Quarterly Report (10-q)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

___________________________

FORM 10-Q

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

FOR THE QUARTER ENDED: JUNE 30, 2016

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

Commission File Number: 000 – 53492

___________________________

EMAV Holdings, Inc.

(Name of small business issuer in its charter)

___________________________

Delaware	26-3167800
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)


1900 Main Street, #300
Irvine, California 92614	92614
(Address of principal executive offices)	(zip code)

Registrant's telephone number, including area code: (949) 851-5996

___________________________

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 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 (Section 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 [_]

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large Accelerated Filer	☐	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller Reporting Company	S

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) YES [ ] NO [ X ]

As of September 29, 2016, there were 50,649,070 shares of the registrant's common stock, $0.001 par value per share, issued and 49,774,070 shares outstanding.

EMAV HOLDINGS, INC. AND SUBSIDIARY

Form 10-Q

For the Quarter Ended June 30, 2016

TABLE OF CONTENTS

		Page

Part I- Financial Information

Item 1.	Financial Statements	1

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	32

Item 4.	Controls and Procedures	32

Part II- Other Information

Item 1.	Legal Proceedings	34

Item 1A.	Risk Factors	34

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34

Item 3.	Default Upon Senior Securities	35

Item 4.	Mine Safety Disclosures	35

Item 5.	Other Information	35

Item 6.	Exhibits	35

	Signatures	38

PART I - FINANCIAL INFORMATION

Item 1.

Financial Statements.

EMAV HOLDINGS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30,			December 31,
	2016			2015
ASSETS	(Unaudited)

Current Assets
Cash and cash equivalents	$	-		$	1,802
Deferred offering costs		75,000			75,000
Prepaid expenses		-			1,000
Total Current Assets		75,000			77,802

Property and equipment, net		2,054			3,318

Total Assets	$	77,054		$	81,120

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities
Accounts payable	$	52,301		$	42,731
Accrued liabilities		13,807			10,859
Payable to related party		35,000			22,500
Embedded conversion option liability		673,615			78,713
Notes payable, current portion, net of debt discount of $9,774 and $15,639 at June 30, 2016 and December 31, 2015, respectively		138,459			144,339
Convertible note payable, current portion, net of discount of $121,762 and $27,426 at June 30, 2016 and December 31, 2015, respectively		62,776			22,574
Total Current Liabilities		975,958			321,716

Total Liabilities		975,958			321,716

Commitments and contingencies (Note 8)

Stockholders' Equity (Deficit)
Common stock, $0.001 par value, 100,000,000 shares authorized; 50,274,070 shares and 47,780,465 shares issued and 49,399,070 shares and 46,905,465 shares outstanding at June 30, 2016 and December 31, 2015, respectively		50,275			47,781
Treasury stock, 875,000 shares, $0.001 par value, issued not outstanding		(875	)		(875	)
Additional paid in capital		5,132,526			5,011,145
Accumulated deficit		(6,080,830	)		(5,298,647	)
Total Stockholders' Equity (Deficit)		(898,904	)		(240,596	)

Total Liabilities and Stockholders' Equity	$	77,054		$	81,120

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

EMAV HOLDINGS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2016			2015			2016			2015
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)

Revenues	$	-		$	-		$	-		$	-

Cost of goods sold		-			-			-			-

Gross Profit (Loss)		-			-			-			-

Operating Expenses
Depreciation		632			1,792			1,264			4,656
General and administrative		38,686			56,746			155,228			205,253
Total Operating Expenses		39,318			58,538			156,492			209,909

Operating Loss from Operations		(39,318	)		(58,538	)		(156,492	)		(209,909	)

Other Income (Expenses)
Interest expense		(66,193	)		(3,713	)		(116,376	)		(12,769	)
Change in the fair value of embedded conversion option liability		1,612,457			-			(509,315	)		-
Total Other Income (Expenses)		1,546,264			(3,713	)		(625,691	)		(12,769	)

Income (loss) from Continuing Operations before Income Taxes		1,506,946			(62,251	)		(782,183	)		(222,678	)

Provision for income tax		-			-			-			-

Net income (loss)	$	1,506,946		$	(62,251	)	$	(782,183	)	$	(222,678	)

Basic net income (loss) per common share	$	0.03		$	(0.00	)	$	(0.02	)	$	(0.00	)

Diluted net income (loss) per common share	$	0.03		$	(0.00	)	$	(0.01	)	$	(0.00	)

Weighted average number of shares outstanding - basic		48,944,000			46,654,664			48,020,817			46,622,869

Weighted average number of shares outstanding - diluted		53,114,358			46,654,664			52,191,175			46,622,869

