UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2016

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934

For the transition period from __________ to __________

Commission file number: 000-54694

WORLD MOTO, INC.

(Exact name of registrant as specified in its charter)

Nevada	77-0716386
(State or other jurisdiction	(IRS Employer Identification No.)
of Incorporation or organization)

Sukhumvit13 No.19/125 Sukhumvit Suite,

13 Floor, (Saengjan) Sukhumvit Rd,

Klongtoey Nue,Wattana Bangkok 10110

Thailand

(Address of principal executive offices and zip code)

(646) 840-8781

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

[X] Yes [ ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

[X] Yes [ ] No

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	[ ] Accelerated filer	[ ] Non-accelerated filer	[X] Smaller Reporting company
		(Do not check if smaller reporting company)

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

[ ] Yes [X] No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Outstanding at February 8, 2017
Common stock, $.0001 par value		1,490,145,045

World Moto, Inc.

Form 10-Q

For the Three Months Ended March 31, 2016

INDEX

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20
Item 4.	Controls and Procedures	20
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3.	Defaults Upon Senior Securities	22
Item 4.	Mine Safety Disclosures	22
Item 5.	Other Information	22
Item 6.	Exhibits	23
Signatures		24

FORWARD-LOOKING STATEMENTS

This Report on Form 10-Q contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Reference is made in particular to the description of our plans and objectives for future operations, assumptions underlying such plans and objectives, and other forward-looking statements included in this report. Such statements may be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “believe,” “estimate,” “anticipate,” “intend,” “continue,” or similar terms, variations of such terms or the negative of such terms. Such statements are based on management’s current expectations and are subject to a number of factors and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. Such statements address future events and conditions concerning, among others, capital expenditures, earnings, litigation, regulatory matters, liquidity and capital resources, and accounting matters. Actual results in each case could differ materially from those anticipated in such statements by reason of factors such as future economic conditions, changes in consumer demand, legislative, regulatory and competitive developments in markets in which we operate, results of litigation, and other circumstances affecting anticipated revenues and costs, and the risk factors set forth in our Annual Report on Form 10-K filed on November 14, 2016.

As used in this Form 10-Q, “we,” “us,” and “our” refer to World Moto, Inc., which is also sometimes referred to as the “Company.”

YOU SHOULD NOT PLACE UNDUE RELIANCE ON THESE FORWARD LOOKING STATEMENTS

The forward-looking statements made in this report on Form 10-Q relate only to events or information as of the date on which the statements are made in this report on Form 10-Q. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this report and the documents that we reference in this report, including documents referenced by incorporation, completely and with the understanding that our actual future results may be materially different from what we expect or hope.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

World Moto, Inc.

Consolidated Balance Sheets

(Unaudited)

	March 31, 2016			December 31, 2015
ASSETS
Current assets:
Cash and cash equivalents	$	36,800		$	14,772
Prepaid expenses and other current assets		16,103			15,588

Total current assets		52,903			30,360

Property and equipment, net of accumulated depreciation		26,346			28,106
Other assets		10,344			10,077

TOTAL ASSETS	$	89,593		$	68,543

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued expenses	$	558,334		$	524,792
Convertible notes payable, net of discount of $381,427 and $140,561, respectively, and net of deferred financing costs of $23,125 and $5,651, respectively		220,749			271,810
Derivative note liabilities		702,358			611,793
Short-term debt – related party		19,001			29,612
Unearned revenues		56,985			56,160

Total current liabilities		1,557,427			1,494,167

Long term convertible notes payable, net of discount of $276,591 and $402,754, respectively, and net of deferred financing costs of $17,517 and $20,090 respectively		8,759			4,859
Long-term derivative liabilities		282,317			442,915

Total liabilities		1,848,503			1,941,941

Stockholders’ deficit:
Preferred stock, $0.0001 par value; 50,000,000 shares authorized; no shares issued and outstanding		500			500
Common stock, $0.0001 par value, 2,000,000,000 shares authorized; 1,384,237,670 and 966,778,980 shares issued and outstanding, respectively		138,423			96,678
Additional paid-in capital		4,656,266			4,288,698
Accumulated deficit		(6,529,689	)		(6,235,125	)
Other comprehensive loss		(24,410	)		(24,149	)
Total stockholders' deficit		(1,758,910	)		(1,873,398	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	89,593		$	68,543

The accompanying notes are an integral part of these unaudited financial statements.

World Moto, Inc.

Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

	For the three months ended
	March 31,
	2016			2015

Revenues	$	-		$	-

Operating expenses:
Research and development		54,159			102,825
General and administrative		90,712			99,249
Total operating expenses		144,871			202,074

Loss from operations		144,871			202,074

Other income/expense:
Interest expense		285,857			323,170
Other income		(5,900	)		-
Change in fair value of derivative liabilities		(140,034	)		352,807
Loss on settlement of debt		9,770			(70	)
Total other expense		149,693			675,907

Net loss	$	(294,564	)	$	(877,981	)

Other comprehensive income (loss):
Foreign currency translations		(261	)		(449	)

Total comprehensive loss	$	(294,825	)	$	(878,430	)

Net loss per common share - basic and diluted	$	(0.00	)	$	(0.00	)

Weighted average number of common shares outstanding – basic and diluted		1,147,960,137			415,699,254

The accompanying notes are an integral part of these unaudited financial statements.

[Missing Graphic Reference]

World Moto, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

	For the three months ended
	March 31,
	2016			2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(294,564	)	$	(877,981	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		2,469			1,634
Fair value of derivative in excess of debts		20,583			161,264
Amortization of debt discount and deferred financing cost		251,742			160,011
Change in fair value of derivative liability		(140,034	)		352,807
Gain on settlement of debt		9,770
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(492	)		(14,223	)
Inventory		-			(2,308	)
Accounts payable and accrued expenses		36,600			26,280
Net cash used in operating activities		(113,926	)		(192,516	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of related party debt		(10,611	)
Payments on debt settlement		(75,778	)
Proceeds from convertible notes, net of financing costs		222,778			137,023
Net cash provided by financing activities		136,389			137,023

EFFECT OF FOREIGN CURRENCY TRANSLATIONS		(435	)		(449	)

Net change in cash and cash equivalents		22,028			(55,942	)
Cash and cash equivalent at beginning of the period		14,772			169,265

Cash and cash equivalent at end of the period	$	36,800		$	113,323

SUPPLEMENTAL CASH FLOWS INFORMATION:
Cash paid for:
Income tax	$	-		$	-
Interest		-			-
NONCASH INVESTING AND FINANCING ACTIVITIES:
Shares issued for conversion of debt	$	409,313		$	234,355
Derivative liabilities from issurance of convertible debt		259,944			-
Reclassification of fair value of derivatives from liabilities to equity		-			251,597

The accompanying notes are an integral part of these unaudited financial statements.

