Month Periods Ended September 30, 2010 and 2009
 2.       Significant Accounting Policies
  The accounting policies followed by us and other information are contained in the notes to the Company’s audited financial statements for the year ended December 31, 2009 included in our Form 10-K filed on April 15, 2010 with the SEC. We have not changed our significant accounting policies as of September 30, 2010. You should read this Quarterly Report on Form 10-Q in connection with the information contained in our Annual Report on Form 10-K filed on April 15, 2010.
  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.
  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 September 30, 2010, the Company does not have any cash equivalents.
  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 September 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 solutions for title companies and providing title production services.  Revenue from services is recognized when the service is performed.
  9
 Table of Contents
 Team Nation Holdings Corporation
 Notes to the Condensed Consolidated Financial Statements
 As of September 30, 2010 and December 31, 2009 and
 For the Three and Nine Month Periods Ended September 30, 2010 and 2009
  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. 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 operations and a credit to the related valuation allowance. The Company wrote off all of trade accounts receivable with balances as of December 31, 2009.  TEAM did not increase its allowance for doubtful accounts during the nine months ended September 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.
  10
 Table of Contents
  Team Nation Holdings Corporation
 Notes to the Condensed Consolidated Financial Statements
 As of September 30, 2010 and December 31, 2009 and
 For the Three and Nine Month Periods Ended September 30, 2010 and 2009
  The carrying values of our cash and beneficial conversion feature derivative liability carried at fair value as of September 30, 2010 and December 31, 2009, are classified in the table below in one of the three categories described above:
 Fair Value at September 30, 2010 and December 31, 2009Level 1


Level 2


Level 3


TotalSeptember 30, 2010:Cash and cash equivalents

$
1,484



-



-



1,484Derivative liability


-



-


$
2,125,404


$
2,125,404December 31, 2009:Cash and cash equivalents

$
19,029


$
-



-


$
19,029Derivative liability


-



-


$
4,206,376


$
4,206,376
  Advertising
  Advertising expense was $1,630 for the nine month period ended September 30, 2009.  There was no advertising expense for the three or nine month periods ended September 30, 2010 or the three month period ended September 30, 2009.
  Software and Leasehold Improvements
  Software and leasehold improvements are recorded at cost and are amortized 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 leasehold improvements, the asset account and contra account are relieved of the cost and the related accumulated amortization.  Any resulting gain or loss from the transaction is included in the statement of operations.
  Estimated Useful LivesSoftware
3 yearsLeasehold improvements
Lesser of useful life or lease termplus reasonable renewal options
 Intangible Asset Impairment
  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.
  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.
  11
 Table of Contents
  Team Nation Holdings Corporation
 Notes to the Condensed Consolidated Financial Statements
 As of September 30, 2010 and December 31, 2009 and
 For the Three and Nine Month Periods Ended September 30, 2010 and 2009
 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-references alongside the references to the standards issued and adopted prior to the adoption of the Codification.
  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. We adopted this statement on July 1, 2009 as it was effective for interim or annual periods ending after June 15, 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 are now required to estimate fair value. We adopted this standard on July 1, 2009 as it was effective for interim or annual periods ending after June 15, 2009.
  12
 Table of Contents
  Team Nation Holdings Corporation
 Notes to the Condensed Consolidated Financial Statements
 As of September 30, 2010 and December 31, 2009 and
 For the Three and Nine Month Periods Ended September 30, 2010 and 2009
 
 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, the Company terminated the operations of Escrow and Mortgage and their net liabilities were assumed by the Company.  We recognized losses of $3,827 and $11,617 from the two subsidiaries' discontinued operations for the three and nine month periods ended September 30, 2009, respectively.
  The costs and expenses related to the two discontinued subsidiaries present on the Statement of Operations in a single line format for the three and nine month periods ended September 30, 2009 are shown below:
 For the Three Month PeriodEnded September 30, 2009ESCROW