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

EMAV HOLDINGS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	For The Six Months Ended June 30,
	2016			2015
	(Unaudited)			(Unaudited)
Cash Flows from Operating Activities:
Net loss	$	(782,183	)	$	(222,678	)
Adjustment to reconcile net loss to net cash used in operating activities:
Depreciation		1,264			4,656
Amortization of prepaid consulting services for stock issuances		1,000			42,666
Amortization of OID discount on notes payable		16,571			9,956
Amortization of embedded conversion option liability discount		89,157			-
Change in the fair value of embedded conversion option liability		509,315			-
Changes in operating assets and liabilities:
Accounts payable		9,570			33,260
Accrued liabilities		2,949			4,689
Net cash used in operating activities		(152,357	)		(127,451	)

Cash Flows from Financing Activities:
Cash proceeds from sale of stock		-			71,500
Cash proceeds from note payable		149,800			-
Cash proceeds from related party		12,500			10,000
Cash payments against note payable		(11,745	)		(6,953	)
Net cash provided by financing activities		150,555			74,547

Net increase (decrease) in cash and cash equivalents		(1,802	)		(52,904	)

Cash and cash equivalents, beginning of the period		1,802			63,914

Cash and cash equivalents, end of the period	$	0		$	11,010

Supplemental disclosures of cash flow information:
Cash paid for income taxes	$	-		$	-
Cash paid for interest	$	7,955		$	626

Supplemental disclosures of non-cash investing and financing activities:
Issuance of common stock pursuant to debt conversion	$	37,462		$	-
Settlement of embedded conversion derivative	$	86,414		$	-

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

EMAV HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended

June 30, 2016 and 2015

(Unaudited)

NOTE 1 – NATURE OF OPERATIONS AND GOING CONCERN

As used herein and except as otherwise noted, the term "Company", "it(s)", "our", "us", "we" and "EMAV" shall mean EMAV Holdings, Inc., a Delaware corporation, and its consolidated subsidiary Electric Motors and Vehicles Company ("EMAVC").

EMAVC's principal business is electric vehicle manufacturing and sales. It plans to design, assemble, and sell premium electric rugged sport adventure vehicles directly through a network of dealerships. EMAVC will deploy a unique approach to build and bring its vehicles to market. Rather than creating a new vehicle and building out a new distribution network, EMAVC will use the four-door Jeep Wrangler as the platform for its signature electric vehicle. At this time further development and initiation of sales is entirely dependent on our ability to raise additional capital.

Going Concern

The accompanying (a) condensed consolidated balance sheet at December 31, 2015 has been derived from the audited statements, and (b) the condensed consolidated unaudited financial statements as of and for the periods ended June 30, 2016 and 2015, have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements, and should be read in conjunction with the audited consolidated financial statements and related footnotes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015 (the "2015 Annual Report"), filed with the Securities and Exchange Commission (the "SEC") on April 4, 2016. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments), have been made which are necessary for a fair financial statements presentation. The financial statements include all material adjustments (consisting of normal recurring accruals) necessary to make the financial statements not misleading as required by Regulation S-X, Rule 10-01. Operating results for the six months ended June 30, 2016 are not necessarily indicative of the results of operations expected for the year ending December 31, 2016.

The Company's unaudited consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not yet established a stable ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The Company funded its operations in 2015 and 2016 through sale of its equity, debt financing and sale of its vehicle. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary financing to continue operations, and the attainment of profitable operations. The Company incurred a net loss of $782,183 for the six months ended June 30, 2016, used net cash in operating activities of $152,357, has a working capital deficit of $900,958, and has an accumulated deficit of $6,080,830 as of June 30, 2016. These factors, among others raise a substantial doubt regarding the Company's ability to continue as a going concern. If the Company is unable to obtain adequate capital, it could be forced to cease operations. The accompanying condensed consolidated financial statements do not include any adjustments to reflect the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

EMAV HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended

June 30, 2016 and 2015

(Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following summary of significant accounting policies of the Company is presented to assist in the understanding of the Company's consolidated financial statements. The consolidated financial statements and notes are the representation of the Company's management who is responsible for their integrity and objectivity. The consolidated financial statements of the Company conform to accounting principles generally accepted in the United States of America (U.S. GAAP).

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary Electric Motors and Vehicles Company. All intercompany balances and transactions are eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company's estimates of valuation of equity instruments. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. The company did not have any cash equivalents at June 30, 2016 and December 31, 2015, respectively.

Fair value of Financial Instruments and Fair Value Measurements

ASC 820, " Fair Value Measurements and Disclosures", requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

EMAV HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended

June 30, 2016 and 2015

(Unaudited)

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Company's financial instruments consist principally of accounts payable, accrued liabilities, loan payable to a related party and promissory notes payable. Pursuant to ASC 820 and ASC 825, " Financial Instruments" , the fair value of our cash equivalents is determined based on "Level 1" inputs, which consist of quoted prices in active markets for identical assets. The Company believes that the recorded values of all of the other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

Assets and liabilities measured at fair value on a recurring and non-recurring basis consist of the following at June 30, 2016:

				Fair Value Measurements at June 30, 2016
	Carrying Value at June 30, 2016			(Level 1)			(Level 2)			(Level 3)
Embedded conversion option liability		$	673,615		$	-		$	673,615		$	-

The following is a summary of activity of Level 2 assets and liabilities for the period ended June 30, 2016:

Embedded conversion option liability
Balance – January 1, 2016	$	78,713
Additions		172,000
Reclassification to equity		(86,413	)
Change in fair value		509,315
Balance – June 30, 2016	$	673,615

Changes in fair value of the embedded conversion option liability are included in Other Income (Expenses) in the accompanying Condensed Consolidated Statements of Operations.