World Moto, Inc.

Notes to the Consolidated Financial Statements

(Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

World Moto, Inc. (the “Company”) was incorporated in the State of Nevada on March 24, 2008 under the name Net Profits Ten Inc. The original purpose of the Company was to market and distribute user-friendly interactive yearbook software for the military. The Company was reclassified as a shell company until the completion of its acquisition of the World Moto Assets, which was consummated on November 14, 2012, and discussed in Note 3. Effective November 12, 2012, the Company amended its Articles of Incorporation to change its name from “Net Profits Ten Inc.” to “World Moto, Inc.”

On January 30, 2013, World Moto, Inc. established two wholly owned subsidiaries that were incorporated in the State of Nevada. World Moto Technologies, Inc. and World Moto Holdings, Inc. were both established, but have no activity to report to date. On February 4, 2013, World Moto Technologies Ltd, a wholly owned subsidiary of the Company, was organized under the laws of the Kingdom of Thailand and the name of this company was later changed to World Moto Co., Ltd. World Moto Co., Ltd. is owned in its entirety by World Moto, Inc., World Moto Technologies, Inc. and World Moto Holdings, Inc. and it is an operating entity of the Company in Thailand for the purposes of research and development in the Southeast Asia region.

The Company design, manufacture, market and sell Moto-Meter products and services, including the Moto-Meter and its related smartphone application, the Yes service and HailYes™ app, and Wheelies. The Company seek to address the need for fare metering and mobile commerce for motor scooters and motorcycle taxis. The use of these taxis is increasingly common in the developing world. The Company planned products, however, will have increased functionalities over a standard fare meter commonly used in an enclosed taxicab.

Basis of Presentation

The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information in accordance with Securities and Exchange Commission ("SEC") Regulation S-X rule 8-03 and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's last Annual Report filed with the SEC on Form 10-K for the year ended December 31, 2015. In the opinion of management, the unaudited consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include normal recurring adjustments, necessary to present fairly the financial position as of March 31, 2016 and the results of operations and cash flows for the periods then ended. The financial data and other information disclosed in these notes to the interim consolidated financial statements related to the period are unaudited. The results for the three-month period ended March 31, 2016 are not necessarily indicative of the results to be expected for any subsequent quarters or for the entire year ending December 31, 2016. Notes to the unaudited interim consolidated financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year as reported in the Form 10-K have been omitted.

Principal of Consolidation

The consolidated financial statements include the accounts of World Moto Technologies, Inc., World Moto Holdings, Inc., and World Moto Co. Ltd, all 100% owned subsidiaries. All significant intercompany balances and transactions have been eliminated upon consolidation.

Use of Estimates

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

Cash and Cash Equivalents

The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.

Foreign Currency Translation

The functional currency of our subsidiary is the Thai Baht. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income (loss) for the respective periods.

For financial reporting purposes, the financial statements of the subsidiary are translated into the Company’s reporting currency, United States Dollars (“USD”). Asset and liability accounts are translated using the closing exchange rate in effect at the balance sheet date, equity account and dividend are translated using historical exchange rates and income and expense accounts are translated using the average exchange rate prevailing during the reporting period.

Adjustments resulting from the translation, if any, are included in accumulated other comprehensive income (loss) in stockholder’s equity (deficit).

World Moto, Inc.

Notes to the Consolidated Financial Statements

(Unaudited)

Long-Lived Assets

Property and equipment

Property and equipment are recorded at cost. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method of 3 years for financial statement purposes.

Software

The Company capitalizes software acquisition and development costs incurred during the software application development stage. The software application development stage is characterized by software design and configuration activities, coding, testing and installation. Training and maintenance costs are expensed as incurred, while upgrades and enhancements are capitalized if it is probable that such expenditures will result in additional functionality. Capitalized software acquisition and development costs, once placed in service, are amortized using the straight-line method over the estimated useful life of 3 to 10 years. Capitalized software acquisition and development costs subject to amortization are carried at cost less accumulated amortization.

Patents

Patents are initially measured based on their fair values. Patents are being amortized on the straight-line method over the estimated useful life of 10 to 20 years.

Management evaluates the recoverability of the Company’s property and equipment including patent development costs when events or circumstances indicate a potential impairment exists. The Company considers certain events and circumstances in determining whether the carrying value of identifiable property and equipment may not be recoverable including, but not limited to: significant changes in performance relative to expected operating results; significant changes in the use of the assets; significant negative industry or economic trends; and changes in the business strategy. In determining if impairment exists, the Company estimates the undiscounted cash flows to be generated from the use and ultimate disposition of these assets. If impairment is indicated based on a comparison of the assets' carrying values and the undiscounted cash flows, the impairment loss is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Income Taxes

The Company uses the asset and liability method in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and income tax carrying amounts of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company reviews deferred tax assets for a valuation allowance based upon whether it is more likely than not that the deferred tax asset will be fully realized. A valuation allowance, if necessary, is provided against deferred tax assets, based upon management’s assessment as to their realization.

Fair Value Measurement

The Company values its derivative instruments under FASB ASC 820 which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

Fair value is 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 (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

The three levels of the fair value hierarchy are as follows:

Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.

Level 2 - Valuations for assets and liabilities that can be obtained from readily available pricing sources via independent providers for market transactions involving similar assets or liabilities. The Company’s principal markets for these securities are the secondary institutional markets, and valuations are based on observable market data in those markets.

Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The Company uses Level 3 to value its derivative instruments.

World Moto, Inc.

Notes to the Consolidated Financial Statements

(Unaudited)

The following table sets forth by level with the fair value hierarchy the Company’s financial assets and liabilities measured at fair value on March 31, 2016.

	Level 1		Level 2		Level 3		Total
Liabilities
Derivative liability	$	-	$	-	$	984,675	$	984,675

Revenue Recognition

The Company recognizes revenue only when all of the following criteria have been met:

•	Persuasive evidence of an arrangement exists;
•	Delivery has occurred or services have been rendered;
•	The fee for the arrangement is fixed or determinable; and
•	Collectibility is reasonably assured.