MORTGAGE


TotalRevenues


-



-



-Costs and expenses:Selling, general and administrative


-


$
369


$
369Shutdown expense

$
3,395



-



3,395Interest expense


63



-



63Loss from discontinued operations

$
(3,458
)

$
(369
)

$
(3,827
)For the Nine Month PeriodEnded September 30, 2009ESCROW


MORTGAGE



TotalRevenues


-



-



-Costs and expenses:Selling, general and administrative


-


$
1,105


$
1,105Shutdown expense

$
10,185



-



10,185Interest expense


327



-



327Loss from discontinued operations

$
(10,512
)

$
(1,105
)

$
(11,617
)
 
 4.       Related Party Transactions
  Relationship with Affiliate - CalCounties Title Nation
  TEAM's sole revenue source from July 1, 2009 through September 30, 2010 has been derived by providing transaction related services to a related entity, CalCounties Title Nation ("CCTN").  CCTN is a Southern California title company owned by TEAM's four directors.
  In 2007, TEAM, then a privately owned company, lent its four directors, two who serve as its sole officers, all of the funds necessary to acquire all of the outstanding shares of CCTN.  For all periods presented herein, TEAM is dependent on CCTN for working capital advances and is its only source of revenue.  This reliance on CCTN raises substantial doubt about the Company's ability to continue as a going concern.
  13
 Table of Contents
  Team Nation Holdings Corporation
 Notes to the Condensed Consolidated Financial Statements
 As of September 30, 2010 and December 31, 2009 and
 For the Three and Nine Month Periods Ended September 30, 2010 and 2009
 TEAM is a variable interest entity of CCTN while CCTN is not a variable interest of TEAM.  As such, the financial statements of TEAM for all periods presented have not been consolidated with those of CCTN.  CCTN's summarized condensed financial statements as of September 30, 2010 and December 31, 2009 and for the related three and nine month periods ending September 30, 2010 and 2009 are presented below:
  As of


As ofSeptember 30,


December 31,2010


2009Current assets

$
3,048,734


$
3,938,971Total assets

$
5,071,990


$
5,153,659Current liabilities

$
2,403,483


$
2,548,060Total liabilities

$
3,091,928


$
2,934,295Stockholders' equity

$
1,980,062


$
2,219,364
   For the


For the


For the


For theThree Month


Three Month


Nine Month


Nine MonthPeriod Ended


Period Ended


Period Ended


Period EndedSeptember 30,


September 30,


September 30,


September 30,2010


2009


2010


2009(unaudited)


(unaudited)


(unaudited)


(unaudited)Total operating revenues

$
3,086,776


$
3,698,498


$
8,587,348


$
9,696,773Total operating expenses

$
2,813,441


$
3,053,206


$
7,986,686


$
9,326,364Net income

$
285,448


$
665,960


$
929,504


$
402,853
 Due To/From Affiliate
  The components of the due to/ due from CCTN activity for the nine month period ended September 30, 2010 is as follows:
  Amount due from CCTN, December 31, 2009

$
313,321Satisfaction of amounts owed by CCTN to TEAM for the vendor services provided


1,252,740Operating capital advances provided by CCTN to TEAM


(2,225,468
)Operating capital advances provided by TEAM to CCTN


181,005Facility sublease payments made by CCTN to TEAM


63,672Facility sublease payments made by TEAM to CCTN


(80,978
)CCTN accounts payable assumed by TEAM


(211,503
)Amount due to CCTN, September 30, 2010

$
(707,211
)
 
 14
 Table of Contents
  Team Nation Holdings Corporation
 Notes to the Condensed Consolidated Financial Statements
 As of September 30, 2010 and December 31, 2009 and
 For the Three and Nine Month Periods Ended September 30, 2010 and 2009
 
