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 June 30, 2009
--------------------------------------------

[ ] 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 000-15303
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LEO MOTORS, INC.
(Exact name of registrant as specified in its charter)

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

291-1, Hasangok-dong, Hanam City, Gyeonggi-do, Republic of Korea 465-250

- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)

Copy to:

Cutler Law Group
9814 Crystal Blvd
Baytown, TX 77521
Fax: 800-836-0714
Email: rcutler@cutlerlaw.com
---------------------

Registrant's telephone number, including area code +82 31 796 8805
---------------

n/a
- --------------------------------------------------------------------------------
(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 [ ]

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 [ ] Smaller reporting company [x]
(Do not check if a 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 [ ] No [x]

The number of shares of the registrant's common stock outstanding as of June 30,
2009 was 37,638,115 shares.

LEO MOTORS, INC.
----------------

INDEX TO QUARTERLY REPORT ON FORM 10-Q

PART I. FINANCIAL INFORMATION PAGE NO.
- -------- ------------------------------------------------------------ --------

Item 1. Condensed Consolidated Interim Financial
Statements (Unaudited)

Condensed Consolidated Balance Sheets at June 30,
2009 (unaudited) F-4

Condensed Consolidated Statements of Operations for the
three months ended June 30, 2009 (Unaudited) F-5

Condensed Consolidated Statement of Cash Flows for the
three months ended June 30, 2009 (Unaudited) F-6

Notes to Condensed Consolidated Interim Financial
Statements (unaudited) F-7

Item 2. Management's Discussion and Analysis 13

Item 3. Quantitative and Qualitative Disclosures About Market Risk. 15

Item 4. Controls and Procedures 15

PART II. OTHER INFORMATION
- -------- ------------------------------------------------------------

Item 1. Legal Proceedings 16

Item 2. Unregistered Sales of Equity Securities and
Use of Proceeds 16

Item 3. Defaults Upon Senior Securities 16

Item 4. Submission of Matters to a Vote of Security Holders 16

Item 5. Other Information 16

Item 6. Exhibits 16

Signatures 17

Page 3

PART I. FINANCIAL INFORMATION.

ITEM 1. CONDENSED CONSONSOLIDATED INTERIM FINANCIAL STATEMENTS

LEO MOTORS, INC.
(a development stage company)
CONSOLIDATED BALANCE SHEETS
June 30, 2009

JUNE 30, DECEMBER 31,
2009 2008
(UNAUDITED)
------------ --------------
ASSETS
Current Assets:
Cash in Bank $ 564,800 $ 32,181
Accounts Receivable-net of
allowance of $11,735 and 0 46,414 13,854
Inventory 5,175 35,575
Prepaid Costs 115,332 130,568
------------ --------------
Total Current Assets 731,721 212,178

Fixed Assets-Net 131,228 5,940
Deposits 76,125 63,104
------------ --------------

TOTAL ASSETS $ 939,074 $ 281,222
============ ==============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable and
Accrued Expenses 102,255 16,850
Taxes Payable - 2,080
Payments Received in Advance - 396,197
Related Party Payable 600,397 804,794
Bank Loan 392,083 -
------------ --------------

Total Current Liabilities 1,094,735 1,219,921
------------ --------------

Total Liabilities 1,094,735 1,219,921

STOCKHOLDERS' EQUITY
Stock not yet issued 1,169,988 -
Common Stock, Authorized
100,000,000 Shares, $0.001
par value, 37,638,115 and
31,613,115 shares issued
and outstanding 37,638 31,613
Additional Paid in Capital 2,811,823 323,351
Comprehensive Loss - Translation (3,450) 237,386
Retained Deficit (4,171,660) (1,531,049)
------------ --------------
Stockholders' Deficit (155,661) (938,699)
------------ --------------
TOTAL LIABILITIES AND STOCKHOLDERS'
DEFICIT $ 939,074 $ 281,222
============ ==============

The notes are an integral part of these financial statements

F-4

LEO MOTORS, INC.
(a development stage company)
CONSOLIDATED STATEMENT OF OPERATIONS
For the Three and Six Months Ended June 30, 2009 and 2008
and for the period from Inception (July 1, 2006) to June 30, 2009