Persuasive Evidence of an Arrangement – The Company documents all terms of an arrangement in a written contract signed by the customer prior to recognizing revenue.

Delivery Has Occurred or Services Have Been Performed – The Company performs all services or delivers all products prior to recognizing revenue. Monthly services are considered to be performed ratably over the term of the arrangement. Professional consulting services are considered to be performed when the services are complete. Equipment is considered delivered upon delivery to a customer’s designated location.

The Fee for the Arrangement Is Fixed or Determinable – Prior to recognizing revenue, a customer’s fee is either fixed or determinable under the terms of the written contract. Fees for most monthly services, professional consulting services, and equipment sales and rentals are fixed under the terms of the written contract. Fees for certain monthly services, including certain portions of networking, storage, and content distribution and caching services, are variable based on an objectively determinable factor such as usage. Those factors are included in the written contract such that the customer’s fee is determinable. The customer’s fee is negotiated at the outset of the arrangement and is not subject to refund or adjustment during the initial term of the arrangement.

Collectability Is Reasonably Assured – The Company determines that collectability is reasonably assured prior to recognizing revenue. Collectability is assessed on a customer by customer basis based on criteria outlined by management. New customers are subject to a credit review process, which evaluates the customer’s financial position and ultimately its ability to pay. The Company does not enter into arrangements unless collectability is reasonably assured at the outset. Existing customers are subject to ongoing credit evaluations based on payment history and other factors. If it is determined during the arrangement that collectability is not reasonably assured, revenue is recognized on a cash basis.

Franchise Fee Revenue

Revenues from licensees include a royalty based on a percent of sales, and may include initial fees. Continuing royalties are recognized in the period earned. Initial fees are recognized upon granting of a new franchise term, which is when the Company has performed substantially all initial services required by the franchise arrangement and after the franchisee commences operations. Additionally, the first twelve months of operations are royalty free for the franchisee.

Stock-based Compensation

The Company expenses the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of such instruments over the service period.

Equity instruments issued to parties other than employees for acquiring goods or services are recorded at either the fair value of the consideration received or the fair value of the instruments issued in exchange for such services, whichever is more reliably measurable.

Subsequent Event

The Company evaluated subsequent events through the date when financial statements are issued for disclosure consideration.

World Moto, Inc.

Notes to the Consolidated Financial Statements

(Unaudited)

Recent Accounting Pronouncements

As of December 31, 2015, the Company adopted guidance codified in ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs. The guidance simplifies the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs is not affected. Therefore, these costs will continue to be amortized as interest expense using the effective interest method pursuant to ASC 835-30-35-2 through 35-3. The Company has applied this guidance retrospectively to all prior periods presented in the Company's financial statements. The reclassification did not impact previously reported net income (loss) or any prior amounts reported on the Consolidated Balance Sheets, Consolidated Statements of Operations and Comprehensive Loss or the Consolidated Statements of Cash Flows.

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

NOTE 2 – GOING CONCERN

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. However, the Company has an accumulated deficit of $6,529,689 as of March 31, 2016, has limited liquidity, and has not established a reliable source of revenues sufficient to cover operating costs over an extended period of time. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 3 – UNEARNED REVENUES

On December 2, 2013, WM Co. Thailand entered into a Purchase and Licensing Agreement (the "PL Agreement") with Mobile Advertising Ventures Ltd. ("MAV"). Pursuant to the terms of the PL Agreement, MAV will purchase 10 initial "Wheelies" from WM Co. Thailand at a total purchase price of $35,000, and will have an option to purchase an additional 190 Wheelies at a purchase price of $3,500 per unit. WM Co. Thailand also grants a non-exclusive license to MAV for the use of its software in connection with the operation of the Wheelies in consideration for a fee based on net revenue per quarter from advertising sales relating to the use of the Wheelies. The Company received $35,000 from MAV before December 31, 2013 and has been recorded unearned as revenues.

On March 10, 2014, the Company entered into a Fleet Franchise Agreement ("the Franchise Agreement") with Mobile Advertising Ventures, Ltd. ("MAV"). MAV paid the Company $21,985 for the right to utilize the Yes software and all other trademarks of the Company, including but not limited to "Yes", "World Moto" and "Wheelies" (collectively, the "Marks") in the Federal Territory of Kuala Lumpur, Malaysia. Initial training has been completed for the Franchisee; however, the Franchisee has not begun operations. This revenue will be reclassified as earned when MAV completes its first sale using the Yes software.

NOTE 4 – RELATED PARTY TRANSACTIONS

At March 31, 2016 and December 31, 2015, the Company has short-term debt of $19,001 and $29,612, respectively, due to one of its majority shareholders. During the quarter ended March 31, 2016, the Company repaid $10,611 of the related party debt. During the quarter ended March 31, 2016, the Company repaid $0 of related party debt. The loan is accruing interest at a rate of 0%.

NOTE 5 – CONVERTIBLE NOTES PAYABLE

On January 11, 2016, the Company entered into a convertible notes with Union Capital for an aggregate principal amount of $31,639, to settle the convertible note and accrued interest of the Vis Vires Note #1 dated July 10, 2015.

The note earns an interest rate equal to 8% per annum and matures on January 11, 2017. The note is convertible at 60% of the lowest trading price of the Company’s common stock during the 20 trading days prior to the date of conversion. Due to this provision, the embedded conversion option qualified for derivative accounting under ASC 815-15, Derivatives and Hedging. Pursuant to this note, the Company recorded a debt discount of $31,639, as a result of the embedded conversion feature being a financial derivative. The Company determined that the fair value of the conversion feature was $32,832 at the issuance date. On the settlement date, the Company determined that the fair value of the conversion feature related to the Vis Vires note was $71,576.

On January 11, 2016, the Company entered into a second convertible note with Union Capital for an aggregate principal amount of $31,639 to settle the convertible note and accrued interest of the Vis Vires Note #1 dated July 10, 2015.

On January 11, 2016, the Company entered into a third convertible note with Union Capital for an aggregate principal amount of $71,631 to settle the convertible note and accrued interest of the Vis Vires Group #1 dated July 10, 2015.

World Moto, Inc.

