UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington D.C. 20549





FORM 10-K










(Mark One)


x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009 OR





o
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ___________ TO ______________





Commission file number: 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)
(IRS Employer Identification No.)





4667 MacArthur Boulevard, Suite 150, Newport Beach, CA 92660(Address of principal executive offices) (Zip Code)





Issuer's telephone number:949 885 9892





Securities Registered Under Section 12(b) of the Exchange Act:   None





Securities Registered Under Section 12(g) of the Exchange Act:   None








(Title of class)





Indicate by check mark if the registrant is well-known seasoned issuer, as defined in Rule 405 of the Securities Act    Yes o    No x





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





Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   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 (§ 229.405 of this chapter) during the preceeding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes o     No o





Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K contained in this form, and no disclosure will be contained, to the best of the issuer’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o




Table of Contents





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 filer o



Non-accelerated filer o

(Do not check if smaller reporting company)
Accelerated filer o



Smaller reporting company x




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





State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: (47,191,894 shares) based on the average bid and asked price as of June 30, 2009:  $6,842,824.63





State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 85,347,442 shares of Common Stock as of March 29, 2010.





Documents Incorporated by Reference: None





NOTE REGARDING FORWARD LOOKING STATEMENTS





This Form 10-K and the documents we incorporate by reference contain certain forward-looking statements that involve a number of risks and uncertainties. These statements include changes in national and regional housing demand and values, the levels of interest and inflation rates, the availability and cost of mortgage loans, employment trends, default rates on mortgage loans, those factors listed under the caption “Risk Factors” and other factors set forth elsewhere in this Form 10-K. These statements, in addition to statements made in conjunction with the words “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” and similar expressions, are forward-looking statements within the meaning of the Safe Harbor provision of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements relate to future events or our future financial performance and only reflect management’s expectations and estimates. The following is a list of factors, among others, that could cause actual results to differ materially from the forward-looking statements:




•
The costs of producing title evidence are relatively high, while premiums are subject to regulatory and competitive restraints.•
Real estate activity levels have historically been cyclical and are influenced by the overall economy, particularly interest rates.•
The title insurance industry may be exposed to substantial claims by large classes of claimants.•
The industry is regulated by state laws that require the maintenance of minimum levels of capital and surplus and that restrict the amount of dividends that may be paid by our insurance subsidiary.





We undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this Form 10-K to conform them to actual results. We do not, nor does any other person, assume responsibility for the accuracy and completeness of those statements. All of the forward-looking statements are qualified in their entirety by reference to the factors discussed under the caption “Risk Factors.”





We caution the reader that these risk factors may not be exhaustive. We operate in a continually changing business environment, and new risk factors emerge from time to time. We cannot predict such new risk factors, nor can we assess the impact, if any, of such new risk factors on our businesses or the extent to which any factor or combination of factors may cause actual results to differ materially from those projected in any forward-looking statements. In light of these risks, uncertainties and assumptions, the forward-looking statements discussed in this Form 10-K and the documents we incorporate by reference might not occur.





For these statements, we claim the protection of the safe harbor for forward-looking statements contained in Section 21E of the Securities Act.





You should carefully read this Form 10-K and the documents incorporated by reference in their entirety. They contain information that you should consider when making your investment decision.




Table of Contents





TABLEOF CONTENTS


PagePART IItem 1.


Description of Business
3Item 1A


Risk Factors
7Item 1B


Unresolved Staff Comments
10Item 2.


Description of Properties
10Item 3.


Legal Proceedings
11Item 4.


Submission of Matters to a Vote of Security Holders
11PART IIItem 5.


Market for Registrant's Common Equity and Related Stockholder Matters
12Item 6.


Selected Financial Data
12Item 7.


Management's Discussion and Analysis of Financial Condition and Results of Operation
13Item 8.


Financial Statements and Supplementary Data
14Item 9.


Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
15Item 9A.


Controls and Procedures
15PART IIIItem 10.


Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act
17Item 11.


Executive Compensation
19Item 12.


Security Ownership of Certain Beneficial Owners and Management And Related Stockholder Matters
22Item 13.


Certain Relationships and Related Transactions
23Item 14.


Exhibits, Financial Statement Schedules
25Item 15.


Principal Accounting Fees and Services
26SIGNATURES



27








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ITEM1 — DESCRIPTION OF BUSINESS





SUMMARY





We were incorporated as Suncross Exploration Corporation in Nevada on November 16, 2004. On June 17, 2008, Suncross Exploration Corporation (“Suncross”) entered into an Agreement and Plan of Reorganization dated as of June 17, 2008 relating to the acquisition (“Acquisition”) of Team Nation Holding Corporation (“Team”).  With the acquisition of Team, Suncross became a company specializing in title insurance and escrow services through our affiliate title agency(ies), and the provision of management, production services, HR administration, IT support, and accounting administration for title insurance companies and related real estate ventures. Under the terms of the acquisition, Suncross issued 25,000,000 shares (“Suncross Shares”) of its restricted common stock to the four (4) shareholders of Team in exchange for 100% of the issued and outstanding shares of Team. 22,000,000 shares were subsequently transferred to CalCounties Title Nation Company, a California corporation owned by Dennis R. Duffy-one third; Daniel J. Duffy-one third; and Janis Okerlund-one-third.





Historically, we also participated in the management of distressed asset funds specializing in the acquisition of distressed RMBS, CMBS, CMO, CDO and REO assets. Having found that market to be too volatile, we have refocused our attention to the title insurance services which are the core of our business.





Title Insurance Services:   Our services are offered to residential and commercial customers, independent and affiliated title agencies, and related companies in the real estate and mortgage lending industries throughout the United States, predominantly in the State of California. We currently provide services including HR, IT, accounting, production and customer service to CalCounties Title Nation (“CCTN”) which operates 2 branch offices and employs approximately 80 individuals located in California. In December, 2009 we formed TEAM Title LLC, a Delaware limited liability company, which is obtaining licenses to provide direct operations in 35 states nationally.  In March 2010 we converted TEAM Title LLC to a Delaware corporation.  Through expansion of existing operations, we have achieved substantial growth during the last year and intend to use strategic licensing and acquisition strategies to grow exponentially in the coming year.





Our strategy to turn away from the risk inherent distressed asset market to focus on our core title services business has enabled us to:


•
expand our geographic footprint to offer real estate services on a nationwide basis through our vast referral network;•
diversify our customer base by targeting national real estate lenders and mortgage brokers, in addition to our traditional focus on real estate agents and regional lenders in the Southwestern United States;•
serve as the exclusive provider of settlement and information services in closing a real estate transaction; and•
increase our revenue opportunities for each transaction without significantly increasing our fixed costs.





Operating Strategy





We attribute our success to an operating strategy which emphasizes the following factors:





Commitment to Service.


•
We believe that title insurance policies and escrow functions are generally standardized, and that the level of service provided is therefore the key differentiating factor among title industry competitors. We are committed to providing an unparalleled quality of service to our customers, and we emphasize the importance of that culture of service to all of our employees. Our advanced technology platform facilitates our prompt and efficient delivery of title and escrow services. Through our commitment to service, we strive to build lasting and personal relationships with our real estate industry clients.





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Customer and Market Focus.


•
Our services and marketing for our traditional title insurance and escrow segment are directed primarily to real estate agents and lenders in the residential resale and refinance sectors of the market, which we believe are less prone to cyclical industry downturns associated with changing interest rates than the commercial real estate and new home sectors.





•
In the residential resale market, we focus on establishing relationships with real estate agents, who typically direct the selection of escrow and title insurance services by their clients. Although title insurance premiums are typically paid by the buyer or seller of residential property, depending on local custom, the real estate agent responsible for the closing generally selects the title agent because of his or her greater familiarity with service levels. All parties to the home closing are concerned with personal time schedules and the costs associated with settlement delays. We provide title search and escrow services in connection with the resale transaction, and we arrange for the issuance of owner and lender title insurance policies at closing either directly as agent for other national title insurers or indirectly through our referral network via our national coordinators.





•
In the residential refinance market, we actively promote relationships with community banks and other lenders who refinance existing mortgage loans. Although the borrower pays our fees, we view these lenders as our customers because they typically direct the selection of escrow and title insurance by their borrowers. Our services in a refinance transaction also include title search and escrow services in connection with the refinancing of the existing mortgage loan, and the issuance of a lender title insurance policy in favor of the new lender.





•
Our lender services are provided and marketed to national lenders and mortgage brokers. Unlike our traditional title and escrow services, these services are typically offered on a national scale from centralized processing centers. We believe this approach allows us to focus on providing high quality service while managing our costs.





Operating Flexibility.


•
The cyclical nature of the title insurance industry requires us to consistently manage operating expense levels in response to market fluctuations. Our executives and key managers have extensive experience in controlling expenses to reflect cyclical industry movements. We control our most significant cost item, personnel expenses, through use of temporary personnel and overtime personnel as needed, reduction in staffing levels when appropriate, and commission and incentive elements of our compensation structure that vary significantly with changes in our revenue levels. Because the existing cycle has been a downward one in the industry, we have been able to grow counter-cyclically to attract key personnel and opportunities from companies that are downsizing significantly due to market constriction and over burdensome overhead.





•
We also seek to maintain financial and other operating flexibility by controlling other significant expense items, including contracts for data services for title and property information, which are structured based on usage; supply costs, which are variable based on business volume; and provisions for title and escrow losses, which correlate generally to revenue levels. We also manage our fixed costs such as rent by entering into relatively short term leases, typically three to five years.





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Experienced Management Team.


•
We focus on attracting and retaining the highest quality management and operational personnel available. Our executives and other key managers have an average of over 20 years experience in the title insurance industry, and directly participated in the successful development and operation of several large regional title agency networks, major title insurance underwriters and providers of various real estate settlement services. In addition, our entrepreneurial culture, growth record, incentive compensation structure and dedication to customer service help us to continually attract top producers with established client relationships.





•
Our operational management is centralized, with our key managers given primary responsibility for operations in their respective areas of service. Regular meetings of key managers allows for an exchange if ideas, feedback, suggestions and overall transparency in the management team so that management decisions made in one service area are sympathetic to the needs of the company at large.





Growth Strategies





Our primary long-term objectives are to become a national provider of title insurance and integrated real estate services and to maximize our profits throughout different real estate cycles. Counter-cyclical growth is a primary goal while the economy continues to struggle, creating opportunities to implement our strategies effectively. To accomplish our objectives, we are pursuing various growth strategies that include both acquisitions and organic growth, all of which are designed to broaden our market position and maximize profitability. Specifically, these strategies include:





Increasing Share of Existing Markets.


•
Our title and escrow operations are concentrated in Southern California which provides a particularly strong platform for future growth because Southern California traditionally ranks high in relation to other states in the rate of new job creation and population growth. We operate branch offices in two of the largest and most active real estate markets in the nation: greater Los Angeles and Orange County, California.





•
We intend to expand operations in existing and target markets by continually attracting top producers and establishing lean marketing branch offices in those markets, while retaining centralized processing. Unlike competitors who expand physical operations, including title production, customer service and property information services into each location, we believe that adding revenue without corresponding increases in fixed operational costs should significantly improve our operating margins in those markets.





Expanding Geographically.


•
From our base in the southland, we intend to expand licensing to cover all of California and add licensing throughout the nation to enable our entry into desirable markets. Traditional expansion strategies include replicating operations in every market but our strategy relies heavily on centralization of core services from production and customer service to IT administration and accounting support. By using our management services business model we can focus on marketing and revenue strategies in the new marketplace while continuing to increase efficiency by centralizing repetitive services. We will entertain regional offices or strategic acquisitions in target markets as well to augment our growth strategy and ensure we grow with focus and minimal operating expense. we do not currently serve to build a national presence with branch operations in states with either high growth or in which major population centers exist.





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Vendor and Production Services:   Team currently holds contracts to provide vendor and production services to the largest independent title agency in Orange and Los Angeles counties, California.  Services include title plant and production services, customer service, sales and marketing support, HR administration, IT administration and accounting services in exchange for fees.  TEAM’s bundled resources have allowed the agency to grow significantly and have made it a target acquisition for TEAM, which has the right to purchase 100% of the agency upon approval of the California Department of Insurance.





Escrow Operations:   Team wholly owns Escrow Nation, a California corporation licensed to transact escrow business by the California Department of Corporations.  Escrow Nation is currently inactive, but available as a tool as the market presents revenue opportunities. Escrow Nation can add value to the overall performance of Team by capturing escrow revenue for services to its affiliate entities and to its investors. As the family of companies owned and managed by Team grows, Escrow Nation will grow in concert and will allow Team to capture additional revenue from its core operations.





Mortgage Operations:   Mortgage Nation, Inc. is wholly owned by Team and is licensed to provide mortgage broker services to its affiliates, employees and investors.  Mortgage Nation is currently inactive, but available as a tool as the mortgage industry recovers and presents revenue opportunities.