JULY1, 2006
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED (DATE OF INCEPTION)
JUNE 30, JUNE 30, TO JUNE 30,
2009 2008 2009 2008 2009
--------------- -------------- ------------- -------------- --------------------

SALES $ 29,128 $ - $ 389,009 $ 2,254 $ 641,760
COST OF SALES 25,063 - (233,266) - (233,266)
--------------- -------------- ------------- -------------- --------------------

GROSS PROFIT 4,065 - 155,743 2,254 408,494

EXPENDITURES
Salaries and Benefits 236,131 116,581 262,345 234,329 656,775
Service Fees 31,201 18,757 65,753 43,545 297,411
General and Administrative 680,212 72,527 2,465,207 170,625 3,733,956
--------------- -------------- ------------- -------------- --------------------

TOTAL EXPENSES 947,544 207,865 2,793,305 448,499 4,688,142

LOSS FROM CONTINUING OPERATIONS (943,479) (207,865) (2,637,562) (446,245) (4,279,648)

OTHER INCOME (EXPENSE)
Consulting Income - 107,988 - 107,988 107,988
--------------- -------------- ------------- -------------- --------------------
Other Expense (18,752) - (3,049) - -
--------------- -------------- ------------- -------------- --------------------

NET LOSS FOR THE PERIOD (962,231) (201,306) (2,640,611) (431,058) (4,171,660)
=============== ============== ============= ============== ====================

BASIC AND DILUTED LOSS PER SHARE $ (0.026) $ (0.01) $ (0.076) $ (0.01)
=============== ============== ============= ==============

WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 36,792,282 30,312,315 34,625,615 30,312,315
=============== ============== ============= ==============
<FN>

The notes are an integral part of these financial statements

F-5

LEO MOTORS, INC.
(a development stage company)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the Three and Six Months Ended June 30, 2009 and 2008
and for the period from Inception (July 1, 2006) to June 30, 2009

Net Profit (Loss) $ (961,000) $ (200,564) $ (2,639,602) $ (432,428) $ (4,167,317)

Currency Transaction Loss (1,231) (742) (1,029) 1,370 (4,343)
--------------- -------------- ------------- -------------- --------------------

Total Comprehensive Income $ (962,231) $ (201,306) $ (2,640,611) $ (431,058) $ (4,171,660)

<FN>

The notes are an integral part of these financial statements

F-6

LEO MOTORS, INC.
(a development stage company)
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Three Months Ended June 30, 2009 and 2008
and for the period from Inception (July 1, 2006) to June 30, 2009

THE PERIOD
THE THREE THE THREE FROM INCEPTION
MONTHS ENDED MONTHS ENDED (JULY 1, 2006)
JUNE 30, MARCH 31, TO MARCH 31,
2009 2008 2009
-------------- -------------- ----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (2,640,611) $ ( 431,058) $ (4,171,660)
Adjustments to reconcile net loss to net cash
provided by operating activities: Stock issued 2,037,584 2,180,666
Depreciation 5,940 4,000 67,806
(Increase) in Inventory 30,400 2,868 (5,175)
(Increase) Decrease in Accounts Receivable (32,560) (1,902) (46,414)
(Increase) Decrease in Deposits/Prepaid 2,215 111,357 (191,457)
Increase (Decrease) in Accounts Payable
and Accrued Expenses/Payments in
Advance 83,325 30,355 102,255
Increase in Taxes and Advances - - -
-------------- -------------- ----------------

NET CASH FLOWS USED IN OPERATING ACTIVITIES (168,497) (143,993) (953,184)

CASH FLOWS FROM INVESTING ACTIVITIES
Fixed Assets - - (41,007)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Stock Advances 1,626,901 - 2,831,263
Proceeds from related party /Bank 392,083 255,139 2,143,892
Debt reduction related party / Payments
in advance (600,594) - (2,143,892)
-------------- -------------- ----------------

NET CASH FLOWS FROM FINANCING ACTIVITIES 1,418,390 255,139 2,831,263
-------------- -------------- ----------------

CHANGE IN CASH DUE TO FOREIGN CURRENCY
TRANSLATION ADJUSTMENT (240,836) 52,446 (3,450)