Notes to the Consolidated Financial Statements

(Unaudited)

The note earns an interest rate equal to 8% per annum and matures on January 11, 2017. The note is convertible at 60% of the lowest trading price of the Company’s common stock during the 20 trading days prior to the date of conversion. Due to this provision, the embedded conversion option qualified for derivative accounting under ASC 815-15, Derivatives and Hedging. Pursuant to this note, the Company recorded a debt discount of $67,800, as a result of the embedded conversion feature being a financial derivative. The Company determined that the fair value of the conversion feature was $67,800 at the issuance date.

On January 25, 2016, the Company entered into a fourth convertible note with Union Capital for an aggregate principal amount of $25,963.

The note earns an interest rate equal to 8% per annum and matures on January 25, 2017. The note is convertible at 60% of the lowest trading price of the Company’s common stock during the 20 trading days prior to the conversion date. Due to this provision, the embedded conversion option qualified for derivative accounting under ASC 815-15, Derivatives and Hedging. Pursuant to this note, the Company recorded a debt discount of $25,322, as a result of the embedded conversion feature being a financial derivative. The Company determined that the fair value of the conversion feature was $25,322 at the issuance date.

On January 25, 2016, the Company entered into a fifth convertible note with Union Capital for an aggregate principal amount of $46,765 to settle for the convertible note and accrued interest of the Vis Vires Group dated July 27, 2015.

The note earns an interest rate equal to 8% per annum and matures on January 11, 2017. The note is convertible at 60% of the lowest trading price of the Company’s common stock during the 20 trading days prior to the date of conversion. Due to this provision, the embedded conversion option qualified for derivative accounting under ASC 815-15, Derivatives and Hedging. Pursuant to this note, the Company recorded a debt discount of $41,292, as a result of the embedded conversion feature being a financial derivative. The Company determined that the fair value of the conversion feature was $41,292 at the issuance date. On the settlement date, the Company determined that the fair value of the conversion feature related to the Vis Vires Group note was $38,880.

On February 1, 2016, the Company entered into a sixth convertible note with Union Capital for an aggregate principal amount of $60,000.

The note earns an interest rate equal to 8% per annum and matures on February 1, 2017. The note is convertible at 60% of the lowest trading price of the Company’s common stock during the 20 trading days prior to the conversion date. Due to this provision, the embedded conversion option qualified for derivative accounting under ASC 815-15, Derivatives and Hedging. Pursuant to this note, the Company recorded a debt discount of $55,884, as a result of the embedded conversion feature being a financial derivative. The Company determined that the fair value of the conversion feature was $55,884 at the issuance date.

On February 19, 2016, the Company entered into a convertible note with GW Holding Group Note #1 for an aggregate principal amount of $38,000.

The note earns an interest rate equal to 10% per annum and matures on February 19, 2017. The note is convertible at 52% of the lowest trading price of the Company’s common stock during the 20 trading days prior to the conversion date. Due to this provision, the embedded conversion option qualified for derivative accounting under ASC 815-15, Derivatives and Hedging. Pursuant to this note, the Company recorded a debt discount of $38,000, as a result of the embedded conversion feature being a financial derivative. The Company determined that the fair value of the conversion feature was $43,582 at the issuance date.

On March 30, 2016, the Company entered into a second convertible note with GW Holding Group Note #2 for an aggregate principal amount of $30,000.

The note earns an interest rate equal to 10% per annum and matures on March 30, 2017. The note is convertible at 52% of the lowest trading price of the Company’s common stock during the 20 trading days prior to the conversion date. Due to this provision, the embedded conversion option qualified for derivative accounting under ASC 815-15, Derivatives and Hedging. Pursuant to this note, the Company recorded a debt discount of $30,000, as a result of the embedded conversion feature being a financial derivative. The Company determined that the fair value of the conversion feature was $34,616 at the issuance date.

On March 30, 2016, the Company entered into a convertible note with Union Capital Backend Note #14 for an aggregate principal amount of $66,750, as of March 30, 2016, the Company only received $35,000 cash for the note.

The note earns an interest rate equal to 8% per annum and matures on March 31, 2017. The note is convertible at 52% of the lowest trading price of the Company’s common stock during the 20 trading days prior to the conversion date. Due to this provision, the embedded conversion option qualified for derivative accounting under ASC 815-15, Derivatives and Hedging. Pursuant to this note, the Company recorded a debt discount of $33,877, as a result of the embedded conversion feature being a financial derivative. The Company determined that the fair value of the conversion feature was $33,877 at the issuance date.

As summary of value changes to the notes for the three months ended March 31, 2016 is as follows:

Carrying value of Convertible Notes at December 31, 2015	$	276,669
Additional principal		256,637
Total principal		533,306
Less: conversion of principal		(174,194	)
Less: discount related to fair value of the embedded conversion feature		(348,545	)
Less: deferred financing cost related to debt issuances		(25,801	)
Less: discount related to original issue discount		(7,000	)
Add: amortization of deferred financing cost		10,900
Add: amortization of discount		240,842
Carrying value of Convertible Notes at March 31, 2016	$	229,508
Less: short-term portion		(220,749	)
Long-term convertible notes payable	$	8,759

World Moto, Inc.

Notes to the Consolidated Financial Statements

(Unaudited)

NOTE 6 – DERIVATIVE LIABILITIES

The Company has determined that the variable conversion prices under its convertible notes caused the embedded conversation feature to be a financial derivative. The Company may not have enough authorized common stock to settle its obligation if the note holder elects to convert the note into common shares when the trading price is lower than a certain threshold.

The derivative instruments were valued at loan origination date, date of debt conversion and at March 31, 2016, The fair values of the derivative liabilities related to the conversion options of these notes was estimated on the transaction dates (loan original date and date of debt conversion) using the Multinomial Lattice option pricing model, under the following assumptions:

	December 31,			New			March 31,
	2015			Issuances			2016

Shares of common stock issuable upon exercise of debt		998,958,397			13,615,794			34,984,114
Estimated market value of common stock on measurement date		0.0014 - 0.05		$	0.02-0.0261		$	0.0196
Exercise price		0.0007 – 0.1		$	0.009 - 0.03		$	0.0004 - 0.0014
Risk free interest rate (1)		0.04% - 0.25	%		0.25	%		0.05% - 0.25	%
Expected dividend yield (2)		0.00	%		0.00	%		0.00	%
Expected volatility (3)		61.54% - 105	%		119.11% - 125.57	%		207% - 223	%
Expected exercise term in years (4)		0.25 - 1.00			0.75			0.08 - 1.00

	(1)	The risk –free interest rate was determined by management using the one month Treasury bill yield as of the valuation dates.