  Notes Receivable – Related Party
  On May 31, 2007, the Company lent its 4 directors, two who are its sole officers, a total of $2,600,000 for notes receivable from the directors.  There were four notes receivable, one per director, for the original amounts of $650,000.  Each of the related parties notes were non-interest bearing through May 31, 2008, at which time the notes bore an interest rate of 5% per annum with annual interest only payments commencing on May 31, 2009 and continuing until May 1, 2014, when all principal and accrued interest becomes due in full.  The first of the interest only payments due on May 31, 2009 on all four of the notes were not made.  On November 10, 2009, the terms of the four notes were amended to provide for the interest only payments to begin on January 1, 2011.
  On June 1, 2008, the Company lent its 4 directors, two who are its sole officers, a total of $1,000,000.  There were four individual promissory notes, each for $250,000, bearing an annual interest rate of 4.62%.  The first interest only payment on each of the notes was to be made on June 1, 2010.  As of the first payment's due date, each of the note's interest rates reset to 5% per annum until June 1, 2015, when all principal and accrued interest becomes due in full.  On November 10, 2009, the terms of the four notes were amended to provide for the interest only payments to begin on January 1, 2011.
  The total notes receivable balance, including accrued interest, as of September 30, 2010, due from its four directors, two who are its sole officers, was $2,225,492.
  We recorded accrued interest related to the notes receivable - related parties for the three and nine month periods ended September 30, 2010 and 2009 of $27,986, $60,142, $15,893, and $47,091 respectively.  As of April 1, 2010, the Company began compensating each of its four directors with a $4,000 per month director's fee.  Accrued directors fees for all four of the Company's directors were used to satisfy accrued interest on the notes receivable - related parties for the three and nine month periods ended September 30, 2010 amounting to $58,000 and $106,000, respectively.
  Management Agreements - Related Parties
  Management fee revenues
  TEAM manages all of CCTN's operations by providing management, title plant and production services, customer service, sales and marketing support, HR administration, IT administration and accounting services.  TEAM's monthly management fee from January 1, 2009 forward is a semi-variable fee of $40,000 per month plus $60 per open title order.  The Company's management fee revenue - related party from CCTN for the three and nine month periods ended September 30, 2010 and 2009 was $490,260, $1,252,740, $413,640 and $1,528,620, respectively.  The related TEAM title plant fees expense for the three and nine month periods ended September 30, 2010 and 2009 was $198,783, $570,061, $190,755 and $688,342 , respectively.
  15
 Table of Contents
   Team Nation Holdings Corporation
 Notes to the Condensed Consolidated Financial Statements
 As of September 30, 2010 and December 31, 2009 and
 For the Three and Nine Month Periods Ended September 30, 2010 and 2009
 Management fee expenses - Related Parties
  On July 1, 2009, the Company entered into management agreements with affiliates of two of the Company's four directors.  These two individuals are the sole TEAM officers.  For managing the Company's operations, human resources, accounting services, sales, and marketing efforts, each of the affiliates of the officers were compensated at a rate of $25,200 per month per agreement.  The two officers had separate compensation arrangements with their individual affiliates and did not receive any salary compensation from the Company for the period from July 1, 2009 through December 31, 2009.  Total management fee - related parties expenses were $0 and $100,800 for the three and nine month periods ended September 30, 2010. The related parties' management fee agreements were terminated in February 2010.
  Modification of Management Fees Payable - Related Parties
  On November 3, 2009, the Company entered into an agreement with the affiliates acting as the Company's two officers and modified the payment terms of the management fee - related party payables owed to the two affiliates.  The modification agreement provided for the right of conversion by the holders of the management fees - related party payables of any portion of the amounts owed them into shares of the Company's common stock.  The conversion option was based on a rate of a share of the Company's common stock for an amount equal to 60% of the average of the closing price for the preceding five days. The management fees - related party payables were due on demand and fully transferable.
  Forgiveness of Management Fees - Related Party Payables
  In June 2010, the related party affiliates forgave all management fees - related parties amounts owed to them.  A gain, net of income taxes, of $241,649 has been recognized by the Company on the debt forgiveness in the Statement of Operations.
  Shares Issued
  As discussed in Note 12, in July 2009, the Company issued 14,109,338 shares of its common stock to its four directors in exchange for the individual's satisfaction of bank debt of $423,280.  The related party individuals surrendered four certificates of deposit that had been pledged as collateral for the Company's credit facility with Professional Business Bank.  The surrender of the related parties' certificates of deposit facilitated the eventual settlement of the Company's dispute with the bank.  The dispute arose in part because of the Company being declared in default on the unpaid balance due the bank on the line of credit in July 2009.
  16
 Table of Contents
  Team Nation Holdings Corporation
 Notes to the Condensed Consolidated Financial Statements
 As of September 30, 2010 and December 31, 2009 and
 For the Three and Nine Month Periods Ended September 30, 2010 and 2009
 