NET INCREASE (DECREASE) IN CASH 532,619 (36,058) 564,800

CASH AT THE BEGINNING OF THE PERIOD 32,181 38,061 -
-------------- -------------- ----------------

CASH AT THE END OF THE PERIOD $ 564,800 $ 2,003 $ 564,800
============== ============== ================

Income taxes paid - - -

Interest expense paid - - -

<FN>
The notes are an integral part of these financial statements

F-7

LEO MOTORS, INC.
(a development stage company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2009

NOTE 1 - BACKGROUND AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Background

Leo Motors, Inc, Inc. (the "Company") was originally incorporated as Classic
Auto Accessories, a California Corporation on July 2, 1986. The Company then
underwent several name changes from FCR Automotive Group, Inc. to Shini
Precision Machinery, Inc. to Simco America Inc. and then to Leo Motors. The
Company had been dormant since 1989, and effectuated 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 Company is a development stage enterprise under SFAS No. 7, as principal
operations have begun but the Company has not realized substantial revenues.

Basis of Presentation and Going Concern

The accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America, which
contemplate continuation of the Company as a going concern. The company has
incurred material losses. These conditions raise substantial doubt as to the
Company's ability to continue as a growing concern. These financial statements
do not include any adjustments that might result from the outcome of this
uncertainty. These financial statements do not include any adjustments relating
to the recoverability and classification of recorded asset amounts, or amounts
and classification of recorded asset amounts, or amounts and classification of
liabilities that might be necessary should the Company be unable to continue as
a going concern.

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

Revenues are recognized upon sale and shipment of the product.

F-8

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
six months 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. The Company has
established a reserve on receivables of $11,735.

Concentration of Credit Risk

Financial instruments which subject the Company to concentrations of credit risk
include cash and cash equivalents.

The Company maintains its cash in well-known banks selected based upon
management's assessment of the bank's financial stability. Balances may
periodically exceed the $250,000 federal depository insurance limit; however,
the Company has not experienced any losses on deposits. The Company extends
credit based on an evaluation of the customer's financial condition, generally
without collateral. Exposure to losses on receivables is principally dependent
on each customer's financial condition. The Company monitors its exposure for
credit losses and maintains allowances for anticipated losses, as required.

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.

Comprehensive Income

Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income," establishes standards for the reporting and display of
comprehensive income and its components in the financial statements.

The functional currency of the Company is the Korean Won. Assets and
liabilities are translated to U.S. Dollars at the period-end exchange rates
($.0007584166) and ($.000955292) respectively and revenues and expenses are
translated at weighted average exchange rates for the period, which was
(.000742274) and (001009135) respectively. Resulting translation adjustments
are recorded as a component of stockholders' equity in other comprehensive
income (loss).

F-9

Advertising Costs

Advertising costs are expensed as incurred.

Income Taxes

The Company accounts for income taxes under SFAS 109, "Accounting for Income
Taxes." Under the asset and liability method of SFAS 109, deferred tax assets
and liabilities are recognized for the future tax consequences attributable to
differences between the financial statements carrying amounts of existing assets
and liabilities and their respective tax bases. 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.

Loss per Share

In accordance with SFAS No. 128, "Earnings Per Share," the basic income / (loss)
per common share is computed by dividing net income / (loss) available to common
stockholders by the weighted average number of common shares outstanding.
Diluted income per common share is computed similar to basic income per share
except that the denominator is increased to include the number of additional
common shares that would have been outstanding if the potential common shares
had been issued and if the additional common shares were dilutive.

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.

For the year ended December 31, 2008 the Company issued 1,300,800 shares,
1,000,000 for a reduction of debt and 300,000 for services both valued at market
at .11 per share. The shares for services were recognized as an expense in
general and administrative at $33,000.

For the quarter ended March 31, 2009 the Company issued 4,333,334 shares,
833,334 for cash and the balance valued at market at .50 and recognized a stock
for services expense of $1,750,000.

For the quarter ended June 30, 2009 1,691,666 shares were issued valued at
market of .17 and recognized a stock for services expense of $287,584.

Recent Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (FAS
141(R)). This Statement provides greater consistency in the accounting and
financial reporting of business combinations. It requires the acquiring entity
in a business combination to recognize all assets acquired and liabilities
assumed in the transaction, establishes the acquisition-date fair value as the
measurement objective for all assets acquired and liabilities assumed, and
requires the acquirer to disclose the nature and financial effect of the
business combination. FAS 141(R) is effective for fiscal years beginning after

F-10

December 15, 2008. We will adopt FAS 141(R) no later than the first quarter of
fiscal 2009 and are currently assessing the impact the adoption will have on our
financial position and results of operations.