Acquisition strategy:   Team is committed to finding, analyzing and acquiring failing real estate companies, particularly title agencies, title insurance companies licensed both in California and throughout the United States, escrow, and mortgage companies to acquire their revenue streams and inventories and to adjust their infrastructure to mitigate expenses.  Already poised to support growing operations, we can pick up the business at hand without needing to increase staff or duplicate costly services.  Team has identified several such opportunities and currently has exclusive rights to purchase an agency in Southern California. Team is also in negotiations to acquire a title insurance underwriter and a potential join venture with two companies situated outside of California.





Competition





The title insurance and real estate settlement services business is highly competitive. We believe that quality and timeliness of service are the key competitive factors in the industry because parties to a real estate transaction are usually concerned with time schedules and costs associated with delays in the closing of transactions. Other competitive factors in the title and escrow business include pricing and the financial strength of the title insurance underwriter.





Companies with significant market share in the local and regional markets in which we compete include First American, Fidelity National Title, Chicago Title and Ticor Title. The number and size of competing companies varies in different geographic markets and has significantly diminished in the last 18 months due to market contraction. In those markets where we operate and intend to operate, we will face competition from other independent agencies although several competitor agencies have discontinued service, sold to other underwriters or gone out of business since the end of 2006. Major national insurance underwriters, many of which have financial and other resources significantly greater than ours are the largest competitor but, we believe that we can effectively compete against these larger competitors in the markets that we serve. We believe that our level of service and our nimble operating structure are the principal differentiating factors which have enabled us to compete effectively with our competitors, even in the challenging industry market conditions we face.




The principal competitors for our vendor services are title companies such as First American and Fidelity National Title, both of which primarily outsource their title production and customer service functions to overseas operations. We believe our commitment to customer service and consistent performance are more valuable to our vendor services clients and the ability to centralize locally has enabled us to significantly reduce expenses for our clients and managed companies and will continue to do so without the need to send our production services overseas.





Employees





As of March 15, 2010, we had a total of 31 direct employees. We believe our relations with our employees are excellent.




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ITEM1A — RISK FACTORS





The risk factors listed in this section and other factors noted herein or incorporated by reference could cause our actual results to differ materially from those contained in any forward-looking statements. The following risk factors, in addition to the information discussed elsewhere herein, should be carefully considered in evaluating us and our business:





The demand for our title insurance and related services is highly dependent upon the volume of real estate transactions and other general economic conditions, and our future revenues and profits may decline as interest rates stabilize or rise.





The demand for title insurance, management, and production services depends upon, among other things, the volume of commercial and residential real estate transactions. The volume of these transactions has historically been influenced by factors such as mortgage interest rates and the state of the overall economy. When mortgage interest rates are increasing or during an economic downturn or recession, real estate activity typically declines and the title insurance and related industries tend to experience lower revenues and profitability. For example, stable mortgage interest rates and strength in the real estate market, especially in California and throughout the West Coast, contributed to very positive conditions for the title insurance industry from 2003 through 2006. However, beginning in late 2007 through present, the seizure of the credit markets, failure of financial institution, dramatic increase in defaults on home mortgages and the collapse of home values resulted in a significant decline in real estate transactions. As a result, the market shifted from a refinance-driven market in 2003-2006 to a market driven by short sale, REO, loan modification and investor driven purchases.





Beginning in December of 2008, the level of refinance activity increased, due in significant part to substantial decreases in mortgage interest rates. As of December 31, 2009, the volume of refinance activity has declined somewhat but remains significantly higher than the volume in 2007 and 2008. In the 2nd and third quarters of 2009, resale transactions increased significantly as investors and undecided buyers entered the market to take advantage of decreased prices and low interest rates.   We cannot predict changes in the interest rate environment in future periods and its complete impact on residential resale and refinance activity. While we expect interest rates and prices to remain low through 2010 and into 2011, if mortgage interest rates rise quickly and significantly during 2010, it would likely negatively affect opened orders and, in turn, have a negative impact on our revenue levels and profitability.





Our success depends on our ability to attract and retain key personnel.





Competition for personnel in our industry is historically intense. We may have difficulty hiring the necessary sales, marketing and management personnel to support our growth. The successful implementation of our business model and growth strategy depends on the continued contributions of our seasoned executives and key managers. The loss of any key employee, the failure of any key employee to perform in his or her current position, or the inability of our officers and key managers to expand, train and manage our employee base could prevent us from executing our growth strategy and have a material adverse effect on our business.





Additionally, competition for personnel varies from region to region and increased costs may hurt our financial performance in certain regions. For example, competition for key personnel in California has substantially increased our costs of attracting and retaining personnel. Additional personnel cost increases in this or other regions could lower our profits.




The title insurance industry experiences seasonal fluctuations.





Historically, residential real estate activity has been generally slower in the winter, when fewer families move, buy or sell homes, with increased volumes in the spring and summer. Residential refinancing activity generally is more uniform throughout the year, subject to interest rate stability. Demand for our title insurance and related services generally tracks these seasonal demand patterns of the residential real estate market, although acquisitions of other title insurance companies and changes in interest rates may alter these traditional seasonal demand patterns. We typically report our lowest revenues and earnings in the first quarter, with revenues and earnings increasing into the second quarter and through the third quarter and declining again in the fourth quarter.





Our business is highly competitive and increased competition could reduce our revenues and profitability.





The business of providing real estate transaction products and services is highly competitive, particularly with respect to price, service and expertise. According to Demotech, Inc., the top five title insurance companies accounted for over 90% of net premiums collected in 2008. Over 40 independent title insurance companies accounted for less than 10% of the market. The number and size of competing companies varies in the different geographic areas in which we conduct our business. Companies with significant market share in the local and national markets in which we compete include First American, Old Republic, Stewart Title, and Fidelity National Title. All of the top five title insurers have larger distribution networks, greater financial resources, more extensive computerized databases and longer standing relationships than us. The number and size of competing companies varies in the different geographic areas in which we conduct our business. Also, the removal of regulatory barriers might result in new competitors entering the title insurance business, and those new competitors may include diversified financial services companies that have greater financial resources than we do and possess other competitive advantages. Competition with the major title insurance companies, expansion by smaller regional companies and new entrants could adversely affect our business operations and financial condition.




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We may not be able to implement successfully our strategy of selectively acquiring other businesses in the title insurance industry and related industries.





As part of our overall growth strategy, we intend to acquire selectively businesses in our industry and related industries that will allow us to enter new markets, provide services that we currently do not offer or advance our existing technology. Our ability to implement our selective acquisition strategy will depend on our success in identifying and consummating acquisitions of businesses on favorable terms. Although we also are actively seeking other acquisition candidates, we can give no assurance that we will be successful in these efforts. If we are unable to acquire appropriate businesses on favorable economic terms, or at all, or are unable to introduce new products and services successfully, our business could be materially adversely affected.





We may encounter difficulties managing and integrating our acquisitions.





Part of our continued growth strategy is to pursue additional opportunities to diversify and expand our operations by acquiring other companies. The success of each acquisition will depend upon our ability:




•
to integrate the acquired businesses' operations, products and personnel to achieve synergies and economies of scale;•
to retain key personnel of the acquired businesses;•
to maintain the customers and goodwill of the acquired businesses;•
manage any unexpected costs or unforeseen liabilities associated with the acquired businesses; and•
to expand our financial and management controls and reporting systems and procedures.




Security breaches and computer viruses could harm our business by disrupting our delivery of services and damaging our reputation.





We electronically receive, process, store and transmit sensitive business information of our customers. Unauthorized access to our computer systems could result in the theft or publication of confidential information, the deletion or modification of records or otherwise cause interruptions in our operations. These concerns about security are increased when we transmit information over the Internet. Computer viruses have also been distributed and have rapidly spread over the Internet. Computer viruses could infiltrate our systems, disrupting our delivery of services and making our products unavailable. Any inability to prevent security breaches or computer viruses could cause existing customers to lose confidence in our systems and terminate their agreements with us, and could inhibit our ability to attract new customers.





We may experience significant claims relating to our title insurance operations and losses resulting from fraud, defalcation or misconduct.





A significant component of our revenue arises from issuing title insurance policies which typically provides coverage for the real property mortgage lender and the buyer of the real property. As a result, we retain insurance risk up to $5,000 on policies we issue through our agency operations. If we are successful in our bid to acquire or from a title insurance underwriter, our retained insurance risk will increase up to and including $2.0 million in some cases. We may also be subject to a legal claim arising from the handling of escrow transactions. We carry errors and omissions insurance coverage for errors made during the real estate settlement process of up to $1.0 million per occurrence, $1.0 million in the aggregate, subject to a deductible of $10,000 per occurrence. The occurrence of a significant title or escrow claim in any given period could have a material adverse effect on our financial condition and results of operations during the period.





Fraud, defalcation and misconduct by employees are also risks inherent in our business. As of December 31, 2008, we were the custodian of approximately $30 million of cash deposited by customers with specific instructions as to its disbursement from escrow, trust and account servicing files. We carry insurance covering the loss or theft of funds of up to $1.0 million annually in the aggregate, subject to a deductible of $10,000 per occurrence. To the extent that any loss or theft of funds substantially exceeded our insurance coverage, our business could be materially adversely affected.




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Our insurance agency is subject to substantial government regulation.





State authorities regulate our insurance agency in the state in which it does business. These regulations generally are intended for the protection of policyholders rather than stockholders. The nature and extent of these regulations vary from jurisdiction to jurisdiction, but typically involve:


•
approval of premium rates for insurance;•
standards of solvency and minimum amounts of statutory capital surplus that must be maintained;•
limitations on types and amounts of investments;•
establishing reserves, including statutory premium reserves, for losses and loss adjustment expenses;•
regulation of dividend payments and other transactions between affiliates;•
prior approval of the acquisition and control of an insurance company or of any company controlling an insurance company;•
licensing of insurers and agents;•
regulation of reinsurance;•
restrictions on the size of risks that may be insured by a single company;•
regulation of underwriting and marketing practices;•
deposits of securities for the benefit of policyholders;•
approval of policy forms;•
methods of accounting; and•
filing of annual and other reports with respect to financial condition and other matters.




These regulations may impede or impose burdensome conditions on rate increases or other actions that we might want to take to implement our business strategy and enhance our operating results. Additionally, as a result of having operations within an industry that is governed by various regulatory authorities, the sometimes fast-changing regulatory environment could impact the way we operate and compete in the markets we serve.





If we fail to comply with privacy regulations imposed on providers of services to financial institutions, our business could be harmed.





As a provider of services to financial institutions, we are bound by the same limitations on disclosure of the information we receive from our customers as apply to the financial institutions themselves. If we fail to comply with these regulations, we could be exposed to suits for breach of contract or to governmental proceedings, damage our customer relationships, harm our reputation and inhibit our ability to obtain new customers. In addition, if more restrictive privacy laws or rules are adopted in the future on the federal or state level, or, with respect to our international operations, by authorities in foreign jurisdictions on the national, provincial, state or other level, then it could have an adverse impact on us.





Our stock price might be volatile and you might not be able to resell your shares at or above the price you have paid.





If you purchase shares of common stock, you might not be able to resell those shares at or above the price you have paid. The market price of our common stock might fluctuate significantly in response to many factors, some of which are beyond our control, including the following:




•
actual or anticipated fluctuations in our annual and quarterly results of operations;•
changes in securities analysts' expectations;•
variations in our operating results, which could cause us to fail to meet analysts' or investors' expectations;•
announcements by our competitors or us of significant technical innovations, contracts, acquisitions, strategic partnerships, joint ventures or capital commitments;•
conditions and trends in the title insurance and real estate business;•
general market, economic, industry and political conditions;•
changes in market values of comparable companies;•
additions or departures of key personnel;•
stock market price and volume fluctuations attributable to inconsistent trading volume levels; and•
future sales of equity or debt securities, including sales which dilute existing investors.





In addition, the stock market has experienced extreme volatility that often has been unrelated to the performance of its listed companies. These market fluctuations might cause our stock price to fall regardless of our performance. In the past, companies that have experienced volatility in the market price of their stock have been the objects of securities class action litigation. If we were involved in securities class action litigation, it could result in substantial costs and a diversion of our attention and resources and have a material adverse effect on our business.




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Certain provisions of our certificate of incorporation, granting our board of directors broad discretion to issue shares of preferred stock, may adversely affect your rights as a common stockholder.