  In two November 2009 transactions, Sunderland Capital, LLC (Sunderland) bought and then converted a total of $20,000 of the Company's recently modified related party convertible payables.  In each of the transactions, Sunderland converted a $10,000 tranche of the related party convertible payable 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 separate 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 at an average of $0.015 per share.
  On December 23, 2009, the Company issued its four 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 outstanding as of the date of conversion.  The preferred shares do not have liquidation preferences.  Each Series A Convertible Preferred share has voting right that represent 1% of all the Company's outstanding shares.
  In four separate 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 averaging $0.011 per share.
  Subleases - Related Parties
  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 CCTN2010 (remainder of year)

$
26,9932011


-2012


-2013


-2014 and thereafter


-Total minimum lease payments

$
26,993
 
 17
 Table of Contents
  Team Nation Holdings Corporation
 Notes to the Condensed Consolidated Financial Statements
 As of September 30, 2010 and December 31, 2009 and
 For the Three and Nine Month Periods Ended September 30, 2010 and 2009
  TEAM's sublease revenue from CCTN2010 (remainder of year)

$
21,2242011


84,8952012


17,6872013


-2014 and thereafter


-Total minimum sublease revenue

$
123,806
 
 5.       Uncollectible Amount and Related Settlement Gain
  In December 2007, TEAM entered into a management agreement with First Southwestern 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 voluntarily turned over their license to operate as a title company in the state of California to the California Department of Insurance.  The return of the title company license was based on FIRST's insufficient amounts of working capital and net worth.  When TEAM's management agreement with FIRST was terminated, the unpaid management fee receivable was determined to be uncollectible and the amount fully reserved.  As a partial resolution of the termination of the management agreement with FIRST, $261,279 of the amount that TEAM originally recorded as a reserve of doubtful accounts was determined to be subject to the right of offset against amounts due FIRST from CCTN.  There was $191,279 in excess of TEAM's 2009 management revenue from FIRST that was recognized in the nine month period ending September 30, 2009 as other income.  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 consisted 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 in substance was designed for JMJ to convert the JMJ Note Payable, in tranches, into TEAM common stock and pay down the JMJ Note Receivable with cash (Note 9).  Since the JMJ Note Receivable is in-substance a stock subscription, the Company recorded the JMJ Note Receivable as a reduction of equity rather than an asset.
  18
 Table of Contents
  Team Nation Holdings Corporation
 Notes to the Condensed Consolidated Financial Statements
 As of September 30, 2010 and December 31, 2009 and
 For the Three and Nine Month Periods Ended September 30, 2010 and 2009
 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 $20,759 at September 30, 2010.
  7.       Software and Leasehold Improvements
  Software and leasehold improvements are reported net of amortization and consist of the following:
   September 30,2010Software

$
64,584Leasehold improvements


1,36765,951Less: accumulated amortization


(24,946
)Software and Leasehold Improvements, net

$
41,005
 Amortization expense related to software and leasehold improvements for the three and nine month periods ended September 30, 2010 and 2009 was $5,499, $16,445, $117, and $195, 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 subject to a contractual limitation that they 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 Consolidated Financial Statements
 As of September 30, 2010 and December 31, 2009 and
 For the Three and Nine Month Periods Ended September 30, 2010 and 2009
 