In December 2007, the FASB issued SFAS No. 160. Noncontrolling Interests in
Consolidated Financial Statements (FAS 160). This Statement amends Accounting
Research Bulletin No. 51, Consolidated Financial Statements, to establish
accounting and reporting standards for the noncontrolling interest in a
subsidiary and for the deconsolidation of a subsidiary. FAS 160 is effective for
fiscal years beginning after December 15, 2008. We will adopt FAS 160 no later
than the first quarter of fiscal 2009 and are currently assessing the impact the
adoption will have on our financial position and results of operations.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities, which permits entities to choose to
measure at fair value eligible financial instruments and certain other items
that are not currently required to be measured at fair value. The standard
requires that unrealized gains and losses on items for which the fair value
option has been elected be reported in earnings at each subsequent reporting
date. SFAS No. 159 is effective for fiscal years beginning after November 15,
2007. We have adopted SFAS No. 159 which has had no impact on our financial
position and results of operations.

In September 2006, the FASB issued SFAS No. 158, Employers' Accounting for
Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB
Statements No. 87, 88, 106, and 132(R). SFAS No. 158 requires company plan
sponsors to display the net over- or under-funded position of a defined benefit
postretirement plan as an asset or liability, with any unrecognized prior
service costs, transition obligations or actuarial gains/losses reported as a
component of other comprehensive income in shareholders' equity. SFAS No. 158 is
effective for fiscal years ending after December 15, 2006. We adopted the
recognition provisions of SFAS No. 158 as of the end of fiscal 2007. The
adoption of SFAS No. 158 did not have an effect on the Company's financial
position or results of operations.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS
No. 157 establishes a framework for measuring fair value in generally accepted
accounting principles, clarifies the definition of fair value and expands
disclosures about fair value measurements. SFAS No. 157 does not require any new
fair value measurements. However, the application of SFAS No. 157 may change
current practice for some entities. SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. We have adopted SFAS No. 157 and it
has had no impact on our financial position and results of operations.

In July 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty
in Income Taxes - an interpretation of FASB Statement No. 109 (FIN 48). This
interpretation clarifies the application of SFAS No. 109, Accounting for Income
Taxes, by defining a criterion that an individual tax position must meet for any
part of the benefit of that position to be recognized in an enterprise's
financial statements and also provides guidance on measurement, derecognition,
classification, interest and penalties, accounting in interim periods,
disclosure and transition. FIN 48 is effective for fiscal years beginning after
December 15, 2006, but earlier adoption is permitted. The Company has adopted
this and there is no impact of the application of the Interpretation to its
financial statements.

NOTE 3 - EARNINGS PER SHARE

Basic earnings per share are calculated by dividing net income by the weighted
average number of common shares outstanding during the period.

F-11

NOTE 4-ACCOUNTS RECEIVABLE

The Company recognizes a receivable on sales of parts and electrical motor
equipment. The Company has established a reserve for allowance for doubtful
accounts in 2008 equal to $11,735.

NOTE 5-INVENTORY

The Company accounts for its inventory under the FIFO method and lower of cost
or market method of costing. The company's inventory consists of parts for the
electric transportation industry.

NOTE 6-FIXED ASSETS

The Company's assets consist of the following: 6/09 12/31/08

Furniture Fixtures and Equipment $172,985 $ 41,007
Less Accumulated Depreciation (41,757) (35,067)

Net $131,228 $ 5,940

The Company depreciates it assets over useful lives of between 3 and 7 years.
Depreciation expense was $5,940 in 2009.

NOTE 7-DUE TO RELATED PARTY

The company at June 30, 2009 owed $600,397 for officer advances; repayment is
without interest on demand.

NOTE 8-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.

NOTE 9-BANK LOAN

The Company is indebted to Shin Han Bank at June 30, 2009 for $392,083 payable
within one year, interest at prime.