EMAV HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended

June 30, 2016 and 2015

(Unaudited)

Revenue Recognition

The Company recognizes revenues when persuasive evidence of an arrangement exists; delivery has occurred; price is fixed or determinable; and collectability of the related receivable is reasonably assured. The Company closely follows the provisions of ASC 605 " Revenue Recognition ", which includes the guidelines of Staff Accounting Bulletin No. 104 as described above. The Company has not recognized any revenue for the three months and six months ended June 30, 2016 and 2015, respectively.

Earnings (Loss) Per Common Share

The Company computes net earnings (loss) per share in accordance with ASC 260, " Earnings per Share" . ASC 260 requires presentation of both basic and diluted net earnings per share ("EPS") on the face of the income statement. Basic EPS is computed by dividing earnings (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible note and preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. For the three months and six months ended June 30, 2016 and 2015, there were 4,170,358 and 0 shares of common stock available for conversion of convertible notes into equity, which if exercised, may dilute future earnings per share. Warrants outstanding to purchase 2,500,000 shares of common stock expired on April 14, 2016, and were excluded from these calculations as their effect would be anti-dilutive due to the reported net losses in each period. The following table sets forth the computation of basic and diluted net income (loss) per common share from continuing operations:

	For the Three Months Ended June 30,					For the Six Months Ended June 30,
	2016		2015			2016			2015
	(Unaudited)		(Unaudited)			(Unaudited)			(Unaudited)
Numerator:
Income (loss) from continuing operations	$	1,506,946	$	(62,251	)	$	(782,183	)	$	(222,678	)

Denominator:
Weighted average shares outstanding		48,944,000		46,654,664			48,020,817			46,622,869
Effect of dilutive securities:
Promissory notes convertible into common shares		4,170,358		-			-			-

Adjusted weighted-average shares and assumed conversions		53,114,358		46,654,664			52,191,175			46,622,869

Net income (loss) per common share from continuing operations:
Basic	$	0.03	$	(0.00	)	$	(0.02	)	$	(0.00	)
Diluted	$	0.03	$	(0.00	)	$	(0.01	)	$	(0.00	)

EMAV HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended

June 30, 2016 and 2015

(Unaudited)

Equity Instruments Issued to Non-Employees for Acquiring Goods or Services

Issuances of the Company's common stock or warrants for acquiring goods or services are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The measurement date for the fair value of the equity instruments issued to consultants or vendors is determined at the earlier of (i) the date at which a commitment for performance to earn the equity instruments is reached (a "performance commitment" which would include a penalty considered to be of a magnitude that is a sufficiently large disincentive for nonperformance) or (ii) the date at which performance is complete. However, situations may arise in which counter performance may be required over a period of time but the equity award granted to the party performing the service is fully vested and non-forfeitable on the date of the agreement. As a result, in this situation in which vesting periods do not exist as the instruments fully vested on the date of agreement, the Company determines such date to be the measurement date and will record the estimated fair market value of the instruments granted as a prepaid expense and amortize such amount to general and administrative expense in the accompanying statement of operations over the contract period. When it is appropriate for the Company to recognize the cost of a transaction during financial reporting periods prior to the measurement date, for purposes of recognition of costs during those periods, the equity instrument is measured at the then-current fair values at each of those interim financial reporting dates.

Non-Cash Equity Transactions

Shares of equity instruments issued for non-cash consideration are recorded at the estimated fair market value of the consideration granted based on the estimated fair market value of the equity instrument, or at the estimated fair market value of the goods or services received whichever is more readily determinable.

Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, " Income Taxes" . The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

EMAV HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended

June 30, 2016 and 2015

(Unaudited)

The Company follows the provisions of ASC 740-10, " Accounting for Uncertain Income Tax Positions ." When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

Recent Accounting Pronouncements

We qualify as an " emerging growth company " under the 2012 JOBS Act. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. As an emerging growth company, we can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period.