  As 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.  As of the initial date of the convertible debt transaction, 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 shares of the Company's common stock (Note 12).  During the three and nine month periods ended September 30, 2010, Eventus converted $9,000 and $232,000 of the debt obligation into 13,787,878 and 50,086,724 common shares of the Company, respectively.  At September 30, 2010, the debt obligation balance to Eventus was $887,510.  The value of the embedded conversion feature decreased to $739,591 resulting in a decrease to the derivative liability and to the Company's loss of $471,908 and $1,217,535 for the three and nine month periods ended September 30, 2010.  Accretion of the debt obligation's debt discount for the three and nine month periods ended September 30, 2010 was $274,616 and $814,893. 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 Consolidated Financial Statements
 As of September 30, 2010 and December 31, 2009 and
 For the Three and Nine Month Periods Ended September 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 nine month periods ended September 30, 2010, JMJ converted $30,375 and $45,675 of debt obligation into 67,100,000 and 77,100,000 common shares of the Company. At September 30, 2010, the value of embedded conversion feature had decreased to $1,385,813, resulting in a decrease to the derivative liability and a decrease in the Company's loss of $300,822 and $863,437 for the three and nine month period ended September 30, 2010.  Accretion of the JMJ Note Payable debt discount for the three and nine month periods ended September 30, 2010 was $50,365 and $149,453.
  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 September 30, 2010 is as follows:
  Risk free interest rate
0.06% to 0.35%Expected volatility of common stock
308% to 346%Dividend yield
0.00%Expected life of conversion features
0.2-2.2 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 September 30, 2010 is $105,281 and $1,004, respectively. The current portion of the note payable is $72,437.
  21
 Table of Contents
  Team Nation Holdings Corporation
 Notes to the Condensed Consolidated Financial Statements
 As of September 30, 2010 and December 31, 2009 and
 For the Three and Nine Month Periods Ended September 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 increases 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 September 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

$
2,659,842



2,750,000Less current portion


155,271



104,882Long term debt to PBB

$
2,504,571


$
2,645,118
 
 For the three and nine month periods ended September 30, 2010 and 2009, interest expense on the PBB debt was $40,765, $109,922, $78,945 and $230,191, respectively.
  22
 Table of Contents
  Team Nation Holdings Corporation
 Notes to the Condensed Consolidated Financial Statements
 As of September 30, 2010 and December 31, 2009 and
 For the Three and Nine Month Periods Ended September 30, 2010 and 2009
 Maturity of all TEAM debt is as follows:
 Year ended December 31,2010 (remainder of year)

$
41,1012011


230,2892012


814,5902013


316,2712014 and beyond


1,902,197$
3,304,448
 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 September 30, 2010 and December 31, 2009, there were 60 shares issued and outstanding.
  Common stock
  The Company collected $13,430 of subscriptions receivable during the nine month period ended September, 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 Consolidated Financial Statements
 As of September 30, 2010 and December 31, 2009 and
 For the Three and Nine Month Periods Ended September 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 Consolidated Financial Statements
 As of September 30, 2010 and December 31, 2009 and
 For the Three and Nine Month Periods Ended September 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.
  During the three-month period ended September 30, 2010, Eventus converted 3 tranches of its convertible debt obligation totaling $9,000.  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 13,787,878 shares of the Company's common stock were issued in the three transactions.
  During the three-month period ended September 30, 2010, JMJ Financial converted 13 tranches of its convertible debt obligation totaling $30,375.  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 67,100,000 shares of the Company's common stock were issued in the thirteen transactions.
  At September 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.
  25
 Table of Contents
  Team Nation Holdings Corporation
 Notes to the Condensed Consolidated Financial Statements
 As of September 30, 2010 and December 31, 2009 and
 For the Three and Nine Month Periods Ended September 30, 2010 and 2009
 
 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.
  Authorized Shares
  At September 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 September 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)