F-12

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

FORWARD LOOKING STATEMENTS: STATEMENTS ABOUT OUR FUTURE EXPECTATIONS ARE
"FORWARD-LOOKING STATEMENTS" AND ARE NOT GUARANTEES OF FUTURE PERFORMANCE. WHEN
USED HEREIN, THE WORDS "MAY," "WILL," "SHOULD," "ANTICIPATE," "BELIEVE,"
"APPEAR," "INTEND," "PLAN," "EXPECT," "ESTIMATE," "APPROXIMATE," AND SIMILAR
EXPRESSIONS ARE INTENDED TO IDENTIFY SUCH FORWARD-LOOKING STATEMENTS. THESE
STATEMENTS INVOLVE RISKS AND UNCERTAINTIES INHERENT IN OUR BUSINESS, INCLUDING
THOSE SET FORTH UNDER THE CAPTION "RISK FACTORS," IN THIS DISCLOSURE STATEMENT,
AND ARE SUBJECT TO CHANGE AT ANY TIME. OUR ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THESE FORWARD-LOOKING STATEMENTS. THIS FORM 10-Q DOES NOT HAVE
ANY STATUTORY SAFE HARBOR FOR THIS FORWARD LOOKING STATEMENT. WE UNDERTAKE NO
OBLIGATION TO UPDATE PUBLICLY ANY FORWARD-LOOKING STATEMENT.

This Management's Discussion and Analysis should be read in conjunction with the
financial statements included in this Quarterly Report on Form 10-Q (the
"Financial Statements"). 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.

BUSINESS DEVELOPMENTS

During the quarter ended June 30, 2009 and the interim period through the date
hereof, we have focused our efforts on seeking financing, preparing models of
our EVs for order-basis manufacturing, negotiating manufacturing partnerships
and attempting to procure advanced orders. Our specific near and long term
goals are:

- - Production and sale of our electric scooters by October 2009

- - Production and sale of S 65 SUV and SKG electric car by the end of 2009

- - Production and sale of Reverse Tricycle Scooters by October 2009

- - Marketing of our EV conversion kit and conversion services by the end of
2009

- - Testing of EV conversion kit on Toyota RAV-4 model during September 2009

- - Manufacture and sale of our power storage system for solar and wind power
houses and buildings by October 2009

On April 23, 2009, we entered into a manufacturing agreement with Chulin Home
Tech Co., Ltd. for the production of our Electric Motorcycle. The agreement
anticipates over 2,000 unit orders per year but does not require minimum orders
or payments. The price per unit will need to be agreed between the parties at a
later date.

In April 2009, we completed testing of the EV conversion kit on the Kia Morning
model. The conversion kit included our 300 volt Battery Management System, a
60kW water-cooled AC motor with controller, lithium polymer power pack, and a
home charger. Until we find a partner to supply vehicle bodies, we intend to
market the conversion kit as well as conversion services.

In March 2009, we developed our electric motorcycle. We have entered into sales
agreement for this e-motorcycle with Bike Lease, subject to successful product
testing by Bike Lease. If the product

Page 13

successfully completes testing, the agreement calls for a minimum of 3,000 units
in the first year. We have signed an agreement with Chulin to manufacture the
motorcycles.

In addition, our battery power pack for EV was requested to be developed as the
power storage system for wind or solar powered buildings and generators by the
customers in Japan, Korea, and UAE. We intend to finish the prototype for these
power packs during September 2009, and plan to sell to the customers from
October.

LIQUIDITY AND CAPITAL RESOURCES

Our liquidity requirements arise principally from our plans to develop EV
production capability or production partnerships, additional product
development, and marketing costs. Although in the future we intend to fund our
liquidity requirements through a combination of cash on hand and revenues from
operations, during the second quarter of 2009, the Company had incurred $947,544
in expenses and had realized $29,128 in revenues with $ 25,063 in cost of goods
sold. Accordingly, our ability to initiate our plan of operations and continue
as a going concern is currently dependent on our ability to raise external
capital.

To date we have raised approximately $840,000 in debt financing, including a
loan from one of our officers of $440,000. In additiona, in May, 2009, the
Company secured a loan from Shin Han Bank for 500,000,000 Korean Won
(approximately $400,000), with a term of one year which can be extended under
certain conditions. The loan is guaranteed by KIBO Technology Fund.

To date we have raised approximately $936,200 in equity financing. During the
quarter, we raised approximately $119,200 in equity financing on the issuance of
shares of common stock to a Korean individual investor.