In February 2015, the FASB issued ASU 2015-02, "Consolidation: Amendments to the Consolidation Analysis" ("ASU 2015-02"). This standard update is intended to improve targeted areas of consolidation guidance for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. This ASU simplifies consolidation accounting by reducing the number of consolidation models and improves current U.S. GAAP by (1) placing more emphasis on risk of loss when determining a controlling financial interest; (2) reducing the frequency of the application of related-party guidance when determining a controlling financial interest in a variable interest entity; and (3) changing consolidation conclusions for public and private companies in several industries that typically make use of limited partnerships or variable interest entities. The amendments in ASU 2015-02 are effective for reporting periods beginning after December 15, 2015, with early adoption permitted. Entities can transition to the standard either retrospectively or as a cumulative effect adjustment as of the date of adoption. The Company has not adopted ASU 2015-02 as of June 30, 2016, and the adoption is not expected to have an impact on the Company's consolidated financial statements.

EMAV HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended

June 30, 2016 and 2015

(Unaudited)

In August 2014, the FASB issued Accounting Standards Update ("ASU") No. 2014-15, Presentation of Financial Statements Going Concern , which requires management to evaluate, at each annual and interim reporting period, whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date the financial statements are issued and provide related disclosures. ASU 2014-15 is effective for annual periods ending after December 15, 2016 and interim periods thereafter. The guidance is not expected to have a material impact on the Company's financial statements.

In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The amendments in this update simplify the presentation of deferred taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. These amendments may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The amendments are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. The guidance is not expected to have a material impact on the Company's financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 840), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments in this standard are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, for a public entity. Early adoption of the amendments in this standard is permitted for all entities and the Company must recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently in the process of evaluating the effect this guidance will have on its financial statements and related disclosures.

The Financial Accounting Standards Board issues Accounting Standard Updates to amend the authoritative literature in ASC. There have been a number of ASUs to date that amend the original text of ASC. The Company believes those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to the Company or (iv) are not expected to have a significant impact on the Company.

NOTE 3 – PROPERTY AND EQUIPMENT

Property and equipment consists of:

	June 30,			December 31,
	2016			2015

Property and equipment	$	7,583		$	7,583
Less: accumulated depreciation		(5,529	)		(4,265	)
Property and equipment, net	$	2,054		$	3,318

Depreciation expense for the three months and six months ended June 30, 2016 and 2015 was $632 and $1,264, compared to $1,792 and $4,656 for the same comparable periods in 2015.

EMAV HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended

June 30, 2016 and 2015

(Unaudited)

NOTE 4 – NOTES PAYABLE

Notes payable consist of:

	June 30, 2016			December 31, 2015

Stockholder note payable, original principal balance $40,000, unsecured, 5% stated annual interest, monthly interest only payments from September 18, 2014 to April 2015, 24 fixed monthly payments of $3,290 from May 18, 2015 to April 18, 2017. Original discount of $33,233 applied to normalize interest to 5% will be amortized over the loan term (P/Note 1)	$	73,233		$	73,233

Stockholder note payable, principal balance of $53,000, unsecured, interest bearing, monthly payment of $3,790 starting February 1, 2014, due April 1, 2016 (P/Note 2)		-			11,745

Note payable, principal balance of $75,000, unsecured, bearing 10% annual interest, due in full for unpaid principal and interest on or before June 30, 2016 (P/Note 3)		75,000			75,000
	$	148,233		$	159,978
Less: debt discount		(9,774	)		(15,639	)
Notes payable	$	138,459		$	144,339
Notes payable - current portion	$	138,459		$	144,339
Notes payable - long term portion	$	-		$	-

Debt discount - current portion	$	9,774		$	15,639
Debt discount - long term portion	$	-		$	-

EMAV HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended

June 30, 2016 and 2015

(Unaudited)

P/Note 1

On June 18, 2014, the Company executed a promissory note (the "P/Note 1") with a stockholder lender in the principal amount of $40,000. The terms of the P/Note 1 require the Company to make (a) monthly interest only payments (5% annual rate) starting on September 18, 2014; (b) twenty-four (24) payments of $3,290 each, including principal and interest, beginning May 18, 2015 through April 18, 2017, at which time the entire principal amount, plus any and all accrued interest shall be due and payable; and, (c) in the event of an investment or series of related investments of at least $5,000,000 before April 18, 2017, then the entire principal balance and all accrued and unpaid interest shall be due in full in addition to a $5,000 prepayment penalty. In connection with the issuance of P/Note 1, the Company has recorded a debt discount of $33,233 applied to normalize interest to 5% which will be amortized as interest expense over the life of the P/Note 1. The Company is in default in making its note payments as of June 30, 2016 and the note holder has not made a demand for the past due payments. The Company has recognized interest expense of $2,932 and $5,865 for amortization of debt discount related to P/Note 1 for the three months and six months ended June 30, 2016, and $2,932 and $5,865 for the same comparable periods in 2015. The unamortized portion of debt discount was $9,774 and $15,639 at June 30, 2016 and December 31, 2015, respectively. In addition, the Company has recorded an interest expense of $500 and $643 for the three months and six months ended June 30, 2016, and $487 and $987 for the same comparable periods in 2015. The Company paid $841 in interest payments for the six months ended June 30, 2016. Accrued interest on P/Note 1 was $2,434 and $2,632 at June 30, 2016 and December 31, 2015, respectively.