	(2)	The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the share options and similar instruments.

	(3)	The volatility was determined by referring to the average historical volatility of a peer group of public companies because we do not have sufficient trade history to determine our historical volatility.

	(4)	The exercise term is the remaining contractual term of the convertible instrument at the valuation date.

The change in fair values of the derivative liabilities related to the Convertible Notes for the three months ended March 31, 2016 is summarized as:

Fair value of derivatives December 31, 2015	$	1,054,708
New issuances		258,580
Conversion of derivative liabilities		(188,579	)
Change in fair value of derivative liabilities		(140,034)
Fair value of derivative liabilities at March 31, 2016	$	984,675

World Moto, Inc.

Notes to the Consolidated Financial Statements

(Unaudited)

NOTE 7 – EQUITY TRANSACTIONS

During the three months ended March 31, 2016, the Company issued 417,458,690 shares of common stock for the conversion of notes payable and accrued interest in the amount of $409,314. The Company also recorded $367,568 as increase in additional paid-in capital from derivative liability as a result of the conversions.

NOTE 8 – COMMITMENTS AND CONTINGENCIES

The principal offices for the Company are currently located in Bangkok, Thailand. Annual rent on this location is approximately $700.

On April 16, 2013, the Company entered into a lease agreement with National Science and Technology Development Agency for 665 square feet of office space at 131 Thailand Science Park INC -1 # 214, Pathum Thani, Thailand. This office includes its executive offices and engineering facilities. On December 25, 2013, the Company entered into another lease agreement with National Science and Technology Development Agency for additional office space in the science park and the lease matures on November 30, 2016. Rent for the offices is approximately $22,000 per year.

On December 25, 2013, the Company entered into an office maintenance service agreement with National Science and Technology Development Agency, the service agreement expires on the same date as the lease agreement. The annual service fee is approximately $21,000 per year.

The Company has shared office space in New York City, located at 55 Broad Street, 28th Floor, New York, NY 10004. The annual rent for this location is currently being gifted to the Company.

As of March 31, 2016, the company ceased making lease payments to the National Science and Technology Development Agency. The Company does not have any outstanding lease payments obligation to National Science Technology Development Agency. The Company is currently negotiating a new office space lease.

NOTE 9 – SUBSEQUENT EVENTS

Subsequent to March 31, 2016, the Company issued 105,907,375 shares for conversion $25,418 of convertible notes and payable accrued interests.

On May 20, 2016, the Company entered into a convertible note with GW Holding Group, Note #3 for an aggregate principal amount of $37,050.

The note earns an interest rate equal to 10% per annum and matures on May 20, 2017. The note is convertible at 48% of the lowest trading price of the Company’s common stock during the 20 trading days prior to the conversion date. Due to this provision, the embedded conversion option qualified for derivative accounting under ASC 815-15, Derivatives and Hedging. Pursuant to this note, the Company recorded a debt discount of $37,050, as a result of the embedded conversion feature being a financial derivative. The Company determined that the fair value of the conversion feature was $64,876 at the issuance date.

On May 20, 2016, the Company entered into a convertible back-end note with GW Holding Group, Note #4 for an aggregate principal amount of $37,050.

The note earns an interest rate equal to 10% per annum and matures on May 20, 2017. The note is convertible at 48% of the lowest trading price of the Company’s common stock during the 20 trading days prior to the conversion date. Due to this provision, the embedded conversion option qualified for derivative accounting under ASC 815-15, Derivatives and Hedging. The Company determined that the fair value of the conversion feature was $64,876 at the issuance date. This note is collateralized by $37,050 promissory note to the company dated May 20, 2017. On June 24, 2016, the Company received the first disbursement of $10,000 of the convertible back-end note with GW Holding Group, Note #4.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with our consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q. Forward looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward-looking statements are based upon estimates, forecasts, and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking statements made by us, or on our behalf. We disclaim any obligation to update forward-looking statements.

Overview

World Moto, Inc. was incorporated on March 24, 2008, in the State of Nevada under the name Net Profits Ten Inc. On November 8, 2012, we amended our Articles of Incorporation to increase our authorized shares of common stock from 100,000,000 to 500,000,000 and our board of directors approved a stock dividend of 180 shares of common stock of the Company for each share of common stock issued and outstanding. Additionally, on November 12, 2012, we amended our Articles of Incorporation to change our name from “Net Profits Ten Inc.” to “World Moto, Inc.”, which name change became effective on November 15, 2012, upon approval from the Financial Industry Regulatory Authority (“FINRA”). On January 18, 2014, we amended our Articles of Incorporation to increase our authorized shares of common stock from 500,000,000 to 1,000,000,000. On April 9, 2015, we further amended our Articles of Incorporation to increase our authorized shares of common stock from 1,000,000,000 to 2,000,000,000.

On September 1, 2012, we entered in an Asset Purchase Agreement (“Agreement”) with World Moto (Thailand) Co., Ltd., a corporation established under the laws of the Kingdom of Thailand (“Old WM”), Chris Ziomkowski, the Chief Technical Officer of Old WM and Paul Giles, the Chief Executive Officer of Old WM. The Agreement was consummated on November 14, 2012. We purchased from Old WM substantially all of the intellectual property and certain other specific intellectual property assets related to Old WM’s initial product, the Moto-Meter (the “Assets”), which includes three United States patent applications, the data related to the patent applications, certain software related to the operation of the Moto-Meter, several URLs and trade-names and associated names related to the Moto-Meter and Old WM.

On January 30, 2013, we established two wholly owned subsidiaries that were incorporated in the State of Nevada. World Moto Technologies, Inc. and World Moto Holdings, Inc. were both established, but have no activity to report to date. On February 4, 2013, World Moto Technologies Ltd. was organized under the laws of the Kingdom of Thailand. The name was later changed to World Moto Co., Ltd. (“WM Co. Thailand”). WM Co. Thailand is owned in its entirety by World Moto, Inc., World Moto Technologies, Inc. and World Moto Holdings, Inc. and represents our operating entity for the purposes of research and development in the Southeast Asia region.

As of March 31, 2015, WM Co. Thailand had 12 employees. WM Co. Thailand has been performing extensive research and development activities since its inception related to improving the Moto-Meter design to allow for higher yields in mass production, as well as substantial work on the Wheelies product.

