Mark C Lee
Tel 916.442.1111
Fax 916.448.1709
leema@gtlaw.com
September 8, 2014
Via EDGAR and FedEx
Maryse Mills-Apenteng
Special Counsel
United States Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, D.C. 20549
| Re: | World Moto, Inc. |
Amendment No. 3 to Registration Statement on Form S-1
Filed on August 7, 2014
File No. 333-195710
Dear Ms.Mills-Apenteng:
On behalf of World Moto, Inc., a Nevada corporation (the “Company”), we are responding to comments in the letter from the Staff of the Securities and Exchange Commission (“Staff”) dated August 27, 2014, relating to the Company’s Amendment No. 3 to the Registration Statement on Form S-1 filed on August 7, 2014. The responses below have been numbered to correspond with the comments in your August 27, 2014 letter. As discussed with the Staff, we have provided a draft of Amendment No. 4 to the Registration Statement on Form S-1 (“Amendment No. 4”) via electronic mail to the Staff.
General
1. Please update your financial statements and related disclosures. Refer to Rule 8-08 of Regulation S-X.
Company Response 1:
The Company respectfully informs the Staff that the Company has updated Amendment No. 4 to include the information requested above.
2. Please refer to comment 2 of our prior letter, dated July 8, 2014 and ensure that your business plan, timelines and liquidity disclosures are updated with your next amendment accordingly.
Company Response 2:
The Company respectfully informs the Staff that the Company has updated Amendment No. 4 to include the information requested above.
Securities and Exchange Commission
Division of Corporation Finance
September 8, 2014
Notes to Consolidated Financial Statements
Note 1 – Summary of Significant Accounting Policies
Revenue Recognition, page F-7
3. We note your disclosure in your restatement footnote on page F-8 in response to prior comment 1 that you have decided not to recognize franchise fee revenues until the franchisee commences operations. Please revise your revenue recognition policy accordingly.
Company Response 3:
The Company respectfully informs the Staff that the Company has updated Amendment No. 4 to include the information requested above.
4. We note you have revised your revenue recognition policy in your interim financial statements on page F-7 in response to prior comment 2. Please also revise your revenue recognition policy in your audited financial statements on page F-16 to disclose a consistent revenue recognition policy.
Company Response 4:
The Company respectfully informs the Staff that the Company has updated Amendment No. 4 to include the information requested above.
Note 3 – Acquisition of World Moto Assets, page F-17
5. We have reviewed your response to prior comment 3. Your response indicates that you have concluded that you are the accounting and legal acquirer in this transaction. Tell us how you considered the ownership percentages between the entities/shareholders. Provide the ownership percentages of the new shareholders as of the acquisition date. Further, if the “new” shareholders have control as of the acquisition date, describe how you considered recording the assets transferred at their historical cost. We refer you to SAB Topic 5G.
Company Response 5:
The Company respectfully informs the Staff that after having carefully reviewed the ownership percentages of the new shareholders as of the acquisition date and SAB Topic 5G, it believes that the assets acquired from Old WM should be recorded at the transferors’ historical cost basis, which was zero, because the new shareholders obtained control as of the acquisition date, with an overall ownership percentage of approximately 60%. The Company also believes that the shares issued to the new shareholders should be recorded at their fair value as stock-based compensation in accordance with ASC Topic 845 – Nonmonetary Transactions when the Company’s common shares were publicly traded at the time of the acquisition.
The Company has updated Amendment No. 4 to include the following adjustments:
| 1. | To remove the intangible assets initially capitalized by the Company at fair value of common stock issued to the new shareholders; |
| 2. | To record the fair value of the shares issued to the new shareholders as stock-based compensation expense; |
| 3. | To remove the amortization expense previously recorded for the intangible assets. |
***
Securities and Exchange Commission
Division of Corporation Finance
September 8, 2014
We hope that the foregoing addresses all of the Staff’s comments contained in its letter dated August 27, 2014. In the event the Staff has no further comments, we would appreciate written correspondence to that effect.
If you have any questions regarding this response, please do not hesitate to contact me directly at (916) 442-1111.
Best regards,
/s/ Mark Lee
Mark C Lee Shareholder |
Securities and Exchange Commission
Division of Corporation Finance
September 8, 2014
ACKNOWLEDGEMENT
In connection with World Moto, Inc.’s (the “Company”) letter dated September 8, 2014,
addressed to the Securities Exchange Commission (the “Commission”), we acknowledge the following:
| · | the Company is responsible for the adequacy and accuracy of the disclosure in the filing; |
| · | Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and |
| · | the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. |
WORLD MOTO, INC.
/s/Paul Giles
_____________________________
Paul Giles
President