Our board of directors may, without further action by our common stockholders, from time to time, issue shares of our authorized but unissued preferred stock, and determine the rights, preferences and limitations of each series of preferred stock. Upon the vote of a majority of the directors then in office, our board of directors, without stockholder approval, may issue shares of preferred stock with dividend, liquidation, voting, conversion and other rights superior to the rights of our common stockholders. Satisfaction of any dividend preferences of our outstanding redeemable preferred stock and future issuances of preferred stock would reduce the amount of funds available for the payment of dividends on shares of common stock. Holders of shares of preferred stock may be entitled to receive a preference payment in the event of any liquidation, dissolution or winding-up of our company before any payment to our common stockholders. Under some circumstances, the issuances of shares of preferred stock may make a merger, tender offer or proxy contest or the assumption of control by a holder of a large block of our securities or the removal of incumbent management more difficult. Any issuances of our preferred stock thus may have a material adverse effect on your rights as a common stockholder.





ITEM1B — UNRESOLVED STAFF COMMENTS


As a smaller reporting Company, the Company is not required to include this Item.





ITEM2 — DESCRIPTION OF PROPERTIES





We conduct our title insurance business operations in leased office space. We currently lease branch offices in Newport Beach and Pasadena, California. Our branch office leases generally provide for initial terms ranging from three to five years, and our current leases run from 18 to 36 months. We believe that the use of short-term office leases enhances our operating flexibility, which is particularly important because of the cyclical nature of the real estate industry.





We occupy a leased facility of approximately 4,500 square feet in Newport Beach, California, in which our executive offices are located. We sublease 2000 square feet of the space to CCTN, which houses a title and escrow unit in the facility.





In Pasadena, California, we sublease approximately 2400 square feet in which is located our title plant and production services, customer service, and one executive office.





In  March, 2009 we vacated our sublease in Irvine California and have no continuing obligation under its terms.





We have leases on various storage facilities throughout the southland that house our extra furniture, equipment, secure file storage and miscellaneous items.





See Notes to our consolidated financial statements for additional information relating to our lease commitments.





We believe that our facilities are adequate to meet our current needs and that additional facilities are available to meet our development and expansion needs in existing and projected target markets.





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ITEM3 — LEGAL PROCEEDINGS





In the ordinary course of business, our insurance agency(ies) are subject to claims and are named as defendants in litigation relating to policies of insurance or other related services performed on behalf of insured policyholders and other customers. While the results of insurance claims and litigation cannot be predicted with certainty, management believes, based on the advice of legal counsel, that the final outcome of such lawsuits and claims will not have a material adverse effect on our financial position, results of operations, or liquidity.





On September 8, 2008 we filed suit in the Superior Court of California, Orange County, against Professional Business Bank, for, among other things, interference with business prospects and violation of our rights of privacy relative to a line of credit and loan made by Professional Business Bank to our subsidiary holding company. Professional Business Bank responded by calling both loans due and we are currently in arbitration on the matter. In November, 2009, we entered into a material agreement for settlement of the lawsuit and counter claims.  The agreement reached between the parties will result in dismissal of the court claims made against PBB, counterclaims made by PBB against TEAM and dismissal of the arbitration process between the parties.  Under the agreement, TEAM will realize a net reduction of $1,031,842.00 from its payables, while entering into the settlement agreement. In the settlement, four officers and directors of TEAM agreed to surrender certain Certificates of Deposit held at PBB in the interest of TEAM that will be paid immediately upon performance of the actions under the Settlement Agreement. PBB agreed to provide financing that supersedes prior financing between the Parties, in an amount to be $2.75 million dollars at a 5% interest rate with monthly payments of $20,000 per month, increasing by $5,000 per annum with a five year balloon payment due. This refinancing under the agreement will repay two notes, of $2,381,494.43 and $999,797.01. Personal Guaranties were executed by Dennis R. Duffy, Daniel Duffy, Janis Okerlund and Norman Francis for purposes of securing the settlement on behalf and for the benefit of TEAM.. A stipulated judgment of $3,215,062.37 in favor of PBB shall be filed if any default occurs. Neither TEAM nor PBB made any concessions regarding the merits of the separate parties’ claims and counterclaims in the settlement agreement.





ITEM4 — SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





None





11
 Table of Contents


PART II





ITEM5 — MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS





(a)        The Registrant’s common stock is traded in the over-the-counter market under the symbol TEMN (OTC Bulletin Board Symbol) and has traded under the Symbol since July 7, 2008. Prior to this date and the reorganization with Suncross Exploration, the company’s common stock had the symbol SCXC though was not quoted by any market maker and no trade data is available. The table below sets forth the high and low bid prices of the Registrant’s common stock for the periods indicated. Such prices are inter-dealer prices, without mark-up, mark-down or commissions and do not necessarily represent actual sales.




Period Ending

High

Bid


Low

Bid


High

Ask


Low

Ask12/31/2009


0.03



0.02



0.03



0.0209/30/2009


0.05



0.05



0.05



0.0506/30/2009


0.16



0.13



0.16



0.1303/31/2009


10.00



10.00



10.00



10.00





(b)        As of December 31, 2009, there were 517 shareholders of record of the Registrant’s common stock.





(c)        The Registrant has neither declared nor paid any cash dividends on its common stock, and it is not anticipated that any such dividend will be declared or paid in the foreseeable future.





Effective August 11, 1993, the Securities and Exchange Commission (the “Commission”) adopted Rule 15g-9, which established the definition of a “penny stock,” for purposes relevant to the Company, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require: (i) that a broker or dealer approve a person’s account for transactions in penny stocks; and (ii) that the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. In order to approve a person’s account for transactions in penny stocks, the broker or dealer must (i) obtain financial information and investment experience and objectives of the person; and (ii) make a reasonable determination that the transactions in penny stocks are suitable for that person and that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the Commission relating to the penny stock market, which, in highlight form,(i)sets forth the basis on which the broker or dealer made the suitability determination; and (ii) states that the broker or dealer received a signed, written agreement from the investor prior to the transaction. Disclosure also has to be made about the risks of investing in penny stock in both public offerings and in secondary trading, and about commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.





Equity Compensation Plan Information





The Company does not currently have any Equity Compensation Plans in effect.




Dividends





The Company has not paid any dividends to date, and has no plans to do so in the immediate future.




ITEM6 — SELECTED FINANCIAL DATA





As a smaller reporting Company, the Company is not required to include this Item.




12
 Table of Contents




ITEM7 — 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 December 31, 2009 we had negative working capital of $5,077,197 and incurred net losses of $3,622,446 during the twelve month period ended December 31, 2009. Our operations do not currently provide sufficient cash flow to meet our obligations. We do believe that we will become cash flow positive in 2010.  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. However, effective December 31, 2009, we entered into an agreement with Professional Business Bank which refinanced outstanding debt that was in default. This agreement transferred $3,733,223 from current liabilities to long term liabilities and also resulted in a gain on the settlement of $465,062.




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 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. The stock price is already hovering around $0.01 per share and if it drops much lower, the above financing arrangements would be difficult to maintain. This financing caused a derivative liability expense of $2,616,867 on the statement of operations in 2009. These agreements have generated a significant current derivative liability in the amount of $4,206,376 which is approximately 83% of the working capital deficiency that exists as of 12/31/2009.




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.




13
 Table of Contents




RESULTS OF OPERATIONS




Comparison of Year Ended December 31, 2009 to the year ended December 31, 2008




Revenues




Our revenue during the twelve month period in 2009 totaled $2,211,949 compared to $1,600,895 during the same period in the prior year. Our 2009 revenue included management fees of $90,000 from a title company with whom we severed relations in 2009. The balance of our management fee revenue was generated through a contract with a title company owned by our officers and directors. A small amount of joint marketing revenue was generated in the 4th quarter of 2009 as the company’s plans for this revenue stream just began to take effect in the 4th quarter of 2009.




$191,279 in previously uncollected 2008 invoices from First Southwestern Title Company that were paid in July 2009 was classified as collection of reserved accounts receivable in other income. These invoices that were paid were fully reserved in the Allowance for Doubtful Accounts in 2008. These invoices were paid by a three party agreement whereby First Southwestern Title Company forgave money due to First Southwestern by TEAM affiliate CalCounties Title Nation (CCTN) and then CCTN in turn agreed to reduce the working capital due to CCTN from TEAM for the same amount of $261,392. $60,909 of unreimbursed expenses from First Southwestern Title Company is included in operating expenses.




Costs and expenses




General and administrative expense amounted to $1,296,388 in 2009 as compared to $1,491,991 in the prior period.  The decrease is primarily from contract costs in 2008 that were eliminated in 2009 in favor of adding personnel costs as noted by higher employee costs for the same period in 2009.




Title plant and customer service expenses were $1,680,625 in 2009 as compared to $94,050 in 2008. This expense increased due to a contract that was signed effective January 1, 2009 between Team Nation and affiliate title company CalCounties Title Nation whereby Team Nation will provide all title production, customer service and data services to CalCounties. The increase in expense for 2009 is due to increasing staffing levels and Title Plant access levels sufficient to meet this contract with CalCounties.




Related party management fee expense decreased from 2008 to 2009 when four separate management agreements were terminated with management companies owned by controlling shareholders as of 12/31/2008. These agreements were at a cost of $15,000 per month for JDO Management, KE Enterprises, Inc., One Track Management, and Vision Management Solutions, LLC and were in effect for all twelve months in 2008. In July 2009, new management agreements with KE Enterprises and JDO Management were executed at a cost of $25,200 per month per Management Company.




Relations were severed with First Southwestern Title Company in 2009 because of capital deficiency problems that caused the CA Department of Insurance to cancel their license to sell Title Insurance. All 2008 bad debt expense amounting to $400,800 and unreimbursed expenses for $187,500 on the Statement of Operations related to this relationship. $60,909 of unreimbursed expenses in 2009 was related to the relationship with First Southwestern Title Company as well.  Accounts receivable of $209,408 from First Southwestern and other receivables of $248,409 were written off.




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.




OFF-BALANCE SHEET ARRANGEMENTS




We had no off balance sheet arrangements.




ITEM8 — FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA





The response to this item is submitted as a separate section of this report beginning on page F-1.




14
 Table of Contents




Team Nation Holdings Corporation
 Index to the Financial Statements
 As of December 31, 2009 and 2008 and
 For the Years Ended December 31, 2009 and 2008
 Report of the Registered Independent Public Accounting Firm
F-2Financial Statements of Team Nation Holdings Corp:Balance Sheets as of December 31, 2009 and 2008
F-3Statements of Operations for the Years Ended December 31, 2009 and 2008
F-4Statements of Shareholder's for the Years Ended December 31, 2009 and 2008
F-5Statements of Cash Flows for the Years Ended December 31, 2009 and 2008
F-6Notes to Financial Statements
F-8
  
 F-1
 
 
 REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
 
 
 Board of Directors and Stockholders
 Team Nation Holdings Corporation
 
 We have audited the accompanying balance sheets of Team Nation Holdings Corporation as of December 31, 2009 and 2008, and the related statements of operations, stockholders’ deficit and cash flows for each of the years in the two year period ended December 31, 2009. Team Nation Holdings Corporation management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.
 
 We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
 In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Team Nation Holdings Corporation as of December 31, 2009 and 2008, and the results of its operations and its cash flows for each of the years in the two year period ended December 31, 2009 in conformity with accounting principles generally accepted in the United States of America.
 
 The accompanying financial statements have been prepared assuming that Team Nation Holdings Corporation will continue as a going concern. As discussed in Note 12 to the financial statements; Team Nation Holdings Corporation, since beginning operations through a recapitalization (commonly referred to as a reverse merger) in June 2007, has suffered losses from operations and a working capital deficiency.  Team Nation Holdings Corporation incurred a loss from continuing operations for the year ended December 31, 2009 of $3,617,233 and has current liabilities that exceeded current assets by $5,077,197 and total liabilities that exceeded total assets by $4,771,129.  Its major source of revenue is a related party (see 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 $2,261,350, which had the payment terms rewritten on extended terms in 2008.  These factors, as discussed in Note 12, raise substantial doubt as to Team Nation Holdings Corporation's ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 12. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might result from the outcome of these uncertainties.
 