As of December 31, 2015, WM Co. Thailand had 12 employees. WM Co. Thailand has been performing extensive research and development activities since its inception related to improving the Moto-Meter design to allow for higher yields in mass production, as well as substantial work on the Wheelies product, previously known as Circulars. In March 2016, we released most of its research and development staff in order to save cost and concentrate on production. As of March 31, 2016, WM Co. Thailand retains 2 employees.

Business Overview

Plan of Operations

We plan to establish ourselves as a company that designs, manufactures, markets and sells the Moto-Meter products, which are devices that provide moto-taxi fare metering and other communication capabilities. We currently have patent applications pending for our products in 56 countries. To achieve our objective, we have established our operational subsidiary in Thailand for product development and a presence in two additional potential markets, Brazil and Nigeria, and begun expanding our work force to be able to implement our business plan.

The Moto-Meter is in the verification build stage and the pre-production phase has been completed in Thailand. We anticipate expanding to Indonesia, and Vietnam during the second quarter of 2015 and in Brazil within the next 12 months. We will be outsourcing mass production for the Moto-Meter to a third party manufacturer in the coming weeks.

In conjunction with the opening of sales for the Moto Meter, we launched the App, which is a smartphone application. The App connects directly to the Moto-Meter™ via a secure Bluetooth connection, and can access data from the meter in real-time, giving users the ability to view ratings and a profile of the driver before getting on the bike.

As an element of mobile commerce, we have introduced “Yes,” a concierge service where persons can order products and have the products delivered to their address by motor scooter. The Yes service has been going through testing and was launched on March 9, 2015 in Bangkok, Thailand. We expect Yes to go live in in the third quarter of 2015 in Kuala Lumpur, Malaysia. We also intend to launch Yes™ over the next 12 months in Cambodia.

We have procured our first customer for Wheelies in Thailand. We are focused on the development of Wheelies as a unique advertising product, which displays static and streaming media on the wheels of motorcycles and automobiles, providing a new mobile medium for advertising, broadcasting, self-expression and publishing. We have successfully completed a pre-production version of Wheelies and have successfully completed testing. We are currently in negotiations for an exclusive advertising arrangement on the Wheelies product.

In Thailand, we entered into a distribution agreement with Lucky Distributors, Ltd. (“Lucky”). Under the terms of this distribution agreement, Lucky has the non-exclusive right to distribute, sell and service the Moto-Meter and Moto-Meter accessories throughout Thailand and the surrounding border markets. Lucky is a national distribution company based in Thailand. It is also a preferred supplier for the Motorcycle Taxi Association of Thailand. We believe Lucky’s reputation and relationship with the moto taxi community will help promote Moto-Meter in Thailand.

On October 30, 2013, we announced the signing of multiple letters of intent for the distribution of our flagship product, the Moto-Meter. To date, we signed letters of intent with qualified distributors in 7 countries. The distributors were selected for their ability to both sell and support our products as well as to protect our brand image in strategic markets. We are continuing discussions with dozens of further prominent distributors out of the hundreds of retail agents and operators that have contacted us expressing interest in the Moto-Meter and associated products. The letters of intent include authorizations to sell and support our flagship product, the Moto-Meter, as well as establishing priority for Wheelies and our other future products and services.

On December 2, 2013, World Moto Co. Thailand entered into a Purchase and Licensing Agreement (the “PL Agreement”) with Mobile Advertising Ventures Ltd. (“MAV”). Pursuant to the terms of the PL Agreement, MAV will purchase 10 initial “Wheelies” from World Moto Co. Thailand at a purchase price of $35,000, and will have an option to purchase an additional 190 Wheelies at a purchase price of $3,500 per unit. World Moto Co. Thailand also grants a non-exclusive license to MAV for the use of its software in connection with the operation of the Wheelies in consideration for a fee based on net revenue per quarter from advertising sales relating to the use of the Wheelies. This sale will be completed during 2015.

We entered into discussions to mandate the use of Moto-Meters on all moto taxis within the city of Montes Claros, Brazil. Montes Claros is considered the "motorcycle taxi capital" of northern Brazil and an ideal city to launch the Moto-Meter in Brazil. We anticipate that a regulatory mandate here will act as a springboard into the potentially larger markets of Brazil's other highly populated cities.

In Africa, we established an office in Lagos, Nigeria. Previously, the officials in Nigeria have expressed strong interest in the Moto-Meter, and feedback from our initial discussions has been positive. Establishing a physical presence in the city is now essential for us as we enter the process of formalizing these discussions into a clear plan to introduce the Moto-Meter into Lagos and cities across Africa. On November 4, 2013, we were awarded a patent on the Moto-Meter technology until 2033 in Nigeria, a country with more than 3 million motorcycle taxis.

We have assembled an optimal number of employees, including experienced engineers in our research and development division at the Thailand Science Park. The development focus is simultaneously devoted to our advertising product, Wheelies, as well as our flagship product, the Moto-Meter.

In parallel with this, we have completed the work to adapt the Moto-Meter electronics so that it can pass all current and anticipated regulatory requirements of INMETRO, the National Institute of Metrology for Brazil, as well as other international regulatory agencies.

Additional work is currently being undertaken to improve the weatherization technology used in the Moto-Meter to enhance its ability to withstand environmental stresses, as well as work to provide a more generic Moto-Meter installation kit and wiring harness that will allow its installation into a wider variety of vehicles, such as auto rickshaws.

We plan to use outside consultants and service companies from time to time for various tasks in the sales, development and manufacturing of our products and product launch and distribution, under provider contracts, to the extent that we are not able to perform the required functions. Using such outside vendors may make a particular task more expensive, but we believe that using such experts should improve the outcome or speed up the timing of product development and time to market. There is no assurance that we will be able to control the costs and deliveries of such activities in the same manner as if we were performing the tasks ourselves, and therefore we are subject to the usual risks of using outside providers.

Estimated Expenses

The following provides an overview of our estimated expenses to fund our plan of operations for each of our products over the next 12 months. Funding will be with our current cash assets and may include future capital that we may have to raise.

