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

The financial statements have been prepared in accordance with Securities Exchange Commission requirements for interim financial statements.  Therefore, they do not include all information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.  These financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company's Annual Report on form 10-K for the year ended July 31, 2009 as filed with the Securities Exchange Commission.

The results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the full year.  In the opinion of management, the information contained herein reflects all adjustments necessary to make the results of operations for the interim period a fair statement of such operations.  All such adjustments are of a normal recurring nature.

Li-ion Motors Corp (formerly EV Innovations, Inc. (formerly Hybrid Technologies, Inc.) was incorporated under the laws of the State of Nevada on April 12, 2000. EV Innovations, Inc.'sLi-ion Motors Corp (the “Company”) original business was the exploration and development of mineral interests. The Company abandoned these interests in 2003.

The Company is currently pursuing the development and marketing of electric powered vehicles and products based on the advanced lithium battery technology it has developed. As of July 31, 2009 the Company no longer considered itself a development stage company as planned principal operations have began in its primary line of business. The Company is organized by line of business and geographic area. The Company had two businesses, telecommunication services and the development and sale of electric powered vehicles.

On April 16, 2008, the Company sold their controlling interest of approximately 69% of the outstanding common stock in Zingo, Inc. (now Superlattice Power, Inc., “SPI”). Prior to April 16, 2008, SPI was a related party who provided telecommunication services to business and residential customers utilizing VOIP technology and currently is researching and developing rechargeable lithium ion batteries.

Effective April 15, 2008, the Company entered into a license agreement with SPI providing for their license to SPI of their patent applications and technologies for rechargeable lithium ion batteries for electric vehicles and other applications (“licensed products”). Under the license agreement, the Company has the right to purchase their requirements of lithium ion batteries from SPI, and their requirements of lithium ion batteries shall be supplied by SPI in preference to, and on a priority basis as compared with, supply and delivery arrangements in effect for other customers of SPI. The Company’s cost for lithium ion batteries purchased from SPI shall be SPI’s actual manufacturing costs for such batteries for the fiscal quarter of SPI in which the Company’s purchase takes place.

Under the terms of the license agreement, SPI has agreed to invest a minimum of $1,500,000 in each of the next two years in development of the technology for the Licensed Products. To date, investments have been made in the amount of $314,517 in the development of technology, and therefore, is not in compliance with its obligations under this covenant of the license agreement.  The Company has advised SPI in a letter dated October 1, 2009, that it will not give notice of default against SPI for their failure to comply with this covenant in the first year of the term of the license agreement.

The Company’s financial statements for the threesix months ended OctoberJanuary 31, 20092010 have been prepared on a going concern basis which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. As of OctoberJanuary 31, 2009,2010, the Company had a working capital deficiency of approximately $1.5$2.0 million and a deficiency of approximately $3.5$3.9 million. In addition, during the year ended July 31, 2009, the Company defaulted on interest payments on a loan and the shares used as collateral to secure the loan to Wyndom Capital Investments, Inc. (“Wyndom”) was used to extinguish the loan and all unpaid interest. The 10,000,000 shares to Wyndom to extinguish the debt representsrepresent 47.9% of the Company’s outstanding shares, sufficient to make Wyndom the controlling shareholder. The Company currently is still in default on the interest payments for the second loan. See Note 5 for further information. Management recognized that the Company’s continued existence is dependent upon its ability to obtain needed working capital through additional equity and/or debt financing and revenue to cover expenses as the Company continues to incur losses.

The Company’s business is subject to most of the risks inherent in the establishment of a new business enterprise. The likelihood of success of the Company must be considered in light of the expenses, difficulties, delays and unanticipated challenges encountered in connection with the formation of a new business, rising operating and development capital, and the marketing of a new product.  There is no assurance the Company will ultimately achieve a profitable level of operations.

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

In January 2009, the Company’s shareholders approved a one-for-three reverse stock split of its outstanding common shares which became effective on February 19, 2009. Also on February 19, 2009 the authorized shares of the Company was increased from 35,714,285 to 50,000,000 shares.

SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements included the accounts and records of the Company and its wholly-owned and majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. The Company does not have any special purpose entities. For those consolidated subsidiaries in which the company's ownership is less than 100 percent (100%), the outside stockholders' interests are shown as noncontrolling interest.  The noncontrolling interest of the company's earnings or loss is classified as net income (loss) attributable to noncontrolling interest in the consolidated statement of operations.

The following is a listing of the Company's subsidiaries and its ownership interests:

The preparation of financial statements prepared in accordance with the accounting standards 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. Actual results could differ from those estimates.

The fair value of accounts receivables, accounts payable and accrued expenses, long term debt, customer advances, and advances from related parties approximates fair value based on their short maturities.