 
 
 
 Kelly & Company
 Certified Public Accountants
 April 15, 2010
  F-2
 TeamNation Holdings Corporation
 Balance Sheets
 As of December 31, 2009 and 2008
 ASSETS2009


2008Current assets:Cash and cash equivalents

$
19,029


$
4,296Restricted cash


-



104,072Accounts receivable trade, net of allowance for doubtful accounts of $0 and $400,800


-



11,040Other receivables, net of uncollectible accounts of $0 and $187,500


-



-Due from affiliates


313,321



-Current assets of discontinued operations


-



87,000Total current assets


332,350



206,408Notes receivable related party


2,261,350



2,215,467Accrued interest on JMJ note receivable


2,804



-Title plant


710,000



710,000Software and leasehold improvements, net of accumulated depreciation of $8,500 and $0


52,515



-Deposits


27,030



500Long term assets of discontinued operations


-



14,596Total assets

$
3,386,049


$
3,146,971LIABILITIES AND SHAREHOLDER'S DEFICITCurrent liabilities:Notes payable in default

$
-


$
3,381,292Accounts payable trade


693,275



217,251Accounts payable of abandoned discontinued operations


5,569



-Affiliate payable


-



332,177Related party convertible payable obligations


182,673



179,157Accrued liabilities


119,314



126,580Current portion of financing agreement


104,882



-Convertible debt obligation, net of discount of $982,051 and $0


97,458



-Notes payable related party


-



13,958Derivative liability


4,206,376



-Current liabilities of discontinued operations


-



188,825Total current liabilities


5,409,547



4,439,240Financing agreement


2,645,118



-Convertible note payable, net of discount of $576,460 and $0


23,540



-Account payable due in more than one year


76,134



-Accrued interest


2,839



-Long term liabilities of discontinued operations


-



17,300Total liabilities


8,157,178



4,456,540Commitments and contingencies (note 12)Shareholder's deficit:Preferred stock ($0.001 stated value, 60 shares authorized, 60 and 0 shares issued and outstanding)


-



-Common stock ($0.001 stated value, 1,000,000,000 shares authorized, 67,901,401 and 47,191,894 shares issued and outstanding)


67,901



47,192Additional paid in capital


1,566,039



1,138,946Stock subscription receivable


(450,000
)


(163,084
)Accumulated deficit


(5,955,069
)


(2,332,623
)Total shareholder's deficit


(4,771,129
)


(1,309,569
)Total liabilities and shareholder's deficit

$
3,386,049


$
3,146,971
   The accompanying notes are an integral part of the financial statements.
  F-3
  TeamNation Holdings Corporation
 Statements of Operations
 For the Years Ended December 31, 2009 and 2008
 2009


2008Management fees

$
70,000


$
400,895Management fees related party


1,949,940



1,200,000Joint marketing


730



-Total revenue


2,020,670



1,600,895Operating expenses:Title plant feesSearch fees


994,595



94,050Processing and general


445,332



-Customer service expenses


240,698



-General & administrative expenses


1,296,388



1,491,991Related party management fees


302,400



720,000Bad debt expense


-



400,800Unreimbursed expenses


60,909



187,500Selling expenses


3,282



-Total operating expenses


3,343,604



2,894,341Loss from continuing operations


(1,322,934
)


(1,293,446
)Other expense (income):Interest income


(5,325
)


(51,777
)Interest income related party


(63,184
)


-Interest expense


268,084



255,877Collection of reserved accounts receivable


(191,279
)


-Accretion of debt discount


130,999



-Derivative liability expense


2,616,867



-Loss from continuing operations before provision for income taxes


(4,079,096
)


(1,497,546
)Provision for income taxes


3,200



2,400Loss from continuing operations before extraordinary item


(4,082,296
)


(1,499,946
)Gain on settlement of lawsuit


465,063



-Loss from continuing operations


(3,617,233
)


(1,499,946
)Loss from discontinued operations


(5,213
)


(69,624
)Net loss

$
(3,622,446
)

$
(1,569,570
)Loss per share from continuing operations basic and diluted

$
(0.08
)

$
(0.04
)Loss per share from discontinued operations basic and diluted

$
0.00


$
0.00Net loss per share basic and diluted

$
(0.07
)

$
(0.04
)Weighted average shares outstanding basic and diluted


54,304,646



38,436,064
 The accompanying notes are an integral part of the financial statements.
  F-4
  TeamNation Holdings Corporation
 Statements of Shareholder's Deficit
 For the Years Ended December 31, 2009 and 2008
 Additional


StockPreferred


Preferred


Common


Common


Paid in


Subscriptions


AccumulatedShares


Stock


Shares


Stock


Capital


Receivable


Deficit


TotalBalance December 31, 2007


-



-



25,000,000


$
25,000


$
88,212



-


$
(763,053
)

$
(649,841
)Shares issued in reverse merger


-



-



20,906,633



20,907



(20,907
)


-



-



-Expenses paid by shareholders


-



-



-



-



2,000



-



-



2,000Shares issued for services


-



-



215,482



215



165,267



-



-



165,482Sale of stock subscriptions


-



-



1,434,327



1,434



1,268,557



(163,084
)


-



1,106,907Shares cancelled to partially satisfy notes receivable


-



-



(364,548
)


(365
)


(364,183
)


-



-



(364,548
)Net loss


-



-



-



-



-



-



(1,569,570
)


(1,569,570
)Balance December 31, 2008


-



-



47,191,894


$
47,191


$
1,138,946


$
(163,084
)

$
(2,332,623
)

$
(1,309,570
)Stock subscriptions collected


-



-



-



-



-



13,430



-



13,430Stock subscriptions cancelled


-



-



(166,205
)


(166
)


(149,488
)


149,654



-



-Convertible preferred stock sold to directors


60



-



-



-



60,000



-



-



60,000Free up shares issued


-



-



1,694,130



1,694



(1,694
)


-



-



-Shares sold for cash


-



-



200



-



200



-



-



200JMJ note receivable in substance stock subscription


-



-



-



-



-



(500,000
)


-



(500,000
)Funds received on JMJ note receivable


-



-



-



-



-



50,000



-



50,000Shares issued to directors for personally paying down debt


-



-



14,109,338



14,109



409,171



-



-



423,280Officer payment of legal expenses


-



-



-



-



10,000



-



-



10,000Shares issued to satisfy debt


-



-



3,275,540



3,276



46,724



-



-



50,000Shares issued to satisfy lease liability


-



-



1,796,504



1,797



52,180



-



-



53,977Net loss


-



-



-



-



-



-



(3,622,446
)


(3,622,446
)Balance December 31, 2009


60


$
-



67,901,401


$
67,901


$
1,566,039


$
(450,000
)

$
(5,955,069
)

$
(4,771,129
)
   The accompanying notes are an integral part of the financial statements.
  F-5
  TeamNation Holdings Corporation
 Statements of Cash Flows
 For the Years Ended December 31, 2009 and 2008
 2009


2008Cash flows from operating activities:Net loss

$
(3,622,446
)

$
(1,569,570
)Loss from discontinued operations


(5,213
)


(69,624
)Loss from continuing operations


(3,617,233
)


(1,499,946
)Adjustments to reconcile net income to cash provided by (used in) operating activities:Expenses paid by and officer and director


10,000



2,000Shares issued for services


-



165,482Bad debt expense


-



588,300Unreimbursed expenses


60,909



-Depreciation expense


8,500



-Gain on debt settlement


(465,063
)


-Accretion of debt discount


130,999



-Derivative liability expense


2,616,866



-Decrease (increase) in assets:Accounts receivable


11,040



(356,330
)Other receivables


(60,909
)


(187,500
)Due from affiliate


(313,321
)


104,060Related party notes receivable


(45,883
)


(215,037
)Accrued interest


(2,804
)


-Deposit


(26,530
)


(500
)Increase (decrease) in liabilities:Accounts payable


557,727



364,198Accrued liabilities


457,796



126,580Accrued interest


2,839



-Related party payable


757,332



608,927Related party convertible payable obligations


43,516



-Cash used in operating activities continuing operations


120,568



(369,390
)Cash used in operating activities discontinued operations


(47,848
)


57,022Cash used in operating activities


72,720



(312,368
)Cash flows used in investing activities:Purchase of software and improvements


(61,015
)


-Cash used in investing activities continuing operations


(61,015
)


-Cash used in investing activities discontinued operations


14,596



96,717Cash used in investing activities


(46,419
)


96,717Cash flows used in financing activities:JMJ financing agreement proceeds


50,000



-Related party loan


(13,958
)


13,958Repayment of notes payable


(529,872
)


(265,858
)Restricted cash


2,653



(4,072
)Repayment of related party note payable title plant


-



(510,000
)Sale of convertible preferred stock


60,000



-Sale of common stock


436,909



1,106,907Cash used in financing activities continuing operations


5,732



340,935Cash used in financing activities discontinued operations


(17,300
)


(125,572
)Cash used in financing activities


(11,568
)


215,363Net increase (decrease) in cash


14,733



(288
)Cash and cash equivalents at beginning of period


4,296



4,584Cash and cash equivalents at end of period

$
19,029


$
4,296
  The accompanying notes are an integral part of the financial statements.
  F-6
  Team Nation Holdings Corporation
 Statements of Cash Flows
 For the Years Ended December 31, 2009 and 2008
 Supplemental Disclosure of Cash Flow InformationFor the Year Ended December 31,2009


2008Cash paid during the fiscal years for:Interest

$
1,438


$
145,697Income taxes

$
3,200


$
2,400Schedule of Non cash Financing ActivitiesCommon stock used to partially satisfy notes receivable

$
-


$
364,548Related party notes receivable partially satisfied with accrued related party management fee payable

$
-


$
276,750Common stock used to satisfy related party convertible payable obligations

$
50,000


$
-Common stock used to satisfy discontinued operation's lease liability

$
53,977


$
-Note receivable issued as consideration for convertible note payable, recorded as stock subscription

$
500,000


$
-Write off of uncollectible trade and other receivables

$
457,817


$
-
       The accompanying notes are an integral part of the financial statements.
 
 F-7
  TeamNation Holdings Corporation
 Notes to the Financial Statements
 As of December 31, 2009 and 2008 and
 For the Years Ended December 31, 2009 and 2008
  1.       Description of Business
  TEAM Nation Holding Corporation (the "Company") ("TEAM"), a Nevada corporation, was originally incorporated in California on November 22, 2006 as Real Estate Services Holding, Inc. and changed its name to TEAM on June 21, 2007.  Until December 2009, the financial statements included the accounts of TEAM Nation Holding Corporation (“TEAM”) and its two wholly owned subsidiaries, Escrow Nation, Inc. (“ESCROW”) and Mortgage Nation, Inc. (“MORTGAGE”). The operations of both subsidiaries have been discontinued. All significant intercompany balances and transactions have been eliminated.  TEAM, ESCROW and MORTGAGE commenced operations on February 1, 2007. TEAM is a management and services company specializing in management solutions for title companies and title production services.  The Company focuses on counter-cyclical growth to acquire, manage and consult for title, escrow, mortgage, real estate and REO companies.
  Effective June 17, 2008, the shareholders of TEAM exchanged all of their outstanding common shares for 25,000,000 shares of Suncross Exploration Corporation (“SUNCROSS”).  Completion of the exchange agreement resulted in the TEAM shareholders having control of SUNCROSS.  Accordingly, the transaction has been recorded for accounting purposes as the acquisition of TEAM by SUNCROSS with TEAM as the acquirer (reverse acquisition).
  In December 2007, TEAM entered into contracts to manage all operations of two title companies operating in Southern California.  TEAM provides management, title plant and production services, customer service, sales and marketing support, HR administration, IT administration and accounting services to both companies in exchange for fees and a percentage of net profits from the operations.  In January 2009, TEAM cancelled its management agreement with one of the title companies.
  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 times cash and cash equivalent balances at a limited number of banks and financial institutions may exceed insurable amounts.  The Company believes it mitigates its risks by depositing cash or investing in cash equivalents in major financial institutions.
  Restricted cash
  Team maintained a certificate of deposit with a bank in the amount of $104,072 at December 31, 2008, which served as collateral on a line-of-credit note with the bank.  In December 2009, the bank exercised its right to take the certificate of deposit and apply it to the debt, which was in default.  The certificate of deposit had a value of $106,593 when the bank captured it.
  F-8
  Team Nation Holdings Corporation
 Notes to the Financial Statements
 As of December 31, 2009 and 2008 and
 For the Years Ended December 31, 2009 and 2008
  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 December 31, 2009, and December 31, 2008, the Company did not have any funds on deposit in excess of FDIC insured limits, respectively.
  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 5). Management considers the following factors when determining the collectibility 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.
  Changes in the trade receivable allowance for doubtful accounts are as follows:
  2009


2008Trade receivables allowanceBeginning balance

$
400,800


$
-Provision for doubtful accounts


70,000



400,800Collections of previously reserved amounts


(261,392
)


-Ending balance

$
209,408


$
400,800
 Income taxes
  The Company prepared its income tax returns in 2007 utilizing a Subchapter S election.  Accordingly, the loss was allocated to the shareholders of the Company and the Company did not provide for income taxes.  The Subchapter S election terminated upon the acquisition of TEAM by SUNCROSS on June 17, 2008.
  F-9
  Team Nation Holdings Corporation
 Notes to the Financial Statements
 As of December 31, 2009 and 2008 and
 For the Years Ended December 31, 2009 and 2008
  Subsequent to June 17, 2008, income taxes are accounted for using an asset and liability approach for financial reporting. The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the financial statement carrying amount and the tax basis of assets and liabilities and net operating loss and tax credit carry forwards.
  Estimates
  The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
  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.
  The carrying values of our cash and beneficial conversion feature derivative liability carried at fair value as of December 31, 2009 and 2008, are classified in the table below in one of the three categories described above:
  Fair Value at December 31, 2009 and 2008Level 1