As we have not generated significant revenues and have not raised a significant
amount of equity or debt financing to date, there is substantial doubt as to our
ability to continue in the short term and long term as a going concern. Our
plan in the short term is to continue our operations at their current level,
which our current cash holdings will cover through fiscal 2009. Our long term
survival will depend on the growth of our operations towards full scale
manufacturing and sales of our EVs, which in turn will depend on our ability to
raise sufficient financing. If our fund raising efforts should fail or fall
short of our goal, we will have to restructure our business plan in order to
sustain our operations. However, in that event we may be unable to implement
our business plan or continue operations.

RESULTS OF OPERATIONS

Revenues

The Sales for the quarter ended June 30, 2009 were $29,128 compared to $0 for
the quarter ended June 30, 2008. Costs of sales were $25,063 and gross profit
was $4,065 compared to $0 as costs of sales and $0 as gross profit in the same
period in 2008. The sales during this quarter were not generated from regular
business as most of our sales are for our product samples or development
services. We believe recurring revenue will begin this year as our goal is to
begin mass production and marketing of our designs.

Page 14

Expenses

During the quarter, we incurred $947,544 in expenses, compared to $207,865 in
the quarter ended June 30, 2008. The primary increase was due to a $320,101, or
341% increase in General and Administrative expenses, which reflects the payment
of consulting service fees and development costs.

Expenses for the quarter consisted of the following:

EXPENSES: 2008 2007
Salaries and Benefits 236,131 116,581
Service Fees 31,201 18,757
Service Fees paid by stock 287,584 -
General and Administrative 392,628 72,527

Salaries and Benefits - consist of total cash compensation paid to our employees
during the year and the cost of all benefits provided to our employees.

Service Fees - consist of consist of accounting, legal, and professional fees.

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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

None.

ITEM 4. CONTROLS AND PROCEDURES.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Our management, including our Chief Executive and Principal Financial Officer,
evaluated the effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Securities Exchange Act Rules 13a-15(e)
and 15d-15(e)) as of June 30, 2009. Our disclosure controls and procedures are
designed to ensure that information required to be disclosed by the issuer in
the reports that it files or submits under the Act (15 U.S.C. 78a et seq.) is
recorded, processed, summarized, and reported, within the time periods specified
in the Commission's rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by an issuer in the reports that it files
or submits under the Act is accumulated and communicated to the issuer's
management, including its principal executive and principal financial officers,
or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure. Based on this evaluation, our Chief
Executive and Principal Financial Officer concluded that our disclosure controls
and procedures were not effective as of June 30, 2009.

CHANGES IN INTERNAL CONTROLS

There were no changes in our internal control over financial reporting during
the quarter ended June 30, 2009, that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.

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PART II: OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

None.

ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On May 11, 2009, the Company issued 1,250,000 shares to a creditor of the
Company in consideration for the reduction of debt, valued at $212,500. This
issuance was completed in accordance with Section 4(2) of the Securities Act and
Regulation D in an offering without any public offering or distribution. These
shares are restricted securities and include an appropriate restrictive legend.

On May 11, 2009, the Company issued a total of 291,666 shares to three
consultants in consideration for consulting services valued at $35,584. These
issuances were completed in accordance with Section 4(2) of the Securities Act
and Regulation D in an offering without any public offering or distribution.
These shares are restricted securities and include an appropriate restrictive
legend.

On May 11, 2009, the Company issued 250,000 shares of common stock to a Korean
individual investor in exchange for 150,000,000 Korean Won (approximately
$119,200). This issuance was completed as an offer and sale of securities made
outside of the United States pursuant to Regulation S.

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5 - OTHER INFORMATION

None.

ITEM 6 - EXHIBITS

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

10.9 Loan Agreement with Shinhan Bank dated May 27, 2009.

10.10 Letter of Guarantee by KIBO Technology Fund dated May 27, 2009.

31.1 Certification of Chief Executive Officer and Interim Chief Financial
Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1 Certification of Chief Executive Officer and Interim Chief Financial
Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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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.

Dated: August 20, 2009 LEO MOTORS, INC.
(the registrant)

By: \s\Shi Chul Kang
----------------
Shi Chul Kang
Chief Executive Officer
and Interim Chief Financial Office

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