$
62,4922011


145,4582012


30,4932013


-2014 and thereafter


-Total minimum lease payments

$
238,443
 
 Rental expense was $42,384, $114,924, $8,420 and $83,003 for the three and nine month periods ended September 30, 2010 and 2009, respectively.  Rental expense is net of sublease income of $21,223, $63,671, $21,224 and $45,985 for the three and nine month periods ended September 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 Consolidated Financial Statements
 As of September 30, 2010 and December 31, 2009 and
 For the Three and Nine Month Periods Ended September 30, 2010 and 2009
 
 Going Concern
  The accompanying financial statements have been prepared assuming the Company will continue as a going concern.  At September 30, 2010, the Company had negative working capital of $4,444,072, total liabilities of $7,139,043, and a stockholders’ deficit of $4,104,760.  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 $2,225,492 at September 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 nine month periods ended September 30, 2010 and 2009:
  For the


For the


For the


For theThree Month


Three Month


Nine Month


Nine MonthPeriod Ended


Period Ended


Period Ended


Period EndedSeptember 30,


September 30,


September 30,


September 30,2010


2009


2010


2009Numerator:Net income (loss)

$
272,333


$
(293,864
)

$
375,694


$
(766,589
)Denominator:Weighted average number of common shares outstanding


156,576,679



53,210,924



109,468,030



49,207,087Incremental shares resulting from the assumed conversion of debt and preferred stock


3,085,369,232



-



717,037,305



-Diluted common shares outstanding


3,241,945,911



53,210,924



826,505,335



49,207,087Net income (loss) per share:Basic

$
0.00


$
(0.01
)

$
0.00


$
(0.02
)Diluted

$
0.00


$
(0.01
)

$
0.00


$
(0.02
)
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  Team Nation Holdings Corporation
 Notes to the Condensed Consolidated Financial Statements
 As of September 30, 2010 and December 31, 2009 and
 For the Three and Nine Month Periods Ended September 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 September 30,2010


2009Series A Preferred Shares


117,539,518



-Shares issuable upon conversion of debt


5,236,929,472



-
  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 September 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.
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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.
 
 At September 30, 2010 we had negative working capital of $4,444,072 and incurred an operating loss of $946,719 during the nine month period ended September 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. 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 into 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 tranches of up to $10,000 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. However, recently, JMJ has voluntarily decreased the conversion amount to approximately $3,000 per conversion. 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 663 million shares of the over 717 million share difference between basic and diluted weighted average shares outstanding on the statement of operations for the 3rd 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 nine-months ended September 30, 2010, the derivative liability has decreased by $2,080,972 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 $2,125,404 as of September 30, 2010 which is approximately 48% of the working capital deficiency that exists as of 9/30/2010. On the statement of operations, accretion of debt discount expense for the  nine month period ended September 30, 2010 ($964,346) and for the 3rd quarter of 2010 ($324,981) 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 the Nine Month Period Ended September 30, 2010 to the Nine Month Period Ended September 30, 2009
 
 Revenues
 
 Our revenue during the nine month period in 2010 totaled $1,254,428 compared to $1,789,899 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 85.4% of revenue in 2009). A small amount of joint marketing revenue was generated in the nine months of 2010 ($1,688) as the company’s plans for this revenue stream began to take effect in the 4th quarter of 2009 and has not materialized in 2010 as much as management had hoped.
 
 Costs and expenses
 
 General and administrative expense amounted to $912,480 in 2010 as compared to $935,816 in the prior period reflecting efforts to cut overhead in light of the decrease in title orders overall for the year. In the 3rd quarter presentation, $106,000 in Director Fees have been separated out that are being paid and used mostly to reduce outstanding shareholders notes receivable per Board authorization. This began in April 2010 at the rate of $4,000 per director per month.
 
 Title plant search fees decreased from $688,342 to $570,061 as these data charges are a variable cost that is directly related to the title order decrease when comparing the 1st nine months of 2009 and 2010. Customer service expenses decreased from $184,137 to $21,295 and have been completely phased out (any expense in 2010 reflects the expenses for this service prior to the phase out).
 