Level 2


Level 3


Total2009:Cash and cash equivalents

$
19,029



-



-


$
19,029Derivative liability


-



-


$
4,206,376


$
4,206,3762008:Cash and cash equivalents

$
4,296



-



-


$
4,296Restricted cash

$
104,072



-



-


$
104,072
 F-10
  Team Nation Holdings Corporation
 Notes to the Financial Statements
 As of December 31, 2009 and 2008 and
 For the Years Ended December 31, 2009 and 2008
 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.
  Advertising
  Advertising expense was $1,630 and $1,580 for the years ended December 31, 2009 and 2008, respectively.
  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.
  F-11
 Team Nation Holdings Corporation
 Notes to the Financial Statements
 As of December 31, 2009 and 2008 and
 For the Years Ended December 31, 2009 and 2008
  Reclassification
  Certain reclassifications have been made to the December 31, 2008 financial statements to conform to the December 31, 2009 presentation. These reclassifications had no effect on previously reported results of operations or retained earnings.
  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 issued Statement of Financial Accounting Standards No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles – a replacement of FASB Statement No. 162” and also issued as Accounting Standards Update No. 2009-01, “Generally Accepted Accounting Principles”  which establishes 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.
  F-12
 Team Nation Holdings Corporation
 Notes to the Financial Statements
 As of December 31, 2009 and 2008 and
 For the Years Ended December 31, 2009 and 2008
  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.
  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.
  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 $5,213 and $69,624 from the discontinued operations for the years ended December 31, 2009 and 2008, respectively.
  As of December 31, 2008, the assets and liabilities of the discontinued operations are presented separately under the captions "Assets of discontinued operations" and "Liabilities of discontinued operations."
  F-13
  Team Nation Holdings Corporation
 Notes to the Financial Statements
 As of December 31, 2009 and 2008 and
 For the Years Ended December 31, 2009 and 2008
  As of December 31, 2008ESCROW


MORTGAGE


TotalCurrent assets:Sublease receivable

$
87,000


$
-


$
87,000Total current assets


87,000



-



87,000Long term assetsFurniture


-



1,596



1,596Deposits


13,000



-



13,000Total long term assets


13,000



1,596



14,596Total assets of discontinued operations

$
100,000


$
1,596


$
101,596Current liabilitiesAccounts payable

$
59,071


$
-


$
59,071Shutdown expenses


129,754



-



129,754Sublease receivable


-



-



-Total current liabilities


188,825



-



188,825Long term liabilitiesRelated party notes payable


-



17,300



17,300Note payable


-



-



-Shutdown expenses


-



-



-Total long term liabilities


-



17,300



17,300Total liabilities of discontinued operations

$
188,825


$
17,300


$
206,125
  The accompanying tables illustrate the reporting of the discontinued operations on the face of the Statements of Operations for the years ended December 31, 2009 and 2008:
  For the Year Ended December 31, 2009ESCROW


MORTGAGE


TotalRevenues

$
-


$
-


$
-Costs and expenses:Selling, general and administrative


-



1,596



1,596Shutdown expense


3,274



-



3,274Interest expense


343



-



343Loss from discontinued operations

$
(3,617
)

$
(1,596
)

$
(5,213
)
  For the Year Ended December 31, 2008ESCROW


MORTGAGE



TotalRevenues

$
37,728


$
-


$
37,728Costs and expenses:Selling, general and administrative


73,002



1,473



74,475Shutdown expense


31,743



-



31,743Interest expense


1,134



-



1,134Loss from discontinued operations

$
(68,151
)

$
(1,473
)

$
(69,624
)
 F-14
 Team Nation Holdings Corporation
 Notes to the Financial Statements
 As of December 31, 2009 and 2008 and
 For the Years Ended December 31, 2009 and 2008
 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 December 31, 2009 and for the year then ended have been audited by another firm for the purpose of filing them with the California Department of Insurance and are summarized as follows:
  As ofDecember 31,2009Current assets

$
3,938,971Total assets

$
5,153,659Current liabilities

$
2,548,060Total liabilities

$
2,934,295Stockholders' equity

$
2,219,364
 For TheYear EndedDecember 31,2009Total operating revenues

$
13,172,745Total operating expenses

$
12,156,231Net income

$
1,106,609
 
 F-15
 Team Nation Holdings Corporation
 Notes to the Financial Statements
 As of December 31, 2009 and 2008 and
 For the Years Ended December 31, 2009 and 2008
  Due To/From Affiliate
  The components of the amounts due to/from CCTN for the years ended December 31, 2009 and 2008 are as follows:
  2009


2008Due to CCTN, beginning of period

$
332,177


$
426,133Satisfaction of amounts owed by CCTN for the vendor services agreement


(1,941,141
)


(763,769
)Operating capital advances from CCTN to TEAM


3,179,725



1,829,080Operating capital advances from TEAM to CCTN


(419,374
)


(830,133
)Sublease payments from CCTN to TEAM


(82,209
)


-Sublease payments from TEAM to CCTN


112,478



164,000Transfer of liability owed CCTN to Eventus Capital (Note 9)


(1,089,510
)


-TEAM assumption of CCTN invoices


(405,467
)


-Payments owed for Title Plant (Note 8)


-



(412,530
)Stock subscriptions bought by CCTN employees (Note 11)


-



(80,604
)Due to (from) CCTN, end of period

$
(313,321
)

$
332,177
 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 December 31, 2009, from its four officers and directors was $2,261,350.  The funds were used by the officers and directors to purchase and fund CCTN.
  F-16
  Team Nation Holdings Corporation
 Notes to the Financial Statements
 As of December 31, 2009 and 2008 and
 For the Years Ended December 31, 2009 and 2008
  A portion of the balance of the notes receivable was relieved during the year ended December 31, 2008 with shares of TEAM common stock. 364,548 common shares, valued at $1.00 per share for a total of $364,548 were returned to the company and retired to satisfy a portion of the outstanding notes receivable. The notes receivable balance increased during 2008 when TEAM made payments on a note payable on behalf of the four stockholders and directors to the former owner of CCTC.  The total of the payments was $167,494.  Also in 2008, the notes receivable balance was reduced with the satisfaction of accrued management fees of the four officers and directors in the amount of $276,750.   In 2009, the notes receivable balance increased by $45,884.  The net increase was a result of the accrual of interest of $63,184 and a reduction of $17,300 upon satisfaction of liabilities of the abandoned MORTGAGE subsidiary.
  Notes Payable
  At December 31, 2008, the Company had a demand note payable to an affiliate of a director in the amount of $13,958. The note was due on demand and did not bear interest.  It was satisfied in April 2009.
  Purchase of Orange County, California title plant
  As discussed in Note 8, the Company's acquisition of the title plant for Orange County from CCTC included a note payable in the amount of $510,000.  This amount was fully satisfied in 2008.
  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 $1,949,940 and $1,200,000 for the years ended December 31, 2009 and 2008, respectively, and is reported as related party management fees in the statement of operations.  Title plant fees were $994,595 and $94,050 for the years ended December 31, 2009 and 2008, respectively.
  F-17
 
 Team Nation Holdings Corporation
 Notes to the Financial Statements
 As of December 31, 2009 and 2008 and
 For the Years Ended December 31, 2009 and 2008
   Management fee expenses
  TEAM entered into management agreements in 2007 with affiliates of the four officers and directors by which they would actively manage operations, human resources, accounting services, sales, and marketing efforts for the TEAM. Each of the four agreements called for a $15,000 monthly fee.  These agreements were cancelled on January 1, 2009.  The Company entered into new management agreements with two of the officers and directors as of July 1, 2009, each at a cost of $25,200 per month per agreement.  Total management fee expenses were $302,400 and $720,000 for the years ended December 31, 2009 and 2008, respectively.  TEAM paid for the services partially in cash and partially as a reduction in shareholder receivables.  Related party management fee expenses payable were $182,673 and $179,157 at December 31, 2009 and 2008.
  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.
  Shares Issued
  In June 2008, 364,548 shares were returned to the company to partially satisfy outstanding notes receivable. The shares were valued at $1.00 per share and have been retired.
  As discussed in note 11, 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.
  On November 3, 2009, Sunderland Capital, LLC (Sunderland) bought $10,000 of the Company's convertible payable to an entity owned by an officer and director.  On that same date, Sunderland converted the $10,000 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.
  On November 13, 2009, Sunderland bought $10,000 of the Company's convertible payable to an entity owned by an officer and director.  On that same date, Sunderland converted the $10,000 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.
  F-18
 Team Nation Holdings Corporation
 Notes to the Financial Statements
 As of December 31, 2009 and 2008 and
 For the Years Ended December 31, 2009 and 2008
  On December 11, 2009, Eventus bought $10,000 of the Company's convertible payable to an entity owned by an officer and director.  On that same date, Eventus converted the $10,000 payable 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.
  On December 16, 2009, Eventus bought $10,000 of the Company's convertible payable to an entity owned by an officer and director.  On that same date, Eventus converted the $10,000 payable into 665,070 shares of the Company's common stock at $0.015036 per share, a 40% discount to the prior 5 days closing average.
  On December 22, 2009, Eventus bought $10,000 of the Company's convertible payable to an entity owned by an officer and director.  On that same date, Eventus converted the $10,000 payable 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.
  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.
  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 12 for the Company's minimum lease obligations.
  TEAM's sublease expense to CCTN
  2010

$
107,9702011


-2012


-2013


-2014 and thereafter


-Total minimum lease payments

$
107,970
 
 F-19
 Team Nation Holdings Corporation
 Notes to the Financial Statements
 As of December 31, 2009 and 2008 and
 For the Years Ended December 31, 2009 and 2008
  TEAM's sublease revenue from CCTN
  2010

$
84,8952011


84,8952012


17,6872013


-2014 and thereafter


-Total minimum sublease revenue

$
187,477
  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.
  F-20
 Team Nation Holdings Corporation
 Notes to the Financial Statements
 As of December 31, 2009 and 2008 and
 For the Years Ended December 31, 2009 and 2008
  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 $2,804 at December 31, 2009, respectively.
  7.       Software and Leasehold Improvements
  Software and leasehold improvements consist of the following:
  2009Software

$
59,649Leasehold improvements


1,36761,016Less: accumulated depreciation


(8,500
)Software and Leasehold Improvements, net

$
52,516
  For the years ended December 31, 2009 and 2008, depreciation expense related to software and leasehold improvements was $8,500 and $0, respectively.
  8.       Title Plant
  The Company acquired the Orange County title plant from California Counties Title Nation (“CCTN”) in December 2007.  CCTN is wholly owned by four affiliates of the four officers and directors of the Company.  The amount paid for the title plant was based on an appraisal and the consideration for the $710,000 purchase price included $200,000 in cash and a note payable by the Company in the amount of $510,000.  The note was non-interest bearing and was paid in full in December 2008.
  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 and 2008.
  F-21
  Team Nation Holdings Corporation
 Notes to the Financial Statements
 As of December 31, 2009 and 2008 and
 For the Years Ended December 31, 2009 and 2008
  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 oblication at their election, but may not hold more than 4.99% of the Company’s outstanding shares at any time.
  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 laibility 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 11).  At December 31, 2009, the debt obligation balance to Eventus was $1,079,510.  The value of the embedded conversion feature had increased to $1,957,126 resulting in an increase to the derivative liability and increase in the Company's loss of $373,933.  Accretion of the debt obligation's debt discount for the year ended December 31, 2009 was $107,458.
  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.
  F-22
  Team Nation Holdings Corporation
 Notes to the Financial Statements
 As of December 31, 2009 and 2008 and
 For the Years Ended December 31, 2009 and 2008
  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. At December 31, 2009, the value of embedded conversion feature had decreased to $2,249,250, resulting in a decrease to the derivative liability and a decrease in the Company's loss of $743,250.  Accretion of the JMJ Note Payable debt discount for the year ended December 31, 2009 was $23,540.
  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 at their issuance and at the end of the reporting period are as follows:
  Risk free interest rate
0.34% to 1.57%Expected volatility of common stock
350% to 387%Dividend yield
0.00%Expected life of conversion features
0.9- 3 years
 10.       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 12) and satisfied promissory notes that were in default with 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 4).  The settlement agreement has resulted in a gain on settlement of $465,063.
  F-23
 Team Nation Holdings Corporation
 Notes to the Financial Statements
 As of December 31, 2009 and 2008 and
 For the Years Ended December 31, 2009 and 2008
  Debt owed to PBB at December 31, 2009 and 2008 consist of the following:
  2009


2008Financing 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

$
2,750,000



-Notes Payable in DefaultNote payable in default to PBB; unsecured; interest at bank prime (7.25% at December 31, 2008); personally guaranteed by the shareholders; put into default in 2008 by the bank; formerly in litigation, settled November 2009 (Note 12)