The Company adopted FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) on January 1, 2008, for all financial assets and liabilities that are recognized or disclosed at fair value in the condensed consolidated financial statements on a recurring basis or on a nonrecurring basis during the reporting period. While the Company adopted the provisions of ASC 820 for nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis, no such assets or liabilities existed at the balance sheet date. As permitted by ASC 820, the Company delayed implementation of this standard for all nonfinancial assets and liabilities recognized or disclosed at fair value in the financial statements on a nonrecurring basis and adopted these provisions effective August 1, 2009.

The fair value is an exit price, representing the price 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.  The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability.  ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.  These tiers include:  Level 1, defined as observable inputs such as quoted market prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs about which little or no market data exists, therefore requiring an entity to develop its own assumptions.

As of OctoberJanuary 31, 2009,2010, the Company held certain financial assets that are measured at fair value on a recurring basis.  These consisted of cash and cash equivalents. The Company does not have any financial assets measured at fair value on a recurring basis as Level 2 or Level 3 and there were no transfers in or out of Level 2 or Level 3 during the three months ended OctoberJanuary 31, 2009.2010.

The following table sets forth by level, within the fair value hierarchy, the Company’s financial assets accounted for at fair value on a recurring basis as of OctoberJanuary 31, 2009.2010.

The Company had no financial assets accounted for on a non-recurring basis as of OctoberJanuary 31, 2009.2010.

There were no changes to the Company’s valuation techniques used to measure asset fair values on a recurring or nonrecurring basis during the threesix months ended OctoberJanuary 31, 20092010 and the Company did not have any financial liabilities as of OctoberJanuary 31, 2009.2010.

The Company has other financial instruments, such as receivables, accounts payable and other liabilities which have been excluded from the tables above.  Due to the short-term nature of these instruments, the carrying value of receivables, accounts payable and other liabilities approximate their fair values.

Cash and cash equivalents consist of highly liquid investments, which are readily convertible into cash with original maturities of three months or less.

The Company provides credit to customers in the normal course of business. An allowance for accounts receivable is estimated by management based in part on the aging of receivables and historical transactions. Periodically management reviews accounts receivable for accounts that appear to be uncollectible and writes off these uncollectible balances against the allowance accordingly.

Inventories are stated at the lower of cost or market. Cost is based on the specific identification method.

Property and equipment are recorded at cost less accumulated depreciation. Depreciation of property and equipment are accounted for by accelerated methods over the following estimated useful lives:

The Company capitalizes costs directly incurred in pursuing patent applications as deferred patent costs. When such applications result in an issued patent, the related costs are amortized over the remaining legal life of the patents, which is assumed to be 17 years, using the straight-line method. On a quarterly basis, the Company reviews the issued patents and pending patent applications and if the Company determines to abandon a patent application, or an issued patent no longer has economic value, the unamortized balance in deferred patent costs relating to that patent is immediately expensed. As of OctoberJanuary 31, 20092010 there were only pending patent applications.

The Company issues stock options to employees and other certain service providers under stockholder approved stock option programs that provide the right to purchase the Company’s stock pursuant to stock purchase programs. The Company also issued common stock for services performed.  The fair value of the stock options issued is estimated on the date of grant using the Black ScholesBlack-Scholes Option Pricing Model.  The fair value of common stock issued for services is estimated on the date of issuance based on the value of the stock issued or the consideration received.  See Note 8 of Notes to Consolidated Financial Statements for further disclosures and discussions.

The Company recognizes revenue in accordance with the guidance contained in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605, “Revenue Recognition”, (“ASC 605”) and other relevant accounting literature.  Revenue is recognized when the product has been delivered and title and risk of loss have passed to the customer, collection of the resulting receivable is deemed reasonably assured by management, persuasive evidence of an arrangement exists and the sale price is fixed and determinable.

Shipping and handling costs related to services and product sales are expensed as incurred.

Advertising costs are expensed as incurred and are included in general and administrative expenses. Total advertising expenditures for the threesix months ended OctoberJanuary 31, 20092010 and 20082009 and amounted to approximately $18,000$340,000 and $170,000,$179,000, respectively.

No set amount has been set aside for research and development (“R&D”) but all projects and purchases must be approved before being started or purchased. As of OctoberJanuary 31, 2009,2010, there have been expenses put toward research and development. For the threesix months ending OctoberJanuary 31, 2009,2010, salaries, payroll taxes, and benefits amounted to approximately $406,000$637,400 in R&D, parts and supplies was approximately $14,000,$19,528, shipping charges and battery management systems and other R&D were approximately $5,000, $8,000$11,420 and $200,$8,108, respectively.