 Selling expenses have increased from $3,282 to $102,702 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. As a part of this plan, in the third quarter of 2010 we formed a wholly owned subsidiary, TEAM Title Inc., a Delaware corporation which was developed in 2010 to become the national license arm of TEAM Nation Holdings.  Through the third quarter 2010 TEAM Title, Inc. has achieved authority (through licensing expense to state governments) to conduct title and settlement transaction in the District of Columbia, Georgia, Iowa, Kentucky, Minnesota, New Jersey, New York, Pennsylvania, Rhode Island and West Virginia.  The business plan for TEAM Title includes licensing in an additional 28 states, including Arizona, Florida, Nevada and Texas over the next three quarters.  Once licensed, TEAM Title will conduct direct title and settlement services in the licensed areas and will focus its marketing efforts to regional and national lenders, asset managers, and banking centers.
 
 Related party management fees decreased from $151,200 to $100,800 as services were terminated in February 2010. Also, 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 is reported as an “other income” item on the statement of operations.
 
 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 began April 1, 2010 at the rate of $4,000 per month per Director to begin paying down these notes. Interest expense decreased from $230,192 to $109,922 between the comparable nine 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 nine months ended September 30, 2009.
 
 Comparison of the Three Month Period Ended September 30, 2010 to the Three Month Period Ended September 30, 2009.
 
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 Revenues
 
 Our revenue during the three month period ended September 30, 2010 totaled $491,124 compared to $614,919 during the same period in the prior year. Management fees other than what is reported as related party were from First Southwestern Title Company in 3rd Quarter 2009 totaling $201,279. That was no longer a viable revenue stream as of 3rd quarter 2009 as that company went out of business in that time period. Related party management fees increased in the comparable 3rd quarters due to a 26% increase in orders from a title company owned by our officers and directors.
 
 Costs and expenses
 
 General and administrative expense decreased from $311,897 in 2009 as compared to $251,156 in 2010.  Some cuts have been necessary in 2010 in light of the downturn of overall title orders in 2010, even though orders have increased in the comparable 3rd quarters in 2009 and 2010. In the 3rd quarter presentation, $58,000 in Director Fees have been separated out that are being paid and used mostly to reduce outstanding shareholders notes receivable per Board authorization. This began in April 2010 at the rate of $4,000 per director per month.
 
 Title plant search fees increased from $190,755 to $198,783 as these data charges are a variable cost that is directly related to the title order increase when comparing the 3rd quarters of 2009 and 2010. Title plant processing and general fees decreased in 2010 as this is mostly fixed, personnel expenses (as opposed to search fees) that have been cut to reflect the overall decrease in title orders for the year. Customer service expenses have been completely phased out ($56,842 to $79) and any expense in 2010 reflects the expenses for this service prior to being completely phased out.
 
 Selling expenses have increased from $0 to $45,506 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. As a part of this plan, included in the financial statements of the Company is wholly owned subsidiary TEAM Title Inc., a Delaware corporation which was developed in 2010 to become the national license arm of TEAM Nation Holdings.  Through the third quarter 2010 TEAM Title, Inc. has achieved authority (through licensing expense to state governments) to conduct title and settlement transaction in the District of Columbia, Georgia, Iowa, Kentucky, Minnesota, New Jersey, New York, Pennsylvania, Rhode Island and West Virginia.  The business plan for TEAM Title includes licensing in an additional 28 states, including Arizona, Florida, Nevada and Texas over the next three quarters.  Once licensed, TEAM Title will conduct direct title and settlement services in the licensed areas and will focus its marketing efforts to regional and national lenders, asset managers, and banking centers.
 
 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. Non related party interest income reported for 3rd quarter 2010 is higher than comparable 2009 solely due to accrued interest income on the JMJ financing which was not in effect until November 2009. 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 shareholder notes. Interest expense decreased from $78,946 to $40,765 between the comparable three 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 3rd 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/CEONovember 15, 2010By:
/s/ Daniel J. DuffyDaniel J. Duffy, Principal Financial OfficerNovember 15, 2010
 
 
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