P/Note 2

On May 23, 2013, the Company executed a promissory note (the "P/Note 2") with a stockholder in the principal amount of $53,000. The terms of the P/Note 2 required the Company to make (a) a principal payment of $3,000 on or before June 6, 2013, and (b) fifteen (15) monthly payments of $3,790 each, including principal and interest, beginning February 2014 through April 2015, at which time the entire principal amount, plus any and all accrued interest was due and payable. On March 30, 2015, the Company and the shareholder mutually agreed to extend the due date of payment of the P/Note 2 to April 1, 2016. During the six months ended June 30, 2016, the Company made note payments of principal of $11,745 and interest payments of $7,114. The Company has made both principal and accrued interest in full settlement of P/Note 2. The Company has recorded interest expense of $920 and $920 on P/Note 2 for the three months and six months ended June 30, 2016, and $920 and $1,829 for the same comparable periods in 2015. The Company paid $7,114 in interest payments for the six months ended June 30, 2016. Accrued interest on P/Note 2 was $0 and $6,194 at June 30, 2016 and December 31, 2015, respectively.

In conjunction with the execution of P/Note 2, the Company agreed to issue 100,000 shares of restricted common stock at its fair value of $30,000 to the stockholder on May 23, 2014, as an additional consideration and not as additional interest. In connection with the issuance of the common stock pursuant to P/Note 2, the Company recorded a debt discount in the amount of $30,000 which was being amortized to interest expense over the life of the Note. The Company recorded interest expense of $0 and $0 as the amortization of debt discount related to P/Note 2 for the three months and six months ended June 30, 2016, and $0 and $4,091 for the same comparable periods in 2015. The net book value of the unamortized portion of the debt discount was $0 at both June 30, 2016 and December 31, 2015, respectively.

EMAV HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended

June 30, 2016 and 2015

(Unaudited)

P/Note 3

On December 22, 2015, the Company executed a promissory note (P/Note 3) to pay a third party a commitment fee of $50,000 and legal fees of $25,000 for a total consideration of $75,000 in connection with an offering of common stock. The third party agreed to commit to purchase up to $5 million worth of common stock over a period of time terminating on the earlier of (i) 24 months from the date on which the agreement was executed and delivered by the Company and the third party, or (ii the date on which the third party has purchased the aggregate maximum purchase of $5 million. The promissory note bears an interest at the rate of 10% per annum. Payment of all amounts due under P/Note 3, principal and interest, is due on or before June 30, 2016. The Company is in default of the terms of P/Note 3 and the note holders has not made a demand for the past due payments. The Company has recorded the principal amount of the promissory note of $75,000 as a deferred asset upon execution of the promissory note and which will be offset as fee for capital raise against the additional paid in capital when capital is raised by the third party. If unsuccessful, the amount will be charged to expense. As of the date of this filing the agreement is still valid. The Company has recorded an interest expense of $1,870 and $3,740 for the three months and six months ended June 30, 2016. Accrued interest on P/Note 3 was $3,925 and $185 at June 30, 2016 and December 31, 2015, respectively.

The Company has recorded total interest expense including amortization of debt discount, on P/Note 1, P/Note 2 and P/Note 3 of $5,302 and $11,167 for the three months and six months ended June 30, 2016, and $3,713 and $12,769 for the same comparable periods in 2015. The Company has made interest payments of $7,955 and $626 for the six months ended June 30, 2016 and 2015, and recorded accrued interest of $6,358 and $9,012 on P/Note 1, P/Note 2 and P/Note 3 as of June 30, 2016 and December 31, 2015, respectively.

NOTE 5 – CONVERTIBLE NOTES PAYABLE

Convertible notes payable consist of:

	June 30,			December 31,
	2016			2015

Convertible note payable to a third party, principal balance of $50,000, secured, bearing interest of 12%, due on May 17, 2016 (CPN 1 Note)	$	12,538		$	50,000

Convertible note payable to a third party, principal balance of $86,000, secured, bearing annual interest at 6%, due on January 28, 2017 (CPN 2 Note)		86,000			-

Convertible note payable to a third party, principal balance of $86,000, secured, bearing annual interest at 6%, due on January 28, 2017 (CPN 3 Note)		86,000			-
		185,538			50,000
Less: debt discounts		(121,762	)		(27,426	)
Convertible notes payable, net	$	62,776		$	22,574
Less: current portion	$	(62,776	)	$	(22,574	)
Convertible notes payable, non-current	$	-		$	-

EMAV HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended

June 30, 2016 and 2015

(Unaudited)

Convertible Promissory Note (the "CPN 1 Note")

On August 17, 2015, the Company received $45,000 from a third party investor against a $50,000 Convertible Promissory Note (the "CPN 1" Note) executed on August 17, 2015. The CPN 1 Note bears an interest rate of 10% per annum. The maturity date of the CPN 1 Note is May 17, 2016 and is the date upon which the principal sum of this promissory note, as well as any unpaid interest and other fees, shall be due and payable. The lender has the right at any time after the effective date, at its election, to convert all or part of the outstanding and unpaid principal sum and accrued interest into shares of fully paid and non-assessable shares of common stock of the Company as per the conversion formula: Number of shares receivable upon conversion equals the dollar conversion amount divided by the conversion price. The conversion price is the lessor of 55% of the lowest trade price in the 25 trading days previous to the conversion date.