-


$
2,381,494Note payable in default to PBB; collateralized by the Company's certificate of deposit in the amount of $100,000 and four certificates of deposit in the total amount of $400,000 owned by the Company's 4 officers and directors; interest at prime plus 2% (9.25% at December 31, 2008); formerly in litigation, settled November 2009 (Note 12)


-



999,798Debt to PBB


2,750,000



3,381,292Amount in default


-



(3,381,292
)Less current portion


(104,882
)


-Long term debt to PBB

$
2,645,118


$
-
 For the years ended December 31, 2009 and 2008, interest expense on the PBB debt was $268,084 and $255,877, respectively.
  F-24
  Team Nation Holdings Corporation
 Notes to the Financial Statements
 As of December 31, 2009 and 2008 and
 For the Years Ended December 31, 2009 and 2008
  Maturity of all TEAM debt, including long-term payables, is as follows:
   Year ended December 31,2010

$
146,9712011


229,6532012


259,9402013


315,5842014 and beyond


1,916,074$
2,868,222
  11.       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 certificiate 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 December 31, 2009, there were 60 shares issued and outstanding.  There were no preferred shares issued and outstanding at December 31, 2008.
  Common stock
  On May 14, 2008, the number of authorized common shares was increased from 100,000,000 to 300,000,000.  On November 21, 2008, the number of authorized common shares was increased from 300,000,000 to 1,000,000,000.
  In June 2008, TEAM issued 20,906,633 shares of its common stock in the reverse merger.
  During the year ended December 31, 2008, the Company sold 1,434,327 shares of its common stock for $1,106,907 in cash. Subscriptions receivable were $163,084 at December 31, 2008.  $13,430 of subscriptions receivable were collected and 166,205 share subscriptions, totaling $149,654, were cancelled during the year ended December 31, 2009.
  In 2008, TEAM issued 215,482 shares of its common stock for services valued at $165,482.
  An officer and director paid Company expenses in the amount of $10,000 and $2,000 during the years ended December 31, 2009 and 2008, respectively.  The amounts were recorded as contributed capital.
  F-25
 Team Nation Holdings Corporation
 Notes to the Financial Statements
 As of December 31, 2009 and 2008 and
 For the Years Ended December 31, 2009 and 2008
  In September 2008, the Company issued 1,000,000 shares of its common stock into escrow in anticipation of a private placement during the fourth quarter of 2008.  This private placement has been cancelled and the shares returned for cancellation.  The shares are not treated as issued or outstanding at December 31, 2009 and 2008.
  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 taken by PBB to partially satisfy a line of credit.  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 defaulted.  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 10).
  In August 2009, the Company sold 200 shares of its common stock for cash of $200.
  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.
  On November 3, 2009, Sunderland bought $10,000 of the Company's convertible payable to an entity owned by an officer and director.  On that same date, Sunderland converted the $10,000 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.
  On November 13, 2009, Sunderland bought $10,000 of the Company's convertible payable to an entity owned by an officer and director.  On that same date, Sunderland converted the $10,000 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.
  On December 11, 2009, Eventus bought $10,000 of the Company's convertible payable to an entity owned by an officer and director.  On that same date, Eventus converted the $10,000 payable 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.
  On December 11, 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.
  F-26
  Team Nation Holdings Corporation
 Notes to the Financial Statements
 As of December 31, 2009 and 2008 and
 For the Years Ended December 31, 2009 and 2008
  On December 16, 2009, Eventus bought $10,000 of the Company's convertible payable to an entity owned by an officer and director.  On that same date, Eventus converted the $10,000 payable into 665,070 shares of the Company's common stock at $0.015036 per share, a 40% discount to the prior 5 days closing average.
  On December 22, 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.
  12.       Commitments and Contingencies
  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

$
238,5612011


145,4582012


30,4932013


-2014 and thereafter


-Total minimum lease payments

$
414,512
  Rental expense was $115,512 and $155,602 for the years ended December 31, 2009 and 2008, respectively.  Rental expense is net of sublease income of $67,209 and $0 for the years ended December 31, 2009 and 2008.  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.
  On September 8, 2008 we filed suit in the Superior Court of California, Orange County, against Professional Business Bank ("PBB"), for, among other things, interference with business prospects and violation of our rights of privacy relative to a line of credit and loan made by PBB to our subsidiary holding company.  PBB responded by calling both loans due.  Effective December 31, 2009, we reached a settlement (Note 10) with PBB to resolve this matter.
  F-27
  Team Nation Holdings Corporation
 Notes to the Financial Statements
 As of December 31, 2009 and 2008 and
 For the Years Ended December 31, 2009 and 2008
  Going Concern
  The accompanying financial statements have been prepared assuming the Company will continue as a going concern.  As of the end of December 2007, it was determined that ESCROW and MORTGAGE would be unable to continue in the current housing market and the operations of both companies were discontinued.  At December 31, 2009, the Company had negative working capital of $5,077,197, total liabilities of $8,157,178, and a stockholders’ deficit of $4,771,129.  Currently scheduled debt payment requirements for 2009 exceed the amount that can be expected to be generated from operations.   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 $2,261,350, which had the payment terms rewritten on extended terms in 2008.  These conditions raise substantial doubt about the Company’s ability to continue as a going concern.  The financial statements do not include any adjustments that may result from the outcome of these uncertainties.
  The Company hopes to meet its working capital requirements through debt and private placements of equity.  In addition, the Company has entered into management contracts with a title company owned by four affiliates of the Company’s officers and directors, from which the Company expects to have positive cash flow.
  Concentrations
  In the years ended December 31, 2009 and 2008, the Company had only two customers.  One customer, FIRST, went out of business on July 1, 2009.  All revenue from FIRST has been fully reserved. Our second customer, CCTN, is a related party.  If CCTN was unable to pay for our services, we would have no customers and be unable to collect revenue.
  We have a contract with one vendor that provides all of our title searching that can't be done using our title plant.  If that vendor were unable to provide future services, we would experience an interruption of service.  We are confident that the vendor could be readily replace.
  13.       Deferred Income Taxes
  As a result of its losses, the Company has not recorded any current or deferred income tax provisions for the years ended December 31, 2009 and 2008.  Significant components of the Company's deferred income tax assets at December 31, 2009 and 2008 are as follows:
  2009


2008Deferred tax assets:Net operating loss carryforward

$
1,788,565


$
979,821Valuation allowance


(1,788,565
)


(979,821
)Net deferred tax assets

$
-


$
-
   F-28
  Team Nation Holdings Corporation
 Notes to the Financial Statements
 As of December 31, 2009 and 2008 and
 For the Years Ended December 31, 2009 and 2008
  Reconciliation of the effective tax rate to the U.S. statutory rate is as follows:
  2009


2008Tax benefit at U.S. statutory rate


(34.0
)%


(34.0
)%Change in valuation allowance


34.0
%


34.0
%Effective income tax rate


-
%


-
%
 The Company has federal net operating loss carryforwards of $1,788,565. The federal net operating loss carryforward will begin to expire in 2028.  Based upon its history of losses and management's assessment of when operations are anticipated to generate taxable income, the Company has concluded that it is more likely than not that the net deferred income tax assets will not be realized through future taxable earnings and, accordingly, has established a full valuation allowance for them. The valuation allowance increased by $808,744 during the year ended December 31, 2009 as a result of the current year’s net losses.
   14.       Loss Per Share
   Basic net loss per common share is computed by dividing net loss applicable to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents, consisting of shares that might be issued upon exercise of common stock options. In periods where losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.
   The Company incurred net losses in each of the periods presented, and as such, did not include the effect of potentially dilutive common stock equivalents in the diluted net loss per share calculation, as their effect would be anti-dilutive for all periods. Potentially dilutive common stock equivalents would include the common stock issuable upon conversion of preferred stock and the conversion of debt that have conversion prices below the market value of our common stock at the measurement date.  The following is a reconciliation of the number of shares used in the calculation of basic loss per share and diluted loss per share for the years ended December 31, 2009 and 2008:
  F-29
 Team Nation Holdings Corporation
 Notes to the Financial Statements
 As of December 31, 2009 and 2008 and
 For the Years Ended December 31, 2009 and 2008
  For the year ending December 31,2009


2008Numerator:Net loss

$
(3,622,446
)

$
(1,569,570
)Denominator:Weighted average number of common shares outstanding


54,304,646



38,436,064Incremental shares from the assumed conversion of debt and preferred stock


-



-Diluted common shares outstanding


54,304,646



38,436,064Net loss per share basic and diluted

$
(0.07
)

$
(0.04
)
 The following table sets forth the number of shares excluded from the computation of loss per share, as their effect would have been anti-dilutive:
  2009Series A Preferred Shares


55,454,850Shares issued upon conversion of debt


136,562,001192,016,851
 The Series A Preferred Shares are convertible into 1% of the Company's outstanding common shares at the time of 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.
  15.       Subsequent Events
  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 portion of this liability that is due after December 31, 2010 is presented as long term as of December 31, 2009.






F-30


ITEM9 — CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE





On June 25, 2008, Team Nation Holdings Corporation dismissed its former independent registered public accountants, Malone & Bailey, PC (“Malone & Bailey”), Certified Public Accountants, of Houston, Texas and engaged Moore & Associates, Chartered (“Moore & Associates”), Certified Public Accountants, of Las Vegas, Nevada, as its independent registered public accounting firm.  The decision to change accountants was approved by the Board of Directors of the Company.





On April, 10, 2009, the Company’s board of directors dismissed Moore & Associates and engaged the firm, Kelly & Company, Costa Mesa, California as the principal accountant to audit the Registrant’s financial statements for the fiscal year of the Registrant ended December 31, 2008.  Kelly & Company has also been retained to act as the principal accountant to audit the Registrant’s financial statements for the fiscal year of the Registrant ended December 31, 2009.





During the fiscal years ended December 31, 2007 and 2006 and the subsequent interim periods until the change, there were no disagreements with Malone & Bailey on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Malone & Bailey would have caused them to make reference in connection with their report to the subject matter of the disagreement, and Malone & Bailey has not advised the Company of any reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.





During the fiscal year ended December 31, 2008 and the subsequent interim period until the change, from Moore & Associates to Kelly & Company there were no disagreements with Moore & Associates on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Moore & Associates would have caused them to make reference in connection with their report to the subject matter of the disagreement, and Moore & Associates has not advised the Company of any reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.





The reports of independent registered public accounting firm of Malone & Bailey as of and for the years ended December 31, 2007 and 2006, did not contain any adverse opinion or disclaimer of opinion, nor was it qualified or modified as to audit scope or accounting principle.  The reports contained a “going concern” modification.





Moore & Associates did not issue any report on the Company’s financial statements however Moore & Associates reviewed the unaudited financial statements for the periods ended June 30, 2008 and September 30, 2008.





During the years ended December 31, 2007 and 2006, and through June 25, 2008, the Company did not consult with Moore & Associates regarding any of the matters or events set forth in Item 304(a)(2)(i) and (ii) of Regulation S-K.





During the years ended December 31, 2008 and 2007, and through March 30, 2010, the Company did not consult with Kelly & Company regarding any of the matters or events set forth in Item 304(a)(2)(i) and (ii) of Regulation S-K.





ITEM9A — CONTROLS AND PROCEDURES





The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s 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 the Company’s management, including its Chief Executive Officer / Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of “disclosure controls and procedures” in Rule 13a-15(e). 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.




As of December 31, 2009, the end of the period of this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer /Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective.




15
 Table of Contents




REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING





Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the company. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our financial statements; providing reasonable assurance that receipts and expenditures of company assets are made in accordance with management authorization; and providing reasonable assurance that unauthorized acquisition, use or disposition of company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected.





In connection with the preparation of this Annual Report on Form 10-K for the year ended December 31, 2009, management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our internal controls over financial reporting, pursuant to Rule 13a-15 under the Exchange Act. Our Chief Executive Officer and Chief Financial Officer concluded and reported to the Board of Directors that the design and operation of our internal controls and procedures were effective as of December 31, 2009.





There have been no material changes in the Company’s internal controls or in other factors that could significantly affect the internal controls subsequent to the date the Company completed its evaluation.





ITEM 9A(T). — CONTROLS AND PROCEDURES





This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management’s report in this annual report.








16
 Table of Contents


PART III





ITEM10 — DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT





The current Executive officers and Directors of Registrant are:




Name

Position

AgeDennis R. Duffy

Chief Executive Officer, Chairman of the Board and Director

67Janis Okerlund

President , Secretary and Director

41Daniel J. Duffy

Executive Vice President, Chief Financial Officer and Director

39Norman J. Francis

Executive Vice President  and Director

57





Business Experience





The following is a brief account of the business experience during at least the past five years of the directors and officers of the Registrant, indicating the principal occupation and employment during that period by each, and the name and principal business of the organizations by which they were employed.





