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WORLD MOTO, INC. - 10-Q - Management's Discussion and Analysis of Financial Condition and Results of Operations.

August 19, 2014

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 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.

We are 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.

The Moto-Meter is in the verification build stage and has been initially introduced to motorcycle taxi-operators in Thailand, and we anticipate expanding to Indonesia, Vietnam by the end of the third quarter of 2014 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.

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 is now being launched with our first customer, Mobile Advertising Ventures, Ltd. in Kuala Lumpur, Malaysia. We expect Yes to go live in in the third quarter of 2014 in Kuala Lumpur, Malaysia. We also intend to launch Yes™ over the next 12 months in Thailand and 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 anticipate the limited production and optimization stage for Wheelies to last approximately 6 months, after which full commercial production will commence by the fourth quarter of 2014 in Thailand.

As of June 30, 2014, WM Co.Thailand had 12 employees.

Results of Operations

Comparison of three-month periods ended June 30, 2014 and 2013 and the six-month periods ended June 30,2014 and 2013

Revenue

We have generated no revenues for the three months and six months ended June 30, 2014, and for the three months and six months ended June 30, 2013.

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Net Loss

For the three-month period ended June 30, 2014, we incurred a net loss of $503,663 compared to a net loss of $196,270 for the three-month period ended June 30, 2013. For the six-month period ended June 30, 2014, we incurred a net loss of $773,678 compared to a net loss of $399,875 for the six-month period ended June 30, 2013.

Expenses

General and administration expenses for the three-month period ended June 30, 2014, amounted to $243,596 compared to $196,543 during the three-month period ended June 30, 2013. General and administration expenses for the six-month period ended June 30, 2014, amounted to $392,371 compared to $404,421 during the six-month period ended June 30, 2013.

R&D expenses for the three-month period ended June 30, 2014 amounted to $126,590 compared to $0 during the three-month period ended June 30, 2013. R&D expenses for the six-month period ended June 30, 2014 amounted to $247,696 compared to $0 during the six-month period ended June 30, 2013.

The increase in expenses is due to growth of the Company in Thailand, continued R&D associated with our products and ongoing legal expenses for items such as patent acquisition in various countries.


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Source: Edgar Glimpses


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