The Company maintains cash deposit accounts and certificates of deposits which at times may exceed federally insured limits. These accounts have not experienced any losses and the Company believes it is not exposed to any significant credit risk related to cash.

The Company accounts for income taxes using an asset and liability approach under which deferred income taxes are recognized by applying enacted tax rates applicable to future years to the differences between the financial statement carrying amounts and the tax bases of reported assets and liabilities.

The principal item giving rise to deferred taxes is the net operating loss carry forward.

Effective August 1, 2007, uncertain tax positions are accounted for in accordance with FASB ASC 740, “Income Taxes” (“ASC 740”).

The Company accounts for long-lived assets in accordance with FASB ASC 360-10-35, “Impairment or Disposed of Long-lived Assets”, (“ASC 360-10-35”). The carrying value of long-lived assets is reviewed on a regular basis for the existence of facts and circumstances that may suggest impairment. The Company recognizes impairment when the sum of undiscounted future cash flows is less than the carrying amount of the asset. The write down of the asset is charged to the period in which the impairment occurs.

The functional currency for some foreign operations is the local currency. Assets and liabilities of foreign operations are translated at balance sheet date rates of exchange and income, expense and cash flow items are translated at the average exchange rate for the period. Translation adjustments in future periods will be recorded in Cumulative Other Comprehensive Income (Loss). The translation losses for the threesix months ended OctoberJanuary 31, 20092010 and 20082009 were approximately $300$0 and $2,400,$1,511, respectively.

The Company reports comprehensive loss in accordance with the requirements of FASB ASC 220-10-15, “Comprehensive Income”, (“ASC 220-10-15”). For the threesix months ended OctoberJanuary 31, 20092010 and 2008,2009, the difference between net loss and comprehensive loss is foreign currency translation.

Basic loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the specified period.  Diluted loss per common share is computed by dividing net loss by the weighted average number of common shares and potential common shares during the specified period. All potentially dilutive securities, which include options and warrants convertible into 1,185,0001,000,000 and 1,019,000 common shares at OctoberJanuary 31, 20092010 and 2008,2009, respectively, have been excluded from the computations, as their effect is anti-dilutive.

Inventories consist of the following:

Raw materials, work in progress and finished goods for the threesix months ended OctoberJanuary 31, 2009,2010, and year ended July 31, 2009, is related to the Company’s planned sales of electric powered vehicles.

Property and equipment consist of:

Depreciation expense for the threesix months ended OctoberJanuary 31, 2010 and 2009 was $38,983 and 2008 was $21,469 and $19,617,$41,432, respectively.

The Company received and repaid additional advances from SSRI (owned by a Company stockholder) for the six and three months ended OctoberJanuary 31, 2009 and year ended July 31, 20092010 in amounts of approximately $729,000$484,287 and $452,000, respectively$785,501 and $76,266 and $37,321, respectively. The Company also issued shares of stock for October 2009the payment of debt for the six and $2,174,400three months ended January 31, 2010 in the amounts of $616,500 and $827,600, respectively, for July 2009. As of October 31, 2009 and July 31, 2009, the amount due to SSRI was $374,671 and $97,940,$256,500 respectively.

The Company received and repaid additional advances from Greg Navone (Director of the Company) for the threesix months ended OctoberJanuary 31, 20092010 and year ended July 31, 2009 in amount of $0 and $0, respectively for October 2009 and $51,000 and $51,000, respectively, for July 2009. As of OctoberJanuary 31, 20092010 and July 31, 2009, the amount due to the Company was $0 and $0, respectively. Mr. Navone resigned as a Director of the Company on July 10, 2009.

The Company received and repaid additional advances from Superlattice Power, Inc. (prior subsidiary) for the six and three months ended OctoberJanuary 31, 2009 and year ended July 31, 20092010 in amounts of $10,800$640,472 and $113,346, respectively for October 2009 and $0 and $0, respectively, for July 2009.$103,217, respectively. As of OctoberJanuary 31, 20092010 and July 31, 2009, the amount due to the Company was $102,546($137,755) and $0, respectively.

Long-term debt consists of:

Principal maturities on continuing operations are as follows for the years ended July 31:

(1) In November 2007, the Company refinanced a loan on a building. The Company paid the remainder of the loan to Richard Howard, with $50,000 in cash and $1,000,000 from the new loan proceeds. The new loan with Bayview Loan Servicing, LLC is $1,000,000. The loan has an interest rate at 10.875% per annum with a monthly payment of $11,388, including interest. The loan is due on December 1, 2022. Interest expense for the threesix months ended OctoberJanuary 31, 20092010 and 20082009 for Bayview Loan Servicing, LLC is approximately $26,500$52,390 and $27,300,$54,389, respectively.