Dennis R. Duffy, CEO and Director:





Mr. Duffy joined the Company in March 2007.  From July 2005 to March 2007, he was the Vice President and County Manager for Old Republic Title.  From August 2004 until July 2005, he was the Executive Vice President of Mercury Companies.  From June 2001 until July 2004, he was the President, Major Accounts Division of Stewart Title of California.  He started his career in the title insurance industry in 1960 with Title Insurance and Trust Company (TICOR) where he held various senior management positions over his 22 year tenure with the company.  In 1979, Mr., Duffy moved to SAFECO Title Insurance Company as marketing Manager and developed a nationwide network of 21 title entities throughout the US.  In 1980, Mr. Duffy and two partners acquired American Title Company (now known as North American Title Company) from SAFECO.  As President of American Title, Mr. Duffy grew the company to become the largest title agency in the USA serving 10 counties in California.  After selling the company in 1986 Mr. Duffy remained as a consultant until 1992, after which he consulted for several title companies on management and marketing.  In 1998 Mr. Duffy joined Fidelity National Financial (FNF) as Executive Vice President and COO of California and Arizona operations.  He ended his time with FNF after successfully assisting them with going public under the American Title umbrella with ANFI, its holding company.  Mr. Duffy worked briefly with the Mercury Companies and Old Republic Title before purchasing California Counties Title Company (“CCTC”) and co-founding Team.  Mr. Duffy holds a Masters of Business Degree from California Western University.





Janis Okerlund, Esq.,  President, Secretary  and Director:





Ms. Okerlund, April 2007 to present Team Nation Holding Corporation; September 2006 to April 2007 was with Old Republic Title –National Lender Division; December 2004 to September 2006, Investors Title as VP Asst. County Manager; and May 1998 to November 2004, Fidelity National Title Company as VP Underwriting Counsel, Major Accounts Division.  Ms. Okerlund began her career in the real estate industry at First American Title in Santa Ana, California, where she performed national title operations.  While finishing her law degree at Western State University, College of Law, Ms. Okerlund became proficient at managing and underwriting complex subdivision and commercial development transactions and was quickly snapped up by Fidelity National Title (FNF) upon her matriculation.  At FNF, Ms. Okerlund was instrumental in the growth of the Major Accounts Division into one of the most profitable specialized division in the entire FNF family. Her entrepreneurial spirit and drive for continued growth led her to the Mercury Companies, as Assistant County Manager for the Investors Title brand in Orange County, and to Old Republic Title before she partnered with three industry veteran to found Team and to acquire California Counties Title Company.  Ms. Okerlund was admitted to the State Bar of California in 2001 and is a licensed attorney.




17
 Table of Contents


Daniel J. Duffy, Executive Vice President and Director:





Daniel J Duffy, April 2007 to present Team Nation Holding Corporation; September 2006 – April 2007 with Old Republic Title-Major Accounts Division; August 2004 to September 2006 was with Investors Title-County Manager; and June 2001 to July 2004 was with Stewart Title of California as VP Major Accounts Division.  Mr. Duffy began his financial related career working for Wells Fargo as a clerk following his high school graduation. While attending CSUF, Dan worked through the branch system at Wells Fargo Bank and eventually moved to a Credit Union after completing his Bachelors of Fine Arts Degree. At the credit union Daniel worked in the commercial lending division in underwriting and sales. Choosing to enter into the title company arena, Daniel moved to American Tile Company and managed a national notary signing company now owned by FNF. Daniel followed the opportunity to get into the core title business by establishing the operations of Stewart Title’s Major Accounts Division in Anaheim Hills CA. During his management, Stewart Major Accounts was recognized as one of only a few division for it’s innovation as a technology leader for the Stewart companies. Daniel was recruited and established the Orange County operation for Investors Title Company as the County Manager. Daniel now works with Team Nation Holdings where he provides management oversight for title and accounting operations for the company and its managed companies.





Norman J. Francis, Executive Vice President and Director:





Mr. Francis has been with the Company since June 2007.  From June 2003 until June 2007, he was Los Angeles County Sales Manager with Alliance Title Company.  From September 2001 until May of 2003, he was  Los Angeles County Sales Manager with First Southwestern Title Co.  Raised in Fort Lauderdale, Florida, Norm Francis graduated in 1974 from Florida Atlantic University receiving an Associate of Arts Degree in Business.  Mr. Francis began his career in the Wholesale Lending Division of Sun Bank, where he rose to a Vice President before relocating to Southern California in 1980.  During his time with Sun Bank, Mr. Francis served as an active member and officer of The Board of Bankers Association.  After his move west, Mr. Francis used his extensive banking background to launch his career in the title insurance industry.  During his 28 years of service to the industry, Mr. Francis has experienced a wide range of title companies and philosophies which has allowed him the opportunity to spend a quality amount of time building a successful personal tenure in sales and sales management.  He takes special pride in teaching any Sales Associate to learn, therefore, propelling themselves into rewarding careers in the industry.





No appointee for a director position has been found guilty of any civil regulatory or criminal offense or is currently the subject of any civil regulatory proceeding or any criminal proceeding





Compliance with Section 16(a) of the Exchange Act





The Company’s common stock is not registered pursuant to Section 12 of the Securities Exchange Act of 1934 (the “Exchange Act”) and as a result the Company’s officers and directors, and persons who own more than ten percent of the Company’s equity securities are not required to comply with Section 16 of the Exchange Act.





Conflicts of Interest





Members of the Company’s management are associated with other firms involved in a range of business activities. Consequently, there are potential inherent conflicts of interest in their acting as officers and directors of the Company. Insofar as the officers and directors are engaged in other business activities, management anticipates it will devote only a minor amount of time to the Company’s affairs.





The Company’s Board of Directors has adopted a policy that the Company will not seek a merger with, or acquisition of, any entity in which any officer or director serves as an officer or director or in which they or their family members own or hold a controlling ownership interest. Although the Board of Directors could elect to change this policy, the Board of Directors has no present intention to do so.





There can be no assurance that management will resolve all conflicts of interest in favor of the Company.





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ITEM11 — EXECUTIVE COMPENSATION





EXECUTIVE COMPENSATION





Cash Compensation.





Compensation paid for all services provided up to December 31, 2009 — The following table sets forth certain information with respect to the compensation we paid for services rendered during the fiscal year ended December 31, 2009, with respect to our Chief Executive Officer and each other executive officer who received cash compensation in excess of $100,000. Note that not all the compensation earned was not paid to the executives due to cash constraints caused by economic conditions in 2009. Compensation accrued but not yet paid will be paid incrementally as the company is able, without impairment to its ongoing operations. There were no Option Awards or other compensation paid or accrued during the fiscal year ended December 31, 2009.





SUMMARY COMPENSATION TABLE




Name

Position

Accrued Compensation


Paid CompensationDennis R. Duffy

Chief Executive Officer,

$
151,200


$
99,953Chairman of the Board and DirectorJanis Okerlund, Esq.

President , Secretary and Director

$
151,200


$
103,808Daniel J. Duffy

Executive Vice PresidentChief Financial Officer and Director

$
0


$
57,500Norman J. Francis

Executive Vice President

$
0


$
67,447and Director




On December 23, 2009, the Company issued 15 shares each of its authorized Series A Convertible Preferred Stock to Dennis R. Duffy, Janis Okerlund, Esq., Daniel J. Duffy, and Norman J. Francis in consideration of their performance in fiscal 2009 and as an inducement to continue service in 2010.  Sixty shares were authorized under the designation of preferences and each shares has a stated value of $1000 USD.  Each share of the Series A Preferred Stock has voting rights equal to one percent (1%) of the Company’s outstanding Common Stock as of the record date for any vote of the Company’s Common Stock.  Each share of the Series A Preferred Stock is convertible into one percent (1%) of the Company’s outstanding Common Stock as of the date of the notice of conversion.  The Series A Preferred Stock does not accrue or be paid any dividends nor does it carry liquidation preferences over the Company’s Common Stock.





Option Grants, Exercise and Values





The Company does not currently have an adopted Stock Option Plan but hopes to formalize and adopt a plan for executives and key employees and recruits in 2009. There were no stock option grants or exercises during the fiscal year ended December 31, 2009.





Committees: Meetings of the Board





The Company does not have a separate Compensation Committee, Audit Committee or Nominating Committee. These functions are done by the Board of Directors meeting as a whole. The Company’s Board of Directors held both in person meetings during the fiscal year ended December 31, 2009 and meetings by telephone. All corporate actions by the Board of Directors were either consented to in writing by all Directors or were agreed to unanimously at a meeting where proper notice had been given and a quorum was present.




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Audit Committee





The board of directors has not established an audit committee. The functions of the audit committee are currently performed by the entire board of directors. The Company is under no legal obligation to establish an audit committee and has elected not to do so at this time so as to avoid the time and expense of identifying independent directors willing to serve on the audit committee. The Company may establish an audit committee in the future if the board determines it to be advisable or we are otherwise required to do so by applicable law, rule or regulation.





As the board of directors does not have an audit committee, it therefore has no “audit committee financial expert” within the meaning of Item 401(e) of Regulation S-B. except its chief financial officer. In general, an “audit committee financial expert” is an individual member of the audit committee who:





*
understands generally accepted accounting principles and financial statements,*
is able to assess the general application of such principles in connection with accounting for estimates, accruals and reserves,*
has experience preparing, auditing, analyzing or evaluating financial statements comparable to the breadth and complexity to our financial statements,*
understands internal controls over financial reporting, and*
understands audit committee functions.





Board of Directors Independence





None of the Company’s directors are “independent” within the meaning of definitions established by the Securities and Exchange Commission or any self-regulatory organization. The Company is not currently subject to any law, rule or regulation requiring that all or any portion of its board of directors include “independent” directors.





Director Nominees





The Company does not have a nominating committee. The board of directors, sitting as a board, selects those individuals to stand for election as members of our board. Since the board of directors does not include a majority of independent directors, the decision of the board as to director nominees is made by persons who have an interest in the outcome of the determination. The board will consider candidates for directors proposed by security holders, although no formal procedures for submitting candidates have been adopted. Until otherwise determined, not less than 90 days prior to the next annual board of directors’ meeting at which the slate of board nominees is adopted, the board accepts written submissions that include the name, address and telephone number of the proposed nominee, along with a brief statement of the candidate’s qualifications to serve as a director and a statement of why the shareholder submitting the name of the proposed nominee believes that the nomination would be in the best interests of shareholders. If the proposed nominee is not the security holder submitting the name of the candidate, a letter from the candidate agreeing to the submission of his or her name for consideration should be provided at the time of submission. The letter should be accompanied by a resume supporting the nominee’s qualifications to serve on the board of directors, as well as a list of references.





The board identifies director nominees through a combination of referrals, including by management, existing board members and security holders, where warranted. Once a candidate has been identified the board reviews the individual’s experience and background, and may discuss the proposed nominee with the source of the recommendation. If the board believes it to be appropriate, board members may meet with the proposed nominee before making a final determination whether to include the proposed nominee as a member of management’s slate of director nominees submitted for shareholders for election to the board.





Among the factors that the board considers when evaluating proposed nominees are their experience in the information technology industry, knowledge of and experience with and knowledge of and experience in business matters, finance, capital markets and mergers and acquisitions. The board may request additional information from the candidate prior to reaching a determination. The board is under no obligation to formally respond to all recommendations, although as a matter of practice, it will endeavor to do so.




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Security Holder Communications with our Board of Directors





The Company provides an informal process for security holders to send communications to our board of directors. Security holders who wish to contact the board of directors or any of its members may do so by writing to Team Nation Holdings Corporation, 4667 MacArthur Boulevard, Suite 150, Newport Beach, CA 92660.





Correspondence directed to an individual board member is referred, unopened, to that member. Correspondence not directed to a particular board member is referred, unopened, to the President and CEO.





Code of Ethics





Under the Sarbanes-Oxley Act of 2002 and the Securities and Exchange Commission’s related rules, the Company is required to disclose whether it has adopted a code of ethics that applies to the Company’s principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. The Company has adopted a code of ethics that applies to its chief executive officer, chief financial officer and other officers, legal counsel and to any person performing similar functions. The Company has made the code of ethics available and intends to provide disclosure of any amendments or waivers of the code within five business days after an amendment or waiver on the Company’s website wwww.teamnationholdings.com.





Compensation Discussion and Analysis





The following Compensation Discussion and Analysis (CD&A) provides information on the compensation programs established for our “Named Executive Officers” during our fiscal year ended December 31, 2009. All information provided herein should be read in conjunction with the tables provided below.