In connection with the issuance of the CPN 1 Note, the Company recorded an original issuance debt discount ("OID") in the amount of $5,000 which will be amortized to interest expense over the term of the draw of nine months. In accordance with ASC 815, the Company recognized a debt discount related to the bifurcated embedded conversion option derivative liability in the amount of $50,000 which will be amortized to interest expense over the term of the draw and an initial change in fair value of $3,307 for a total initial embedded conversion option liability of $53,307. On February 17, 2016, the Company issued 108,403 shares of its common stock to the third party investor pursuant to a conversion notice under the terms of CPN 1 Note. Pursuant to the conversion notice, the investor converted $12,521 of the principal and interest of CPN 1 Note into 108,403 shares of our common stock valued at $0.1155 per share. On March 14, 2016, the Company issued 952,203 shares of its common stock to the third party investor pursuant to a conversion notice under the terms of CPN 1 Note. Pursuant to the conversion notice, the investor converted $5,237 of the principal of CPN 1 Note into 952,203 shares of our common stock valued at $0.0055 per share. On April 29, 2016, the Company issued 1,432,999 shares of its common stock to the third party investor pursuant to a conversion notice under the terms of CPN 1 Note. Pursuant to the conversion notice, the investor converted $19,704 of the principal of CPN 1 Note into 1,432,999 shares of our common stock valued at $0.0165 per share.

For the three months and six months ended June 30, 2016, the Company has recorded interest expense of $469 and $1,544 on the CPN 1 Note, interest expense of $741 and $2,426 related to the amortization of the OID and $8,148 and $25,000 related to the amortization of the embedded conversion option liability discount and change in fair value of embedded conversion option liability of $40,756. The CPN 1 Note balance was $12,538 and $50,000 at June 30, 2016 and December 31, 2015, respectively, embedded conversion option liability of CPN 1 Note was $33,056, unamortized debt discount was $0 and $5,000, unamortized embedded conversion option liability discount was $0 and $25,000, and accrued interest of $3,393 and $1,849 at June 30, 2016 and December 31, 2015, respectively.

EMAV HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended

June 30, 2016 and 2015

(Unaudited)

Convertible Promissory Note (the "CPN 2 Note")

On February 04, 2016, the Company closed and funded a financing transaction by entering into a Securities Purchase Agreement (the " Purchase Agreement ") with a third party (the "Investor"). Pursuant to the Purchase Agreement, the Investor purchased from the Company a Convertible Promissory Note (the "CPN 2 Note", and together with the Purchase Agreement, the " Transaction Documents ") in the aggregate principal amount of $86,000 (the " Principal Amount "), and the Company received net proceeds of $74,900 on February 4, 2016.

The Principal Amount bears interest at 6% per annum. All outstanding principal and accrued interest on the CPN 2 Note is due and payable on the maturity date, which is January 28, 2017. Any amount of principal or interest that is due under the CPN 2 Note, which is not paid by the maturity date, will bear interest at the rate of 24% per annum until it is paid. Further, the Company is obligated to reduce the Principal Amount by 50% on or before July 28, 2016. Should the Company fail to do so, then outstanding principal amount will be increased by 200%. The Principal Amount was doubled due to the failure to timely make the payment.

The Note is convertible into shares of the Company's common stock at any time at the discretion of the Investor at a conversion price per share equal to the lesser of: (a) the closing price of the Common Stock on the day before the conversion; or, (b) 50% of the lowest trading price for the common stock during the 30-days of trading ending on the latest complete trading day prior to the date of conversion. The conversion price is subject to adjustment for stock splits, reverse stock splits, stock dividends and other similar transactions and subject to the terms of the Transaction Documents. The Company agreed to reserve that number of shares of common stock equal to 70% of our authorized shares of common stock not otherwise issued.

The CPN 2 Note may be repaid in whole at any time. The repayment amount is subject to a premium on the outstanding principal balance of 150%. If the Company fails to meet its obligations under the terms of the CPN 2 Note, the promissory note shall become immediately due and payable and subject to penalties provided for in the CPN 2 Note.