Moto-Meter

	Estimated
Description	Expenses

Engineering	$	15,000
Additional Prototyping and Mechanical Construction	$	5,000
Sales Training and Support	$	5,000
Production Tooling and NRE Charges	$	15,000
Development of Production Test Fixtures	$	7,000
Licensing and Certification	$	20,000
Components for Further Production	$	70,000
Training and Equipment	$	10,000

Total	$	147,000

Wheelies

	Estimated
Description	Expenses

Maintenance and Support	$	3,000

Total	$	3,000

Yes

	Estimated
Description	Expenses

Continued Development of Handset Application	$	15,000
Continued Development of Agent Handset Application	$	15,000
Establishment of Customer Service Center	$	2,000
Initial Awareness Campaign	$	3,000

Total	$	35,000

In order to execute on our plan of operations over the next 12 months, we will need to raise additional of working capital through debt or equity offerings. There are no assurances that we will be able to raise the required working capital on terms favorable, or that such working capital will be available on any terms when needed. Any failure to secure additional financing may force us to modify or delay our business plan.

Results of Operations

Comparison of three-month periods ended March 31, 2016 and 2015

Revenue

We have generated no revenues for the three month periods ended March 31, 2016 and 2015.

Expenses

General and administration expenses for the three-month period ended March 31, 2016, amounted to $90,712, compared to $99,249 during the three-month period ended March 31, 2015. The Company incurred more operating expense during 2016.

R&D expenses for the three-month period ended March 31, 2016, amounted to $54,159, compared to $102,825 during the three-month period ended March 31, 2015. The Company’s R&D department in Thailand was reduced to two employees therefore we incurred less R&D expense during 2016.

Other expense for the three-months period ended March 31, 2016 amounted to $149,693, compared to $675,907 during the three-month period ended March 31, 2015. The decrease is primarily due to the loss on the fair value of the derivatives and reduction in interest expense.

Net Loss

For the three-month period ended March 31, 2016, we incurred a net loss of $294,564, compared to a net loss of $877,981 for the three-month period ended March 31, 2015. The decrease is primarily due to the decrease in interest expense and loss on the fair value of the derivatives.

Liquidity and Capital Resources

As of March 31, 2016, we have $52,903 in current assets and $1,557,427 in current liabilities. Our total assets were $89,593 and our total liabilities were $1,848,503. We had $36,800 in cash and our working capital deficit was $1,467,834.

Cash Flows:

	For the three months ended
	March 31,
	2016			2015
Cash Flows from Operating Activities	$	(113,926	)	$	(192,516	)
Cash Flows from Investing Activities		-			-
Cash Flows from Financing Activities		136,389			137,023
Effects of Currency Translations		(435	)		(449	)
Net decrease in cash	$	22,028		$	(55,942	)

On January 11, 2016, the Company entered into a convertible notes with Union Capital for an aggregate principal amount of $31,639, to settle for the convertible note and accrued interest of the Vis Vires Note #1 dated July 10, 2015.

On January 11, 2016, the Company entered into another convertible note with Union Capital for an aggregate principal amount of $31,639 to settle for the convertible note and accrued interest of the Vis Vires Note #1 dated July 10, 2015.

On January 11, 2016, the Company entered into a third convertible note with Union Capital for an aggregate principal amount of $71,631 to settle for the convertible note and accrued interest of the Vis Vires Group #1 dated July 10, 2015.

The note earns an interest rate equal to 8% per annum and matures on January 11, 2017. The note is convertible at 60% of the lowest trading price of the Company’s common stock during the 20 trading days prior to the date of conversion. Due to this provision, the embedded conversion option qualified for derivative accounting under ASC 815-15, Derivatives and Hedging. Pursuant to this note, the Company recorded a debt discount of $67,800, as a result of the embedded conversion feature being a financial derivative. The Company determined that the fair value of the conversion feature was $67,800 at the issuance date. On the settlement date, the Company determined that the fair value of the conversion feature related to the Vis Vires note was $71,576.

On January 25, 2016, the Company entered into a convertible note with Union Capital for an aggregate principal amount of $25,963.

On January 25, 2016, the Company entered into a convertible note with Union Capital for an aggregate principal amount of $46,765 to settle for the convertible note and accrued interest of the Vis Vires Group dated July 27, 2015.

The note earns an interest rate equal to 8% per annum and matures on January 11, 2017. The note is convertible at 60% of the lowest trading price of the Company’s common stock during the 20 trading days prior to the date of conversion. Due to this provision, the embedded conversion option qualified for derivative accounting under ASC 815-15, Derivatives and Hedging. Pursuant to this note, the Company recorded a debt discount of $41,292, as a result of the embedded conversion feature being a financial derivative. The Company determined that the fair value of the conversion feature was $41,292 at the issuance date. On the settlement date, the Company determined that the fair value of the conversion feature related to the Vis Vires Group note was $38,880.

On February 1, 2016, the Company entered into a convertible note with Union Capital for an aggregate principal amount of $60,000.

On February 19, 2016, the Company entered into a convertible note with GW Holding Group Note #1 for an aggregate principal amount of $38,000.

On March 30, 2016, the Company entered into a convertible note with GW Holding Group Note #2 for an aggregate principal amount of $30,000.

On March 30, 2016, the Company entered into a convertible note with Union Capital Backend Note #14 for an aggregate principal amount of $66,750. As of March 30, 2016, the Company received total of $35,000 for the note.

Given our cash position of $36,800 as of March 31, 2016, and the proceeds from the equity financings, management believes that our cash on hand and working capital are not sufficient to meet our current anticipated cash requirements.

We have incurred an accumulated loss of $6,529,689 since inception. Our independent auditors have issued an audit opinion for our financial statements for the periods ended December 31, 2015 and 2014, which includes a statement expressing substantial doubt as to our ability to continue as a going concern due to our limited liquidity and our lack of revenues.

Our current cash requirements are not insignificant due to planned development and marketing of our current products, and we anticipate generating losses. While obtaining $280,000 will allow us to execute on our business strategy over the next 12 months, commensurate with the goals for our planned marketing and sales, public relations, development and distribution efforts, we are actually targeting an additional $70,000 over the next 12 months in additional working capital in order to increase our growth plans on an expedited basis.

Our management believes that we should be able to raise sufficient amounts of working capital through debt or equity offerings, as may be required to meet our short-term obligations. However, the incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Additionally, our ability to raise additional capital may be limited due to the grant of a security interest on all of the assets of the Company to secure the obligations under the convertible debentures issued on January 25, 2016, February 1, 2016, February 16, 2016 and the convertible debentures issued on March 30, 2016. Changes in our operating plans, increased expenses, acquisitions, or other events, may cause us to seek additional equity or debt financing in the future. We anticipate continued and additional marketing, development and distribution expenses. Accordingly, we expect to continue to use debt and equity financing to fund operations for the next twelve months, as we look to expand our asset base and fund marketing, development and distribution of our products.