Our Board of Directors is responsible for establishing, implementing and monitoring the policies governing compensation for our executives. Currently our Board does not have a compensation committee. Our officers are members of our Board of Directors and are able to vote on matters of compensation. We are not currently under any legal obligation to establish a compensation committee and have elected not to do so at this time. In the future, we may establish a compensation committee if the Board determines it to be advisable or we are otherwise required to do so by applicable law, rule or regulation. During the year ended December 31, 2008 our Board did not employ any outside consultants to assist in carrying out its responsibilities with respect to executive compensation, although we have access to general executive compensation information regarding both local and national industry compensation practices. In future periods we may participate in regional and national surveys that benchmark executive compensation by peer group factors such as company size, annual revenues, market capitalization and geographical location.





The executive employment market in general is very competitive due to the number of companies with whom we compete to attract and retain executive and other staff with the requisite skills and experience to carry out our strategy and to maintain compliance with multiple Federal and State regulatory agencies. Many of these companies have significantly greater economic resources than our own. Our Board has recognized that our compensation packages must be able to attract and retain highly talented individuals that are committed to our goals and objectives, without at this time paying cash salaries that are competitive with some of our peers with greater economic resources. Our compensation structure is weighted towards equity compensation in the form of options to acquire common stock, which the Board believes motivates and encourages executives to pursue strategic opportunities while managing the risks involved in our current business stage, and aligns compensation incentives with value creation for our shareholders.




Components of Our Executive Compensation Program





Our current executive compensation program is entirely salary based. In the future we intend to incorporate additional components we believe are necessary in order for the Company to provide a competitive compensation package relative to our peers and to provide an appropriate mix between short-term and long-term cash and non-cash compensation. Elements of our future executive compensation are likely to include:


o
Base Salaryo
Stock Awardso
Other benefits available to all employeeso
Items specific to our President and Chief Executive Officer per an employment agreement




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Base Salary:   At present we do not have a salary structure for employees and Executives, and amounts are based on skill set, knowledge and responsibilities. Base salaries may be established as necessary. During the year ended December 31, 2009 none of our Named Executive Officers received a salary increase.





Stock Awards:   A portion of compensation paid to our executives will be equity based. We believe equity compensation helps align the interests of our executives with the interests of our shareholders. In that regard, our executives’ compensation is subject to downside risk in the event that our common stock price decreases. In addition, we believe stock awards provide incentives to aid in the retention of key executives. No stock compensation awards were granted during the year ending December 31, 2009.





Other Benefits:   Our Executive Officers and employees receive no other benefits.





ITEM12 — SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS





The following table shows the share ownership of officers, directors and 5% or greater shareholders as of March 29, 2010. There are 85,347,442 common shares at March 29, 2010




Name & Address (1)

No. Of Common Shares


% of OutstandingDennis R. Duffy (2)


10,053,412



11.78Daniel J. Duffy (3)


10,101,252



11.84Norm Francis (4)


10,057,248



11.78Janis D. Okerlund


8,451,116



9.9Officers and Directors as a Group(four persons)


38,663,028



45.30




(1)
C/o Team Nation Holding Corporation, 4667 MacArthur Boulevard, Suite 150, Newport Beach, CA 92660(2)
Held in the name of Dennis R. Duffy, Charlotte K. Duffy, his wife, and KE Enterprises, Inc.   Mr. Duffy disclaims any beneficial ownership of the shares held by KE Enterprises, Inc., but under Rule 13-d(3), beneficial ownership of these shares may be attributed to him(3)
Held in the name of Daniel J,. Duffy and One Track Management, Inc.   Mr. Duffy disclaims any beneficial ownership of the shares held by One Track Management, Inc., but under Rule 13-d(3), beneficial ownership of these shares may be attributed to him.(4)
Held in the name of Norman J. Francis and Louise K. Oshiro, his wife.





On December 23, 2009, the Company issued 15 shares each of its authorized Series A Convertible Preferred Stock to Dennis R. Duffy, Janis Okerlund, Esq., Daniel J. Duffy, and Norman J. Francis in consideration of their performance in fiscal 2009 and as an inducement to continue service in 2010.  Sixty shares were authorized under the designation of preferences and each shares has a stated value of $1000 USD.  Each share of the Series A Preferred Stock has voting rights equal to one percent (1%) of the Company’s outstanding Common Stock as of the record date for any vote of the Company’s Common Stock.  Each share of the Series A Preferred Stock is convertible into one percent (1%) of the Company’s outstanding Common Stock as of the date of the notice of conversion.  The Series A Preferred Stock does not accrue or be paid any dividends nor does it carry liquidation preferences over the Company’s Common Stock.


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ITEM13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS





Due To/From Affiliate





The Company's main source of revenue is from its vendor services contract with CCTN.




Accordingly, the Company is dependent on CCTN to provide working capital for operations.  The Company owed its affiliate, CCTN, $332,177 at December 31, 2008. Numerous transactions throughout the year both increased this balance and also eventually paid it down to a balance of $0 as of December 31, 2009. In 2009, CCTN provided working capital for TEAM totaling $3,172,129. Of this amount, TEAM paid back operating capital of $415,043 to CCTN. $1,089,510 of this affiliate debt was purchased by Eventus Capital and is recorded on the balance sheet due as a convertible debt obligation to Eventus Capital. Office sublease payments made from CCTN to TEAM in 2009 totaled $82,209 and office sublease payments made from TEAM to CCTN in 2009 totaled $112,478. The related party payable decreased throughout the year by $1,823,836 for TEAM services performed related to the vendor services agreement with TEAM. Also, Team assumed invoiced liabilities from CCTN for Title Plant rental contracts associated with the services TEAM provides to CCTN totaling $206,186.





By December 31, 2009, the Company was owed $313,321 from CCTN. Transactions causing this affiliate receivable consisted of $117,305 due from the vendor services agreement between TEAM and CCTN. TEAM also assumed invoiced liabilities of CCTN for legal invoices totaling $98,782 as well as invoices for Title Plant rental contracts of $249,613 associated with the services TEAM provides to CCTN. Payments were made against this receivable by CCTN to TEAM during the year of $152,379 for operating capital.





Notes receivable – stockholders — $2,261,350





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 December 31, 2009, from its four officers and directors was $2,261,350.  The funds were used by the officers and directors to purchase and fund CCTN.





A portion of the balance of the notes receivable was relieved during the year ended December 31, 2008 with shares of TEAM common stock. 364,548 common shares, valued at $1.00 per share for a total of $364,548 were returned to the company and retired to satisfy a portion of the outstanding notes receivable. The notes receivable balance increased during 2008 when TEAM made payments on a note payable on behalf of the four stockholders and directors to the former owner of CCTC.  The total of the payments was $167,494.  Also in 2008, the notes receivable balance was reduced with the satisfaction of accrued management fees of the four officers and directors in the amount of $276,750.   In 2009, the notes receivable increased by $45,884, which represents accrued interest on the notes.





Notes payable – shareholders — $0





At December 31, 2008, the Company had a demand note payable to an affiliate of a director in the amount of $13,958. The note was due on demand and did not bear interest.  It was satisfied in April 2009.





Purchase of Orange County, California Title plant





The Company acquired the Orange County title plant from California Counties Title Nation (“CCTN”) in December 2007.  CCTN is wholly owned by four affiliates of the four officers and directors of the Company.  The amount paid for the title plant was based on an appraisal and the consideration for the $710,000 purchase price included $200,000 in cash and a note payable by the Company in the amount of $510,000.  The note was non interest bearing and was paid in full in December 2008. The Company's acquisition of the title plant for Orange County from CCTC included a note payable in the amount of $510,000.  This amount was fully satisfied in 2008.




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Management Agreements





Management fee revenues





TEAM entered into a management agreement with CCTN, which is a Southern California title company operated by TEAM's officers and directors, 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 both companies in exchange for monthly management fees plus a share of net profits, determined quarterly.  This agreement was amended as of January 1, 2009 to change the monthly fee from $100,000 per month to $40,000 per month plus $60 per open title order.  Management fee revenue from CCTN was $1,949,940 and $1,200,000 for the years ended December 31, 2009 and 2008, respectively, and is shown as related party management fees in the statement of operations.  Title plant fees were $994,595 and $94,050 for the years ended December 31, 2009 and 2008, respectively.





Management fee expenses





TEAM entered into management agreements in 2007 with affiliates of the four officers and directors by which they would actively manage operations, human resources, accounting services, sales, and marketing efforts for the TEAM. Each of the four agreements called for a $15,000 monthly fee.  These agreements were cancelled on January 1, 2009.  The Company entered into new management agreements with two of the officers and directors as of July 1, 2009, each at a cost of $25,200 per month per agreement.  Total management fee expenses were $302,400 and $720,000 for the years ended December 31, 2009 and 2008, respectively.  TEAM paid for the services partially in cash and partially as a reduction in shareholder receivables.  Related party management fee expenses payable were $212,673 and $179,157 at December 31, 2009 and 2008.





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.





Shares Issued





In June 2008, 364,548 shares were returned to the company to partially satisfy outstanding notes receivable. The shares were valued at $1.00 per share and have been retired.





As discussed in note 11, 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.





On November 3, 2009, Sunderland Capital, LLC (Sunderland) bought $10,000 of the Company's convertible payable to an entity owned by an officer and director.  On that same date, Sunderland converted the $10,000 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.





On November 13, 2009, Sunderland bought $10,000 of the Company's convertible payable to an entity owned by an officer and director.  On that same date, Sunderland converted the $10,000 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.




On December 11, 2009, Eventus bought $10,000 of the Company's convertible payable to an entity owned by an officer and director.  On that same date, Eventus converted the $10,000 payable 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.




On December 16, 2009, Eventus bought $10,000 of the Company's convertible payable to an entity owned by an officer and director.  On that same date, Eventus converted the $10,000 payable into 665,070 shares of the Company's common stock at $0.015036 per share, a 40% discount to the prior 5 days closing average.





On December 22, 2009, Eventus bought $10,000 of the Company's convertible payable to an entity owned by an officer and director.  On that same date, Eventus converted the $10,000 payable 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.


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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.




ITEM14 — EXHIBITS, FINANCIAL STATEMENT SCHEDULES




(a)
(1)
See attached Financial Statements.(2)
Not applicable.(3)
See (b) below.


(b)

Exhibits filed with this annual report.


EXHIBITNO.
DESCRIPTION





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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ITEM15. PRINCIPAL ACCOUNTING FEES AND SERVICES





Audit Fees





Malone & Bailey, PC (“Malone & Bailey”), Certified Public Accountants, were our independent auditors for the fiscal year ended December 31, 2007. , 2006. On June 25, 2008, we dismissed Malone & Bailey and engaged Moore & Associates, (“Moore & Associates”), Certified Public Accountants as our independent registered public accounting firm. On April 10, 2009, our Board dismissed Moore & Associates and engaged Kelly & Company, PC, to serve as the independent registered public accounting firm to audit our financial statements and to serve as our independent registered public accounting firm for the fiscal year ended December 31, 2008.





We incurred aggregate fees payable to Malone & Bailey of approximately $40,750 for the fiscal year ended December 31, 2007, and paid them $49,525 for the fiscal year ended December 31, 2006, for professional services rendered for the audit of our annual financial statements for the year ended December 31, 2007; and for review of the financial statements included in our quarterly reports on Form 10QSB during these fiscal years. We incurred aggregate fees payable to Moore & Associates of $23,125 for review of the financial statements included in our quarterly reports on Form 10QSB during the fiscal year ended December 31, 2008.





We did not pay any fees to Kelly & Company during the fiscal years ended December 31, 2007 or 2006. Subsequent to December 31, 2007 we have incurred fees payable to Kelly & Co., PC of approximately $90,000 for professional services rendered for the audit of our financial statements for the year ended December 31, 2008.  We incurred fees payable to Kelly & Co., PC of approximately $35,000 for professional services rendered for the audit of our financial statements for the year ended December 31, 2009.





Audit-Related Fees





Neither Malone & Bailey, Moore & Associates nor Kelly & Company, PC were paid any additional fees for the fiscal years ended December 31, 2009 or 2008 for services related to the performance of the audit or review of our financial statements.





Tax Fees





No fees were paid for tax related services to any independent advisors during the years ended December 31, 2009 or 2008.





Other Fees





Neither Malone & Bailey, Moore & Associates nor Kelly & Company, PC were paid any other fees for professional services during the fiscal years ended December 31, 2009 or 2008.





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SIGNATURES





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




Team Nation Holdings CorporationDate: April 15, 2010
By:
/s/ Dennis R. DuffyDennis R. Duffy

Chief Executive Officer





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


Date: April 15, 2010
By:
/s/ Dennis R. DuffyDennis R. Duffy

Chief Financial Officer





DIRECTORS


Date:  April 15, 2010
By:
/s/ Dennis R. DuffyDennis R. Duffy

DirectorDate: April 15, 2010
By:
/s/ Daniel J. DuffyDaniel J. Duffy

DirectorDate: April 15, 2010
By:
/s/ Norman J. FrancisNorman J. Francis

DirectorDate: April 15, 2010
By:
/s/ Janis OkerlundJanis Okerlund

Director








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