In connection with the issuance of the CPN 2 Note, the Company recorded an original issuance debt discount ("OID") in the amount of $11,100 which will be amortized to interest expense over the term of the draw of 357 days. In accordance with ASC 815, the Company recognized a debt discount related to the bifurcated embedded conversion option derivative liability in the amount of $86,000 which will be amortized to interest expense over the term of the draw and an initial change in fair value of $10,995 for a total initial embedded conversion option liability of $96,995. For the three months and six months ended June 30, 2016, the Company has recorded interest expense of $1,286 and $2,078 on the CPN 2 Note, interest expense related to the amortization of the OID discount of $2,829 and $4,571, interest expense related to the amortization of the embedded conversion option liability discount of $21,922 and $35,412, and change in fair value of embedded conversion option liability of $232,356. At June 30, 2016, the principal balance of CPN 2 Note was $86,000, embedded conversion option liability of CPN 2 Note was $318,356, unamortized OID discount was $6,529, unamortized embedded conversion option liability discount was $50,588, and accrued interest was $2,078.

EMAV HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended

June 30, 2016 and 2015

(Unaudited)

Convertible Promissory Note (the "CPN 3 Note")

On February 29, 2016, the Company closed and funded a financing transaction by entering into a Securities Purchase Agreement (the " Purchase Agreement ") with the same third party (the "Investor") who also executed CPN 2 Note. Pursuant to the Purchase Agreement, the Investor purchased from the Company a Convertible Promissory Note (the "CPN 3 Note"), and together with the Purchase Agreement, the " Transaction Documents ") in the aggregate principal amount of $86,000 (the " Principal Amount "), and the Company received net proceeds of $74,900 on February 29, 2016.

The Principal Amount bears interest at 6% per annum. All outstanding principal and accrued interest on the CPN 3 Note is due and payable on the maturity date, which is March 1, 2017. Any amount of principal or interest that is due under the CPN 3 Note, which is not paid by the maturity date, will bear interest at the rate of 24% per annum until it is paid. Further, the Company is obligated to reduce the Principal Amount by 50% on or before July 28, 2016. Should the Company fail to do so, then outstanding principal amount will be increased by 200%. The Principal Amount was doubled due to the failure to timely make the payment.

The CPN 3 Note may be repaid in whole at any time. The repayment amount is subject to a premium on the outstanding principal balance of 150%. If the Company fails to meet its obligations under the terms of the CPN 2 Note, the promissory note shall become immediately due and payable and subject to penalties provided for in the CPN 3 Note.

In connection with the issuance of the CPN 3 Note, the Company recorded an original issuance debt discount ("OID") in the amount of $11,100 which will be amortized to interest expense over the term of the draw of one year. In accordance with ASC 815, the Company recognized a debt discount related to the bifurcated embedded conversion option derivative liability in the amount of $86,000 which will be amortized to interest expense over the term of the draw and an initial change in fair value of $11,734 for a total initial embedded conversion option liability of $97,734. For the three months and six months ended June 30, 2016, the Company has recorded interest expense of $1,286 and $1,725 on the CPN 3 Note, interest expense related to the amortization of the OID discount of $2,767 and $3,710, interest expense related to the amortization of the embedded conversion option liability discount of $21,441 and $28,745, and change in the fair value of embedded conversion option liability for six months ended June 30, 2016 of $236,204. At June 30, 2016, the principal balance of CPN 3 Note was $86,000, embedded conversion option liability on CPN 3 Note was $322,204, unamortized original issuance debt discount was $7,390, unamortized embedded conversion option liability discount was $57,255, and accrued interest was $1,725.

EMAV HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended

June 30, 2016 and 2015

(Unaudited)

The Company has recorded a total interest expense of $3,042 and $5,347, on the principal balances of CPN 1 Note, CPN 2 Note and CPN 3 Note, for the three months and six months ended June 30, 2016 and $0 for the same comparable periods in 2015. In addition, the Company has recorded interest expense for the three months and six months ended June 30, 2016, relating to (i) amortization of OID discount of $6,338 and $10,707, and (ii) amortization of the embedded conversion option liability discount of $51,511 and $89,157. The Company recorded interest expense of $0 relating to the above for the three and six months ended June 30, 2015. The Company has recorded accrued interest on all three convertible notes of $7,196 and $1,849 as of June 30, 2016 and December 31, 2015, respectively.

NOTE 6 - DERIVATIVE FINANCIAL INSTRUMENTS

Under the provisions of ASC 815-40, convertible instruments issued by the Company qualify for derivative treatment due to the variable conversion formula (Note 5). The embedded conversion features of the convertible note is bifurcated and recorded as a liability which is revalued at fair value each reporting date. If the fair value of the embedded conversion feature exceeds the face value of the related debt, net of other discounts, the excess is recorded as a change in fair value on the issuance date. Embedded conversion features are valued at their fair value, rather than by the intrinsic value method.

The Company calculated the estimated fair values of the liabilities for embedded conversion feature at June 30, 2016 with the Black-Scholes option pricing model using the closing price of the Company's common stock at each respective date and the ranges for volatility, expected term, and risk free interest indicated in the table below. As a result, the Company recorded a change in the fair value of the liabilities for embedded conversion option derivative instruments for the six months ended June 30, 2016 of $509,315 which was included in Other Income (Expenses) (See Note 2 Fair Value Measurements) in the accompanying Condensed Consolidated Statements of Operations.