(2) On May 5, 2008, the Company entered into a loan agreement with Crystal Capital Ventures Inc. (“Crystal Capital”). The loan agreement provides for loans to the Company of up to $3,000,000, with a minimum initial loan of $500,000 taking place on May 19, 2008. The notes bear interest payable monthly in arrears at the rate of 10% per annum; and mature and are due and payable May 4, 2011. The loans under the loan agreement are secured by shares of the Company’s common stock held by Crystal Capital. The Company is required to issue shares as collateral at the rate of two and one half shares of the Company’s common stock for each dollar principal amount of the loan advanced to the Company.  Following disbursement of the first $1,000,000 of funds pursuant to the loan agreement, on May 27, 2008, the Company issued 7,500,000 shares of common stock as collateral to Crystal Capital. After the 1:3 reverse stock split in February 2009 the Company issued Crystal an additional 5,000,000 shares to make their shares held as collateral total 7,500,000.

As of OctoberJanuary 31, 2009,2010, the Company has borrowed the full $3,000,000 under the loan agreement from Crystal Capital. The Company paidaccrued interest to Crystal Capital of approximately $0$117,000 for the six months ended January 31, 2010 and $77,000 for the three months ended October 31, 2009, and $0 for the three months ended October 31, 2008, respectively. The Company went into default on the loan agreement in August 2008 but, as of December 7, 2009,March 22, 2010, the Company had not received notice of default from Crystal Capital.

(3) On January 31, 2009 the Company financed a workman’s compensation policy with Allegiance Direct Bank for the period January 31, 2009 to January 31, 2010 for $6,396.  The Company was required to make a down payment of approximately $1,966 in January 2009 and monthly payments including interest of 15.8%. Interest expense for the threesix months ended OctoberJanuary 31, 20092010 and 20082009 Allegiance Direct Bank is approximately $152$303 and $98,$0, respectively.

In January 2008, the Company’s shareholders approved a 1:7 reverse stock split.  Except for the presentation of common shares authorized and issued on the consolidated balance sheet and shares presented in the consolidated statement of stockholders’ equity (deficit), all shares and par share information has been revised to give retroactive effect to the reverse stock split.  Authorized shares were 50,000,000 and were increased to 250,000,000 on December 24, 2007. Crystal Capital Ventures Inc. holds 7,500,000 post reverse stock split shares as collateral for a loan up to $3,000,000 as discussed in Note 5.

The remainder of the shares under the 2006 stock option plan were granted and exercised on February 24, 2009, which closed that plan. The Company has registered the 2009 stock option plan with the SEC for 3,000,000 shares, and of those, 2,900,000 shares have been granted at an exercise price of $0.90 per share. 400,000 shares were exercised for the three months ended OctoberJanuary 31, 2009.2010.

The following is financial information relating to the Company’s business segments:

The Company records compensation expense in its consolidated statement of operations related to employee stock-based options and awards in accordance with FASB ASC 718, “Compensation”, (“ASC 718”).

The Company recognizes the cost of all employee stock options on a straight-line attribution basis over their respective contractual terms, net of estimated forfeitures. The Company has selected the modified prospective method of transition.

On September 30, 2009, 400,000 stock options were exercised at an exercised price of $.90 for a value of $360,000.

Stock Option Plan

As of OctoberJanuary 31, 2009, 1,285,0002010, 1,000,000 shares of common stock remain available for issuance under the stock option plan.

A summary of the option activity under the Company’s stock option plan as of July 31, 2009 and changes during the threesix months ended OctoberJanuary 31, 2009,2010, is presented below.

Stock compensation expense applicable to stock options for the threesix months ended OctoberJanuary 31, 20092010 and 20082009 was approximately $0 and $0, respectively. The aggregate intrinsic value of options outstanding as of OctoberJanuary 31, 20092010 was $580,650.

1,185,0001,000,000 of the Company’s outstanding options were exercisable as of OctoberJanuary 31, 2009.2010.

Loss per share is computed based on the weighted average number of shares outstanding during the year. Diluted loss per common share is computed by dividing net loss by the weighted average number of common shares and potential common shares during the specified periods. The Company has no outstanding options, warrants or other convertible instruments that could affect the calculated number of shares.

The following table sets forth the reconciliation of the basic and diluted net loss per common share computations for the threesix months ended OctoberJanuary 31, 20092010 and 2008.2009.

Net loss per common share for the threesix months ended OctoberJanuary 31, 20082010 has been revised.  This revision was immaterial to the Company’s consolidated results of operations and financial position. See below for further discussion. All share and per share amounts have been restated to reflect the one-for-seven and one-for-three reverse stock split as discussed in Note 6.

The amounts previously reported, in October 2008,January 2009, were as follows: