Leo Motors (LEOM) 10-Q 2015 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2015

or

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

For the transition period from                                                                ______________ to ________________

Commission file number 000-53525

Leo Motors, Inc.

(Exact name of registrant as specified in its charter)

Nevada	95-3909667
(State or other jurisdiction of incorporation or organization)	(I. R. S. Employer Identification No.)

3F Bokwang Bldg., Seowoon-ro 6 Gil 14, Seocho-Gu, Seoul, Republic of Korea	137-863
(Address of principal executive offices)	(Zip Code)

+83 70 4699 3585

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

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

Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  o	Accelerated filer  o
Non-accelerated filer  o  (Do not check if a smaller reporting company)	Smaller reporting company  x

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

The number of shares of the registrant’s common stock outstanding as of November 13, 2015 was 158,182,569 shares.

 Item 1.                      Financial Statements.

LEO MOTORS, INC.
CONSOLIDATED BALANCE SHEETS
(AMOUNTS EXPRESSED IN US DOLLAR)
	Balance at
	9/30/2015				12/31/2014
	(Unaudited)				(Unaudited)
Assets
Current Assets
Cash and cash equivalents		$	192,845			$	217,178
Accounts receivable			1,694,189				542,210
Inventories			758,952				279,783
Prepayment to suppliers			714,579				306,969
Other current assets			473,381				49,705
Total Current Assets			3,833,946				1,395,845
Fixed assets, net			183,865				38,620
Deposit			346,559				51,601
Intangible assets			63,831				63,831
Goodwill			3,057,003				2,444,558
Total Assets		$	7,485,204			$	3,994,455
Liabilities and Equity(Deficit)
Current Liabilities:
Accounts payable and accrued expenses		$	2,510,921			$	2,152,951
Short term borrowings			876,009				448,801
Advance from customers			48,409				40,951
Due to related parties			7,626				150,637
Taxes payable			217,322				159,478
Notes Payable current portion			469,999				526,257
Derivative liability			0				819,922
Total Current Liabilities			4,130,286				4,298,997
Accrued retirement benefits			2,171				2,150
Notes Payable Long Term			0				145,316
Total Liabilities			4,132,457				4,446,463
Commitments (Note 8)			-				-
Leo Motors, Inc.("LEOM") Equity(Deficit):
Common stock ($0.001 par value; 220,000,000 shares authorized); 158,182,569  and 138,624,206 shares issued and outstanding at September 30,  2015 and December 31, 2014			158,183				138,624
Additional paid-in capital			22,967,300				17,723,248
Accumulated other comprehensive income			797,840				511,229
Accumulated loss			(23,313,267	)			(21,357,211	)
Total Equity(Deficit) Leo Motors, Inc.			610,056				(2,984,110	)
Non-controlling interest			2,742,691				2,532,102
Total Equity(Deficit)			3,352,747				(452,008	)
Total Liabilities and Equity(Deficit)		$	7,485,204			$	3,994,455
"See accompanying notes to consolidated financial statements"

LEO MOTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS EXPRESSED IN US DOLLAR)
	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2015			2014			2015			2014
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenues	$	922,326		$	28,813		$	2,331,294		$	28,813
Cost of Revenues		414,240			20,521			1,027,969			20,521
Gross Profit		508,086			8,292			1,303,325			8,292
Operating Expenses		956,180			341,530			3,138,024			1,840,040
Income(loss) from Continuing Operations		(448,094	)		(333,238	)		(1,834,699	)		(1,831,748	)
Other Income (Expenses)
Interest expense		(3,031	)		(131,410	)		(313,332	)		(189,707	)
Non-Operating (expense) income		38,636			(9,716	)		41,553			(9,716	)
Total Other Income (Expenses)		35,605			(141,126	)		(271,779	)		(199,423	)
Income(loss) from Continuing Operations Before Income Taxes		(412,489	)		(474,364	)		(2,106,478	)		(2,031,171	)
Income Tax Expense		0			0			0			0
Net Income(Loss)	$	(412,489	)	$	(474,364	)	$	(2,106,478	)	$	(2,031,171	)
Income(loss) attributable to non-controlling interest	$	(55,017	)	$	(26,869	)	$	(150,422	)	$	(134,605	)
Net Income(Loss) Attributable To Leo Motors, Inc.		(357,472	)		(447,495	)		(1,956,056	)		(1,896,566	)
Other Comprehensive Income:
Net Income(loss)	$	(412,489	)	$	(474,364	)	$	(2,106,478	)	$	(2,031,171	)
Unrealized foreign currency translation gain		29,447			(26,930	)		286,611			(22,424	)
Comprehensive Income(loss) Attributable to Leo Motors, Inc.	$	(383,042	)	$	(501,294	)	$	(1,819,867	)	$	(2,053,595	)
Net Loss per Common Share:
Basic	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.02	)
Diluted	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.02	)
Weighted Average Common Shares Outstanding:
Basic	$	158,163,934		$	136,627,984		$	154,950,420		$	97,393,209
Diluted	$	158,163,934		$	137,290,873		$	154,950,420		$	98,056,098
"See accompanying notes to consolidated financial statements"

LEO MOTORS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS EXPRESSED IN US DOLLAR)
	For the Nine Months Ended September 30,
	2015			2014
	(Unaudited)			(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(2,106,478	)	$	(2,031,171	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization		186,973			12,344
Loss on conversion of debt		0			24,376
Amortization debt discount		275,176			65,392
Foreign currency translation		286,611			24,660
Stock-based compensation		488,046			1,395,854
Changes in assets and liabilities:
Accounts Receivable		(1,151,979	)		0
Inventories		(479,169	)		0
Prepayment to suppliers		(407,610	)		0
Other assets		(423,676	)		11,169
Accounts payable, other payables and accrued expenses		357,970			365,658
Accrued retirement benefits		21			(38,297	)
Advances from customers		7,458			9,471
Taxes payable		57,844			5,378
Net cash used in operating activities:		(2,908,813	)		(155,166	)
Cash flows from investing activities:
Investment in equipment		(303,572	)		(16,846	)
Payments on deposits		(294,958	)		0
Net cash provided(used) in investing activities:		(598,530	)		(16,846	)
Cash flows from financing activities:
Proceeds from notes payable		427,208			145,316
Proceeds from related party debt		0			25,899
Payments on related party debt		(56,258	)		0
Payments on notes payable		(505,977	)		0
Proceeds from issuance of stock & warrants		3,618,037			503,637
Net cash provided(used) by financing activities:		3,483,010			674,852
NET DECREASE IN CASH AND CASH EQUIVALENTS		(24,333	)		502,840
Cash and cash equivalents - beginning of year		217,178			1,774
Cash and cash equivalents - end of year	$	192,845		$	504,614
Supplemental disclosure of cash flow activities:
Interest	$	0		$	0
Income taxes	$	0		$	0
Supplemental disclosures of non cash activities:
Conversion of derivative liability	$	819,922		$	0
Goodwill on acquisition	$	612,445		$	0
Conversion of debt for common stock	$	1,901,433		$	98,496
Common stock issued for services	$	488,046		$	1,395,854
Common stock issued for investments	$	0		$	2,254,999
"See accompanying notes to consolidated financial statements"

NOTE 1 - COMPANY BACKGROUND

Leo Motors, Inc. (the “Company,” or “we”) is currently in development, assembly and sales of the energy storage devices and electric vehicle components.

The Company was originally incorporated in California as N. Org., Inc. on December 12, 1983. The Company then underwent several name changes from Natural Organics Corporation to Classic Auto Accessories of North America and then to FCR Automotive Group, Inc. On September 20, 2004, the Company reincorporated  in  Delaware by merging into FCR Automotive Group,Inc.,  a  Delaware  corporation,  which  was  organized  on  September  8, 2004. On July  26,  2005,  the  Company acquired Shinil Precision Co., Ltd., a Korean Company,  as  its  operating  business  and on July 18, 2005, changed its name to Shinil  Precision Machinery, Inc. to reflect its anticipated new business.  Uponfailure  of  certain  terms  and  conditions  of  the acquisition agreement, the Company  returned the shares of Shinil and recovered and cancelled the Company's shares  issued  in  the  acquisition. In 2012, the Company changed its domicile to Nevada.

The Company had been dormant since 1989, and consummated a reverse merger on November 12, 2007 with Leozone Inc., a South Korean company, which is the maker of electrical transportation devices. The merger essentially exchanges shares in Leo Motors, Inc. for shares in Leozone. As this is a reverse merger the accounting treatment of such is that of a combination of the two entities with the activity of Leozone, Inc. the surviving entity, going forward. The financial statements reflect the activity for all periods presented as if the merger had occurred January 1, 2007. Leozone has continued to operate as a separate subsidiary Leo Motors Co. Ltd. of Korea since that time.

On February 11, 2010, the Company acquired 50% of Leo B&T Corp., a South Korean corporation (“B&T”), from two shareholders of B&T in exchange for 7,000,000 shares of the Company’s common stock. Our ownership in B&T was reduced to 30% in 2011. Additionally, this investment was written down as an impairment expense during 2011 and the remaining investment was exchanged in 2012 for a return of Leo Motors stock.

On November 10, 2012, the Company signed an agreement with PDI C&D/RDC SPRL Inc. ("PDI"), an affiliate of PDI Global LLC, a major architectural design company in the U.S., to supply an independent solar power system grafted with the Company’s E-Box power storage device for a housing project in the Democratic Republic of the Congo ("DRC"). The Company will have a 10% interest in the overall project. This project has incurred an impairment charge as details in these footnotes.

On July 1, 2014, the Company acquired all of the outstanding common stock of LGM Co. Ltd., a corporation incorporated in the Republic of Korea (“LGM”), from LGM’s shareholders, which represents 813,747 shares of LGM common stock, in exchange for 47,352,450 shares of the Company's common stock pursuant to the Share Swap Agreement entered into by and between LGM and the Company. Upon closing of the Share Swap Agreement, LGM became a wholly-owned subsidiary of the Company.

On March 31, 2015, the Company acquired 50% interest in each of Leo Motors Factory, Inc. (“Leo Factory 1”) and Leo Motors Factory 2, Inc. (“Leo Factory 2”)which are auto repair shops that specialize in repairing hand-made luxury cars such as Ferrari, Lamborghini, Bentley, Porsche, and Rolls Royce. The Company also acquired 50% interest in Leo Trading Inc.(formerly Erum Motors, Inc.) (“Leo Trade”) specializing in the trading of luxury cars. These acquired entities will be presented on a consolidated basis as the parent company has significant control of the business through the Board of Directors which can decide decisions split on strictly on common share ownership percentages.

POLICIES

This summary of significant account policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and the notes are the representation of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to U.S. generally accepted accounting principles (“USGAAP”) and have been consistently applied in the preparation of the financial statements.

Basis of Presentation and Consolidation

These financial statements and related notes are expressed in US dollars. The Company’s fiscal year-end is December 31. The consolidated financial statements include the financial statements of the Leo Motors Co. Ltd. Korea and LGM Co. LTD where the Parent Company has significant control. All inter-company transactions and balances 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 reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Fair Value of Financial Instruments

For certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable inventory and prepaid expenses, accounts payable and deferred revenues, the carrying amounts approximate fair value due to their short maturities.

Revenue Recognition

The Company follows the guidance of the Securities and Exchange Commission’s Staff Accounting Bulletin No. 104, “Revenue Recognition in Financial Statements”. In general, the Company records revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The following policies reflect specific criteria for the various revenues streams of the Company.

The Company generates revenue from the delivery of goods and records revenues when the sales are completed, already collected or collectability is reasonably assured, there is no future obligation and there is remote chance of future claim or refund to the customers.

 Revenue is recognized when risk of ownership and title pass to the buyer, generally upon the delivery of professional services. Pricing is fixed and determinable according to the Company’s published brochures and price lists.

Accounts Receivables

Accounts receivables of the Company are reviewed to determine if their carrying value has become impaired.

The Company considers the assets to be impaired if the balances are greater than one-year old. Management regularly reviews accounts receivable and will establish an allowance for potentially uncollectible amounts when appropriate. When accounts are written off, they will be charged against the allowance.

Receivables are not collateralized and do not bear interest.

Cash Equivalents

For purposes of reporting cash flows, the Company considers all short-term investments with an original maturity of three months or less to be cash equivalent.

Fixed Assets

Fixed assets are stated at cost, less accumulated depreciation. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which is generally 3 to 10 years. The cost of repairs and maintenance is charged to expense as incurred. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income (expense).

The Company will periodically evaluate whether events and circumstances have occurred that may warrant revision of the estimated useful lives of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. We use an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability.

Intangible and Long Lived Assets

The Company follows ASC 360-10, “Property, Plant, and Equipment,” which established a “primary asset” approach to determine the cash flow estimation period for a group of assets and liabilities that represents the unit of accounting for a long-lived asset to be held and used. Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell. Through September 30, 2015, the Company had not experienced impairment losses on its long-lived assets.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes in accordance with ASC 740-10, “Accounting for Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year; and, (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if, based on the weight of available positive and negative evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

ASC 740-10 prescribes a recognition threshold and measurement attribute for the financial statement recognition of a tax position taken or expected to be taken on a tax return. Under ASC 740-10, a tax benefit from an uncertain tax position taken or expected to be taken may be recognized only if it is “more likely than not” that the position is sustainable upon examination, based on its technical merits. The tax benefit of a qualifying position under ASC 740-10 would equal the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority having full knowledge of all the relevant information. A liability (including interest and penalties, if applicable) is established to the extent a current benefit has been recognized on a tax return for matters that are considered contingent upon the outcome of an uncertain tax position. Related interest and penalties, if any, are included as components of income tax expense and income taxes payable.

Loss per Share

Basic earnings (loss) per share is computed by dividing net income, or loss, by the weighted average number of shares of common stock outstanding for the period. Diluted earnings (loss) per share is computed by dividing net income, or loss, by the weighted average number of shares of both common and preferred stock outstanding for the period.

Stock-Based Compensation

SFAS No. 123, “Accounting for Stock-Based Compensation,” establishes and encourages the use of the fair value based method of accounting for stock-based compensation arrangements under which compensation cost is determined using the fair value of stock-based compensation determined as of the date of grant and is recognized over the periods in which the related services are rendered. For stock based compensation the Company recognizes an expense in accordance with SFAS No. 123 and values the equity securities based on the fair value of the security on the date of grant. Stock option awards are valued using the Black-Scholes option-pricing model.

Foreign Currency Translation And Comprehensive Income

The reporting currency of the Company is the US$. The functional currency of the parent company is the US$ and the functional currency of the Company’s operating subsidiary is Korean Won (“KRW”). The subsidiary’s results of operations and cash flows are translated at average exchange rates during the year, assets and liabilities are translated at the unified exchange rate at the end of the year, and equity is translated at historical exchange rates. Translation adjustments resulting from the process of translating the functional currency financial statements into US$ are included in determining comprehensive income. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. The Company does not enter any material transaction in foreign currencies and accordingly, transaction gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company.

Recent Accounting Pronouncements

The Company continually assesses any new accounting pronouncements to determine their applicability to the Company. Where it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s financials properly reflect the change. The Company currently does not have any recent accounting pronouncements that they are studying and feel may be applicable.

NOTE 3 - EARNINGS PER SHARE

The Company reports basic and diluted earnings per share (EPS) according to the provisions of ASC Topic 260, which requires the presentation of basic EPS and, for companies with complex capital structures, diluted EPS. Basic EPS excludes dilution and is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income (loss) available to common stockholders, adjusted by other changes in income or loss that would result from the assumed conversion of those potential common shares, by the weighted number of common shares and common share equivalents (unless their effect is antidilutive) outstanding. Common stock equivalents are not included in the computation of diluted earnings per share when the Company reports a loss because to do so would be antidilutive. Thus, these equivalents are not included in the calculation of diluted loss per share, resulting in basic and diluted loss per share being equal. The following is a reconciliation of the computation for basic and diluted EPS for the nine months ended September 30, 2015 and 2014:

	For the periods ended
	9/30/2015			9/30/2014
Net Income (Loss)	$	(2,106,478	)	$	(2,031,171	)
Weighted-average common stock Outstanding -  basic		154,950,420			97,393,209
Equivalents
Stock options		-			0
Warrants		-			0
Convertible Notes		0			662,889
Weighted-average common shares
outstanding-  Diluted		154,950,420			98,056,098

NOTE 4 - DUE TO RELATED PARTY

The company is indebted to its officer for advances. Repayment is on demand without interest. The balance was $7,626 at September 30, 2015 and $150,637 at December 31, 2014.

NOTE 5 - PAYMENTS RECEIVED IN ADVANCE

The Company during the periods received payments from potential customers, or deposits, on future orders. The Company’s policy is to record these payments as a liability until the product is completed and shipped to the customer at which the Company recognizes revenue. As of September 30, 2015 and December 31, 2014, the balance of payments received in advance was $714,579 and $ 306,969, respectively.

NOTE 6 - GOING CONCERN

As reported in the consolidated financial statements, the Company has accumulated deficits of $23,313,267 as of September 30, 2015 and its current liabilities exceeded its current assets. These negative trends have been consistent over the last few years except for asset sales.

These factors  create  uncertainty  about  the  Company's  ability  to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable and to create operations that contribute capital from normal operations. If the Company cannot obtain  adequate  capital  it  could  be  forced  to  cease operations.

In order to continue as a going concern, develop and generate revenues and achieve a  profitable  level of operations, the Company will need, among other things, additional capital resources. Management's plans to obtain such resources for the  Company  include  (1) raising additional capital through sales of common stock, (2) converting  promissory notes into  common  stock  and (3) entering into acquisition agreements  with profitable  entities  with   significant   operations.   In   addition, management is continually seeking to streamline its operations and expand the business through a variety of industries, including real estate and financial management.

However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations.  The accompanying   consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 7 - COMMITMENTS AND CONTINGENCIES

(a) Lease Commitments

The Company leases its office space in Ha-Nam City in Korea which expires on December 31, 2016. The minimum obligations under such commitments for the years ending December 31, 2015 through December 31, 2017 are listed on the table below.

For the Year	Amount
Ending
2015		10,000
2016		30,000
2017		0
Total Commitment	$	40,000

(b) Strategic Investment

On November 10, 2012, the Company and PDI C&D/RDC SPRL Inc. ("PDI"), an affiliate of PDI Global LLC, a major architectural design company in the U.S., signed a contract to supply an independent solar power system grafted with the Company’s E-Box power storage device for a housing project in the Democratic Republic of the Congo ("DRC"). The Company had a commitment to raise $1,000,000 to fulfill its part of the contract for strategic investment. This investment was impaired in full as of December 31, 2014 as completion of the project looks doubtful.

NOTE 8 - INVENTORIES

Inventories consist of the following:

	September 30, 2015		December 31, 2014
	US$		US$
Raw material	$	0	$	0
Work in process		758,952		279,783
Finished goods		0		0
	$	758,952	$	279,783

NOTE 9 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	September 30, 2015			December 31, 2014
Vehicles	$	146,268		$	7,581
Tools		95,771			12,906
Office		109,447			79,963
Facility equipment		210,502			157,966
Total property and equipment		561,988			258,416
Accumulated depreciation		(378,123	)		(219,796	)
Property and equipment, net	$	183,865		$	38,620

Depreciation expense for the three months ended September 30, 2015 and 2014 amounted to $20,864 and $12,344,  respectively.

NOTE 10 - INVESTMENTS

During 2012, the Company invested in a housing project in the Republic of the Congo which would use our E-Box power storage device. $270,000 had been invested. This 10% ownership interest has been recorded using the cost investment of accounting for investments. During the year ended December 31, 2014, the completion of this project has come into question. Due to this and other factors the Company has impaired the investments in full with a charge off of $762,000.v

NOTE 11 - SHORT TERM BORROWINGS AND NOTES PAYABLE

The Company continues to fund itself through borrowing and equity sales until sales return to historical levels.

At December 31, 2014, the Company had short term borrowings of $448,801. The notes are short term working capital advances that have been advanced to their Korean Subsidiary from various local parties. These advances are due on demand, interest free and unsecured.

Additionally the Company borrowed $819,922 in short term convertible notes at a 4% interest rate. These funds were used to fund expansion of our LGM acquisition in 2014. The derivative components are detailed in footnote 15 and these loans were completely converted in February 2015 into 14,924,263 shares of our common stock.

NOTE 12 - INCOME TAXES

The Company has experienced losses during most years since its inception. As a result, it has incurred no Federal income tax. The Internal Revenue Code allows net operating losses (NOL’s) to be carried forward and applied against future profits for a period of twenty years; an NOL of approximately $23,350,000 had accumulated at September 30, 2015 on U.S. operations and has been carried forward. The potential tax benefit of the NOL’s has been recognized on the books of the Company, but offset by a valuation allowance.

Under current accounting guidance, recognition of deferred tax assets is permitted unless it is more likely than not that the assets will not be realized. The Company has recorded deferred tax assets using statutory rates, as presented below. The valuation reserve increased by $665,059 during the nine months ended September 30, 2015.

	Total
Deferred Tax Assets	$	7,926,511
Realization Allowance		(7,926,511	)
Balance Recognized	$	-

The effective tax rate is as follows:

Statutory Federal Rate	34	%
Effect of Valuation Allowance	(34	%)
Effective Rate	0	%

NOTE 13 - INTANGIBLE ASSETS

The Company accounts for its long-lived assets in accordance with Accounting Standards Codification (“ASC”) Topic 360-10-05, “Accounting for the Impairment or Disposal of Long-Lived Assets.”  ASC Topic 360-10-05 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate.  The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition.  If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value.  The Company increased goodwill as a result of its first quarter acquisitions by $612,445 and also determined that none of its long-term assets at September 30, 2015 and December 31, 2014 were impaired.

	30-Sep-15		31-Dec-14
Patents	$	63,554	$	63,554
Trademarks		277		277
Goodwill		3,057,003		2,444,558
Intangible assets		3,120,834		2,508,389
Less impairments		0		0
Intangible assets, net	$	3,120,834	$	2,508,389

NOTE 14 -  SEGMENT INFORMATION

ASC Topic 280 requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. During the nine months ended September 30, 2015 and 2014, the Company operated in one reportable business segment: the sale and manufacture of specialized electric vehicle. The Company's reportable segment is a strategic business unit that offers its product.

NOTE 15 – DERIVATIVE LIABILITY

The Company accounts for derivative financial instruments in accordance with ASC 815, which requires that all derivative financial instruments be recorded in the balance sheets either as assets or liabilities at fair value.

The Company’s derivative liability is an embedded derivative associated with one of the Company’s convertible promissory notes. The convertible promissory note was issued on July 31, 2014, (the "Note"), is a hybrid instruments which contain an embedded derivative feature which would individually warrant separate accounting as a derivative instrument under Paragraph 815-10-05-4.  The embedded derivative feature includes the conversion feature to the Note. Pursuant to Paragraph 815-10-05-4, the value of the embedded derivative liability have been bifurcated from the debt host contract and recorded as a derivative liability resulting in a reduction of the initial carrying amount (as unamortized discount) of the notes, which are amortized as debt discount to be presented in other (income) expenses in the statements of operations using the effective interest method over the life of the notes.

The embedded derivative within the note have been valued using the Black Scholes approach, recorded at fair value at the date of issuance; and marked-to-market at each reporting period end date with changes in fair value recorded in the Company’s statements of operations as “change in the fair value of derivative instrument”.

As of September 30, 2015 and December 31, 2014, the estimated fair value of derivative liability was determined to be $0 and $819,922, respectively. On July 31, 2014, the derivative liability was recognized with a debt discount of $825,529. During the nine months ended September 30, 2015, the loan was converted to common stock and the remaining unamortized debt discount of $275,176 was recorded against as a charge to interest expense.

Summary of Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis

Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed on the balance sheet:

		Fair Value Measurement Using
Carrying Value		Level 1			Level 2			Level 3		Total
	-0-			-			-		-0-			-0-
$	-0-		$	-		$	-	$	-0-		$	-0-

Summary of the Changes in Fair Value of Level 3 Financial Liabilities

The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the nine months ended September 30, 2015:

	Derivative Liability
Fair value, December 31, 2014		$	819,922
Additions			-0-
Change in fair value			-0-
Transfers in and/or out of Level 3			(819,922)
Fair value, September 30, 2015		$	-0-

NOTE 16 - ACQUISITIONS

On March 29, 2015, the Company acquired a 50% interest in each of Leo Motors Factory 1 and 2 which are auto repair shops that specialize in repairing hand-made luxury cars such as Ferrari, Lamborghini, Bentley, Porsche, and Rolls Royce. The Company also acquired a 50% interest in Leo Trade specializing in trading luxury cars.  The consolidation of these acquisitions is presented below.

Leo Motors consolidation	LEO Motors				LEO Motors			LGM			LEO Motors			LEO Motors			LEO Trade			ELIM			Consolidated
March 31, 2015	US				Korea						Factory 1			Factory 2			(f/k/a/ Erum)			ENTRIES			Statements
All numbers shown in US Dollars																				DR(CR)			3/31/2015
ASSETS
Cash and cash equivalents		$	374			67853			211,957			91,187			2914			92173			0			466,458
Accounts receivable			0			0			476,777			8,754			48,425			418,422			0			952,378
Inventories			0			0			295,159			0			0			0			0			295,159
Prepayment to suppliers			0			137,236			160,484			0			0			0			0			297,720
Other current assets			0			7,297			57,403			1,595			125,212			36,685			0			228,192
Total Current Assets			374			212,386			1,201,780			101,536			176,551			547,280						2,239,907
Fixed assets, net			6,744			10,530			16,846			63,683			88,181			0			0			185,984
Deposit			0			46,234			22,637			4,804			145,196			9,025			0			227,896
Intangible assets			0			63,831			0			0			0			0			0			63,831
Goodwill			0			0			0			0			0			0			3,057,003			3,057,003
Investment in subsidiaries			8,089,368			0			0			0			0			0			-8,089,368			0
Total Non-Current Assets			8,096,112			120,595			39,483			68,487			233,377			9,025						3,534,714
Total Assets		$	8,096,486			332,981			1,241,263			170,023			409,928			556,305			-5,032,365			5,774,621
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses		$	1,139,889			1,060,342			291,900			97,840			307,112			416,183			0			3,313,266
Short term borrowings			0			256,392			183,245			32,052			0			0			0			471,689
Advance from customers			0			30,381			9,141			0			4,513			0			0			44,035
Due to related parties			0			116,617			0			0			0			0			0			116,617
Taxes payable			0			137,780			10,673			13,559			78,783			226			0			241,021
Notes Payable current portion			0			0			0			0			0			353,747			0			353,747
Total Current Liabilities			1,139,889			1,601,512			494,959			143,451			390,408			770,156						4,540,375
Long Term Notes			0			36,698			117,075			0			173,928			0			0			327,701
Accrued severance benefits			0			2,075			0			0			0			0			0			2,075
Total Liabilities			1,139,889			1,640,285			612,034			143,451			564,336			770,156						4,870,151
Stockholders' Equity:
Common stock			154,144			2,831,276			284,870			90,253			135,379			180,505			(3,522,283	)		154,144
Additional paid-in capital			21,253,084			1,831,184			1,285,902			0			0			0			(4,973,230	)		19,396,940
Accumulated other comprehensive income			277,678			225,403			4,893			0			0			0			0			507,974
Accumulated loss			(14,728,309	)		(6,195,167	)		(946,436	)		(63,681	)		(289,787	)		(394,356	)		733,773			(21,883,963	)
Total Stockholders' Deficit attributable to LEO MOTORS, INC.			6,956,597			(1,307,304	)		629,229			26,572			(154,408	)		(213,851	)					(1,824,905	)
Non-controlling interest			0			0			0			0			0			0			2,729,375			2,729,375
Total Stockholders' Deficit			6,956,597			(1,307,304	)		629,229			26,572			(154,408	)		(213,851	)					904,470
Total Liabilities and Stockholders' Deficit		$	8,096,486			332,981			1,241,263			170,023			409,928			556,305			(5,032,365	)		5,774,621

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

This report contains forward-looking statements. These forward-looking statements include, without limitation, statements containing the words “believes,” “anticipates,” “expects,” “intends,” “projects,” “will,” and other words of similar import or the negative of those terms or expressions. Forward-looking statements in this report include, but are not limited to, expectations of future levels of research and development spending, general and administrative spending, levels of capital expenditures and operating results, sufficiency of our capital resources, our intention to pursue and consummate strategic opportunities available to us, including sales of certain of our assets. Forward-looking statements subject to certain known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  These risks and uncertainties include, but are not limited to those described in “Risk Factors” of our reports filed with the Securities and Exchange Commission. This Management’s Discussion and Analysis should be read in conjunction with the financial statements included in this Quarterly Report Form 10-Q. The financial statements have been prepared in accordance with generally accepted accounting policies in the United States (“GAAP”).  Except as otherwise disclosed, all dollar figures included therein and in the following management discussion and analysis are quoted in United States dollars.

SPECIAL NOTICE ABOUT GOING CONCERN AUDIT OPINION

OUR AUDITOR HAS ISSUED AN OPINION EXPRESSING DOUBT AS TO OUR ABILITY TO CONTINUE IN BUSINESS AS A GOING CONCERN.  YOU SHOULD READ THIS QUARTERLY REPORT ON FORM 10-Q WITH THE “GOING CONCERN” ISSUES IN MIND.

Overview

Leo Motors, Inc. (the “Company, ” or “we”) is a Nevada Corporation incorporated on September 8, 2004.  The Company, through its wholly-owned Korean subsidiary Leo Motors, Co. Ltd. (“Leo Korea”),  is engaged in the development, assembly and sales of the energy storage devices and electric vehicle components.  Leo Korea operates through four unincorporated divisions: new product research & development (“R&D”), post R&D development such as product testing, production, and sales.

The Company’s products include (i) E-Box electric energy storage system for solar and wind power generation devices; and (ii) EV components that integrate electric batteries with electric motors such as EV Controllers that use a mini-computer to control torque drive.

The Company was previously actively engaged in the process of development and production of Electric Power Train Systems (“EPTS”) encompassing electric scooters, electric sedans/SUVs/sports cars, and electric buses/trucks as well as several models of EVs. Our EPTS can replace internal combustion engines (“ICEs”).  Company began sales of EPTS to auto makers and agricultural machinery manufacturers in 2010.

The Company has developed eight EPTS of increasing power rating: 3kW, 5kW, 7.5kW, 15kW, 30kW, 60kW, 120kW, and 240kW.  Each EPTS consists of a motor, a controller, and a battery power pack with a battery management system (“BMS”).

The Company has successfully converted existing models of small cars (ICEs under 2,000cc) and a 24 seat bus.  The Company has begun marketing its 60kW power train kits (for compact passenger cars and small trucks) and its 120kW kits (for ICE passenger cars, buses, and trucks under 5,000cc). The Company has developed a 240kW kit (for up to 10,000cc buses and trucks) as well, and is attempting to locate a strategic partner to fund the testing and production.

The specific goals of the Company over the next twelve months include:

l	· Focus on the capitalization of the Company;
l	· Focus on the sale of the Electric -Boats and E-Box;
l	· Business development in China by establishing joint venture company in China, and in Japan;
l	· Continue with R&D of our EV’s, electric boats, and related products as capital permits.

The E-Box can be used as an energy supplying device in an emergency situations or as an energy storage device for use by the military; municipal and industry; corporate; solar/wind power storage; electric coolers and heaters; yachts or small ships. The E-Box is offered in three power classes: 1kw, 3kw and 5kw.  E-Boxes for 10kw and 550kw will be developed in the future.  The E-Box is environmentally friendly with high energy density due to the use of lithium-polymer battery.  The E-Box uses a multiple cell voltage balancing system via a BMS.

The Company is developing new battery exchange system using its patented cartridge battery exchange system which will solve the cost barriers of the electric vehicle to make them less expensive than their ICE counterparts and to help solve battery charging problems. With evolutionary battery exchange system, the Company’s EV’s can exchange battery within one minute using simple and low cost equipment. This technology can be best used in fleet managed vehicles such as city buses, taxis, and garbage trucks because it can be used at any road sides.

Recent Business Developments

On September 14, 2015 the Company entered into a Memorandum of Understanding with the BIMP-EAGA Business Council to jointly establish Electric Vehicle (EV) and Electric Boat (EB) consignment businesses in the BIMP-EAGA including Brunei, Indonesia, Malaysia and Philippines.

On September 30, 2015, Leo Korea increased its capital stock from 3,728,792,300 won (approximately $3,186,457) to 5,805,518,900 won (approximately $4,961,134), an increase of approximately $1.8 million, including cash investment of approximately $854,555. With the increase of capital, we believe Leo Korea is financially better positioned to manufacture major EV components when our projects in China and the BIMP-EAGA countries start.

Results of Operations - For the Quarter Ended September 30, 2015 and 2014

Revenues

Sales for the three months ended September 30, 2015 were $922,326 compared to $28,813 for the three months ended September 30, 2014, an increase of $893,513. The increase was attributable to revenues generated by the three newly acquired companies in March 2015.

Cost of Revenue

Cost of revenue was $414,240 for the quarter ended September 30, 2015 as compared to $20,521 for the same period of 2014. The increase in cost of revenue was due to the increase in revenues.

Gross Profit

Gross profit was $508,086 for the quarter ended September 30, 2015, or 55% of revenue, as compared to $8,292, or 29% of revenue for the same quarter last year.  The higher gross profit margin was due to the higher profit margin of the three newly added subsidiaries.

Operating Expenses

Operating expenses for the quarters indicated below consisted of the following:

	For the Three Months Ended
	September 30,			September 30,
Total Operating Expenses:	2015			2014
Salaries and Benefits		$	608,070		$	182,051
Consulting and Service Fees			47,286			138,000
Selling, General and Administrative			300,824			21,479
Total		$	956,180		$	341,530

Salaries and Benefits consist of total of common stock issued to our executive officers as compensation for their services as officers of the Company and cash compensation paid to our employees during the year and the cost of all benefits provided to our employees. Salaries and Benefits increased by $426,019, or 234% due to increase in number of employees following the acquisition of three companies in March 2015.

Consulting and Service Fees consist of consist of accounting, legal, and professional fees. These fees decreased by $90,714, or 66% . We incurred  audit fee for the acquisition of LGM and referral fees for financings in the third quarter of 2014.

Selling, General and Administrative consists of travel expenses, entertainment expenses, communication expenses, utilities, taxes & dues, depreciation expenses, rent, repairs, vehicle maintenance, ordinary development expenses, shipping, education & training, printing, storage, advertising, insurance, office supplies and expense, payroll expenses, investor referral fees and other miscellaneous expenses. These fees increased by $279,345, or 1,301% due to the increase in expenses from newly acquired companies and market development costs.

Other Income (Expenses)

During the three months ended September 30, 2015, we had $35,605 in net other income, compared to $141,126 in net expenses for the three months ended September 30, 2014, representing a change of $176,731, primarily due to a reduction of $128,379 in interest expense due to the decrease in outstanding loans.

Net Income (Loss)

As a result of factors discussed above, our net loss for the three months ended September 30, 2015 was $412,489, a decrease of $61,875, as compared to $474,364 for the three months ending September 30, 2014.

Results of Operations - For the Nine Months Ended September 30, 2015 and 2014

Revenues

Sales for the nine months ended September 30, 2015 were $2,331,294 compared to $28,813 for the nine months ended September 30, 2014, an increase of $2,302,481. The substantial increase in revenue was from the operations of our newly acquired subsidiaries in March 2015.

Cost of Revenue

Cost of revenue was $1,027,969 for the nine months ended September 30, 2015 as compared to $20,521 for the same period of 2014. The increase in cost of revenue was due to the increase in revenues.

Gross Profit

Gross profit was $1,303,325 for the nine months ended September 30, 2015, or 56% of revenue, as compared to $8,292, or 29% of revenue for the same quarter last year.  The higher gross profit margin was due to higher profit margins of the newly acquired subsidiaries.

Operating Expenses

Operating expenses for the periods indicated below consisted of the following:

	For the Nine Months Ended
	September 30,			September 30,
Total Operating Expenses:	2015			2014
Salaries and Benefits		$	1,644,273		$	1,454,317
Consulting and Service Fees			503,550			280,965
Selling, General and Administrative			990,201			104,758
Total		$	3,138,024		$	1,840,040

Salaries and Benefits consist of total of common stock issued to our executive officers as compensation for their services as officers of the Company and cash compensation paid to our employees during the year and the cost of all benefits provided to our employees. Salaries and Benefits increased by $189,956, or 13% due to the increase of salaries and benefits paid to employees of the newly acquired subsidiaries.