There are no assurances that we will be able to raise the required working capital on terms favorable, or that such working capital will be available on any terms when needed. Any failure to secure additional financing may force us to modify our business plan. In addition, we cannot be assured of profitability in the future.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with generally accepted accounting principles of the United States (GAAP) 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 year. The more significant areas requiring the use of estimates include asset impairment, stock-based compensation, and future income tax amounts. Management bases its estimates on historical experience and on other assumptions considered to be reasonable under the circumstances. However, actual results may differ from the estimates.

We believe the following is among the most critical accounting policies that impact or consolidated financial statement. We suggest that our significant accounting policies, as described in our financial statements in the Summary of Significant Accounting Policies, be read in conjunction with this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Foreign Currency Translation

Adjustments resulting from the translation, if any, are included in accumulated other comprehensive income (loss) in stockholder’s equity (deficit).

Revenue Recognition

The Company recognizes revenue only when all of the following criteria have been met:

•	Persuasive evidence of an arrangement exists;
•	Delivery has occurred or services have been rendered;
•	The fee for the arrangement is fixed or determinable; and
•	Collectibility is reasonably assured.

Persuasive Evidence of an Arrangement - The Company documents all terms of an arrangement in a written contract signed by the customer prior to recognizing revenue.

Delivery Has Occurred or Services Have Been Performed - The Company performs all services or delivers all products prior to recognizing revenue. Monthly services are considered to be performed ratably over the term of the arrangement. Professional consulting services are considered to be performed when the services are complete. Equipment is considered delivered upon delivery to a customer’s designated location.

The Fee for the Arrangement Is Fixed or Determinable - Prior to recognizing revenue, a customer’s fee is either fixed or determinable under the terms of the written contract. Fees for most monthly services, professional consulting services, and equipment sales and rentals are fixed under the terms of the written contract. Fees for certain monthly services, including certain portions of networking, storage, and content distribution and caching services, are variable based on an objectively determinable factor such as usage. Those factors are included in the written contract such that the customer’s fee is determinable. The customer’s fee is negotiated at the outset of the arrangement and is not subject to refund or adjustment during the initial term of the arrangement.

Collectability Is Reasonably Assured - The Company determines that collectability is reasonably assured prior to recognizing revenue. Collectability is assessed on a customer by customer basis based on criteria outlined by management. New customers are subject to a credit review process, which evaluates the customer’s financial position and ultimately its ability to pay. The Company does not enter into arrangements unless collectability is reasonably assured at the outset. Existing customers are subject to ongoing credit evaluations based on payment history and other factors. If it is determined during the arrangement that collectability is not reasonably assured, revenue is recognized on a cash basis.

Franchise Fee Revenue

Revenues from licensees include a royalty based on a percent of sales, and may include initial fees. Continuing royalties are recognized in the period earned. Initial fees are recognized upon granting of a new franchise term, which is when the Company has performed substantially all initial services required by the franchise arrangement. Additionally, the first twelve months of operations are royalty free for the franchisee.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported, within the time period specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer (our principal executive officer) and our Chief Financial Officer (our principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure.

As of the quarterly period ended March 31, 2016, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and our principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were not effective as of the quarterly period ended March 31, 2016 in ensuring that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s (the “SEC”) rules and forms. This conclusion is based on findings that constituted material weaknesses. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s interim financial statements will not be prevented or detected on a timely basis.

In performing the above-referenced assessment, our management identified the following material weaknesses:

We have insufficient quantity of dedicated resources and experienced personnel involved in reviewing and designing internal controls. As a result, a material misstatement of the interim and annual financial statements could occur and not be prevented or detected on a timely basis.

	ii)	We do not have an audit committee. While not being legally obligated to have an audit committee, it is the management’s view that to have an audit committee, comprised of independent board members, is an important entity-level control over our financial statements.

	iii)	We did not perform an entity level risk assessment to evaluate the implication of relevant risks on financial reporting, including the impact of potential fraud-related risks and the risks related to non-routine transactions, if any, on our internal control over financial reporting. Lack of an entity-level risk assessment constituted an internal control design deficiency which resulted in more than a remote likelihood that a material error would not have been prevented or detected, and constituted a material weakness.

Limitations on the Effectiveness of Controls

Our management, including our Chief Executive Officer and a functioning Chief Financial Officer, does not expect that our disclosure controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management or board override of the control.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Changes in Internal Controls Over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during the quarterly period ended March 31, 2016 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors.

Not applicable.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On January 11, 2016, the Company entered into a third convertible note with Union Capital for an aggregate principal amount of $71,639 to settle for the convertible note and accrued interest of the Vis Vires Group #1 dated July 2015.

On January 25, 2016, the Company entered into a convertible note with Union Capital for an aggregate principal amount of $25,963.

On February 1, 2016, the Company entered into a convertible note with Union Capital for an aggregate principal amount of $60,000.

On February 19, 2016, the Company entered into a convertible note with GW Holding Group Note #1 for an aggregate principal amount of $38,000.

On March 30, 2016, the Company entered into a convertible note with GW Holding Group Note #2 for an aggregate principal amount of $30,000.

On March 30, 2016, the Company entered into a convertible note with Union Capital Backend Note #14 for an aggregate principal amount of $66,750.

These issuances of the convertible promissory notes were exempt from the registration requirements of the Securities Act pursuant to the exemption for transactions by an issuer not involved in any public offering under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits.

Exhibit	Description
No.
3.1	Articles of Incorporation (incorporated by reference to our Annual Report on Form 10-K filed on April 16, 2015).
3.2	By-laws (incorporated by reference to our Registration Statement on Form S-1, as filed with the SEC on June 25, 2010).
31.1*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101 *	Interactive Data Files

* Filed herewith.

SIGNATURES

Pursuant to the requirements 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.

	WORLD MOTO, INC.

Dated: February 21, 2017	By:	/s/ Paul Giles
		Paul Giles
		Chief Executive Officer (Principal Executive Officer)

Dated: February 21, 2017	By:	/s/ Chris Ziomkowski
		Chris Ziomkowski
		Treasurer (Principal Financial Officer and Principal
		Accounting Officer)

World Moto, Inc. 10-Q