Consulting and Service Fees consist of consist of accounting, legal, and professional fees. These fees increased by $222,585, or 79% due to an increase in legal fees and translation service fees in connection with the Company’s execution of a joint venture agreement with a Chinese company.

Selling, General and Administrative consists of travel expenses, entertainment expenses, communication expenses, utilities, taxes & dues, depreciation expenses, rent, repairs, vehicle maintenance, ordinary development expenses, shipping, education & training, printing, storage, advertising, insurance, office supplies and expense, payroll expenses, investor referral fees and other miscellaneous expenses. These fees increased by $885,443, or 845% due to increased overseas travelling expenses and marketing expenses in connection with the joint venture project in China and the increase of such expenses in the newly acquired subsidiaries.

Other Expenses

During the nine months ended September 30, 2015, we incurred $271,779 in net other expenses, compared to $199,423 in the nine months ended September 30, 2014, an increase of $72,356. This was primarily due to an increase in interest expense of $123,625 for the period based on increased borrowing during our expansion partially offset by an increase in other income of $41,553.

Net Income (Loss)

As a result of the factors discussed above, our net loss for the nine months ended September 30, 2015 increased slightly to $2,106,478 from $2,031,171 for the nine months ended September 30, 2014.

Liquidity and Capital Resources

Our liquidity and capital resources are limited. Accordingly, our ability to carry out our plan of operations and continue as a going concern is currently dependent on our ability to either generate significant new revenues or raise external capital through additional borrowing or the sale of additional equity.

The Company’s total assets at September 30, 2015 were $7,485,204 and total current liabilities were $4,132,457.  Significant losses from operations have been incurred since inception and there is an accumulated deficit of $23,313,267 as of September 30, 2015.  Continuation as a going concern is dependent upon attaining capital to achieve profitable operations while maintaining current fixed expense levels.

Cash Flow in Operating Activities

During the nine months ended September 30, 2015, we had net cash used in the operating activities of $2,908,813, primarily consisting of the purchase of inventories and prepayment to suppliers by Leo Trade, Leo Motors Factory 1and 2.

During the nine months ended September 30, 2014, net cash used in operating activities was $155,166, consisting of  purchase of parts and components needed in developing electric boats by LGM.

Cash Flow in Investing Activities

Net cash used for investing activities for the nine months ended September 30, 2015 totaled $598,530, consisting of $303,572 for equipment purchases and $294,958 for payment on deposits. Net cash was used in investing activities for the nine months ended September 30, 2014 was $16,846 for investment in equipment.

Cash Flow in Financing Activities

During the nine months ended September 30, 2015, cash provided from financing activities included proceeds from financing of $3,741,369 partially offset by repayment of debt of $562,235. During the nine months ended September 30, 2014, cash provided by financing activities included proceeds of $674,852 from debt and equity financing.

Item 3.                      Quantitative and Qualitative Disclosures about Market Risk.

None.

Item 4.                      Controls and Procedures.

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Co-Chief Executive Officers and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of September 30, 2015, we carried out an evaluation, under the supervision and with the participation of our management, including our Co-Chief Executive Officers and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Co-Chief Executive Officers and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report due to the material weaknesses in our internal control over financial reporting,relating to the limited number of persons responsible for the recording and reporting of financial information, the lack of separation of financial reporting duties, and the limited size of our management team in general.

We  are  in  the  process evaluating methods of improving our internal control  over  financial reporting, including the possible addition of financial reporting  staff  and  the  increased  separation  of  financial  reporting responsibility, and intend to implement such steps as are necessary and possible to  correct  these  material  weaknesses.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the fourth quarter of the year ended September 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II: OTHER INFORMATION

Item 1.                      Legal Proceedings.

None.

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

On July 2, 2015 and September 22, 2015, we issued 61,738 shares and 68,093 shares of common stock, respectively, to our counsel for legal services. The shares were issued without registration in reliance upon Section 4(a)(2) of the Securities Act of 1933, as amended, as they were sold in an offering without any public offering or distribution. These shares are restricted securities and include an appropriate restrictive legend.

Item 3.                      Defaults upon Senior Securities.

None.

Item 4.                       Mine Safety Disclosures.

Not Applicable.

Item 5.                      Other Information.

None.

Item 6.                        Exhibits.

The following exhibits are filed as part of this quarterly report on Form 10-Q:

Exhibit No.	Description
31.1	Certification of Co-Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certification of Co-Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.3	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification of the Co-Executive Officers and the Chief Financial Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
101.INS	XBRL Instance Document*
101.SCH	XBRL Taxonomy Extension Schema Document*
101.CAL	XBRL Taxonomy Calculation Linkbase Document*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB	XBRL Taxonomy Label Linkbase Document*
101.PRE	XBRL Taxonomy Presentation Linkbase Document*

*Filed herewith.

**Furnished 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.

	Leo Motors, Inc.
November 16, 2015	By:	/s/ Jun Heng Park
		Jun Heng Park
		Co-Chief Executive Officer (Principal Executive Officer)
November 16, 2015	By:	/s/ Shi Chul Kang
		Shi Chul Kang
		Co-Chief Executive Officer (Principal Executive Officer)
November 16, 2015	By:	/s/ Jeong Youl Choi
		JeongYoul Choi
		Chief Financial Officer (Principal Financial and Accounting Officer)