The fair market value of the Company's common stock on February 4, 2016, February 29, 2016, March 31, 2016, April 29, 2016 and June 30, 2016 was $0.30, $0.21, $0.04, $0.05 and $0.06 per share, respectively.

EMAV HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended

June 30, 2016 and 2015

(Unaudited)

Embedded Conversion Options

		Black-Scholes Model Assumptions
		During The Six Months Ended June 30, 2016
Annualized volatility		82.58% - 365.16%
Expected term		0.00 – 1.00 year
Risk free interest rate		0.32% - 0.52%

A significant factor which impacted the fair market value of the derivative liability was the significant difference between the fair market value of the Company's common stock of $0.06 per share and the conversion price of $0.0165 per share at June 30, 2016. The conversion price is based upon the lowest trade within the previous 25 days multiplied by 55% from the fair value date ($0.03X55%= $0.0165). Thus, the valuation is highly dependent upon the price of these trades and the fair market value of the Company's common stock at each measurement date.

NOTE 7 – RELATED PARTY TRANSACTIONS

In April 2010, the Company entered into a verbal agreement with its executive director for providing business consulting and marketing services to the Company. No fixed compensation was agreed at the time of the verbal agreement. On November 14, 2014, the executive director resigned from his position and entered into a separation agreement which provided for, among other covenants and conditions, a mutual release of all claims between the Company and its executive director. The executive director was previously allotted 13,000,000 shares of the Company's common stock. Pursuant to the separation agreement, the executive agreed to retain 1,000,000 shares of common stock, and the Company had the sole discretion to determine the disposition of the remaining 12,000,000 shares of common stock. The Company has allocated these 12,000,000 shares of common stock as follows: (i) 6,125,000 shares of common stock have been reallocated to other persons and the Company has recorded an expense of $3,062,500 upon their issuance, (ii) 5,000,000 shares of common stock were cancelled and returned to the status of authorized and unissued shares, and (iii) the remaining 875,000 shares of common stock to remain issued and held in treasury as of June 30, 2016 (See Note 9). The Company made no cash payments to the executive director for consulting fees for the three months and six months ended June 30, 2016 and 2015, respectively.

The Company has engaged an entity owned by the Chief Executive Officer/Director ("Officer") of the Company to provide business advisory, consulting, and legal services. The Company has recorded and paid legal and professional fees of $1,000 and $39,000 to this entity for the three months and six months ended June 30, 2016 and $2,500 and $37,000 for the same comparable periods in 2015. Payments are made to this entity as the funds are available. The Company is indebted to this entity $12,500 and $0 as of June 30, 2016 and December 31, 2015, respectively. In addition, the Company has made no payments and $2,300 in payments to the Officer's family members for the three months and six months ended June 30, 2016 for performing services for the Company. No payments were made to the Officer's family members for performing services for the three months and six months ended June 30, 2015.

The Officer has occasionally provided short term advances to the Company for its working capital needs. The short term advances are non-interest bearing, unsecured and due on demand. The Company is indebted to the Officer $22,500 due and payable as of June 30, 2016 and December 31, 2015, respectively.

EMAV HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended

June 30, 2016 and 2015

(Unaudited)

NOTE 8 – COMMITMENTS AND CONTINGENCIES

Settlement of litigation

The Company entered into an agreement for public relations services (the "Agreement") with an unrelated third party ("DLC") in September 2010. The Company disputed the quality of the services rendered and failed to tender final payment under the Agreement. DLC initiated legal action against the Company in January 2012 for collection under the Agreement. The Company did not have the resources to contest the action, so a default judgment was entered against the Company in favor of DLC in July 2012 in the amount of $14,425. Thereafter, DLC sought to collect on the judgment, and the total amount claimed by DLC grew to over $25,000 as DLC was entitled to collect attorney's fees under the Agreement.

In October 2013, the entire Agreement with DLC was negotiated and settled, requiring the Company to pay DLC $3,000 in November 2013 and $1,000 per month for the next 12-month period. The Company agreed not to contest DLC's ownership of 80,000 shares of the Company's stock. As of June 30, 2016 and December 31, 2015, the remaining liability on the settlement of $7,000 is included in accounts payable in accompanying consolidated financial statements. The Company plans on paying DLC for the months of May 2014 through November 2014, which DLC has yet to demand.

Legal Costs and Contingencies

In the normal course of business, the Company incurs costs to hire and retain external legal counsel to advise it on regulatory, litigation and other matters. The Company expenses these costs as the related services are received.

If a loss is considered probable and the amount can be reasonable estimated, the Company recognizes an expense for the estimated loss. If the Company has the potential to recover a portion of the estimated loss from a third party, the Company makes a separate assessment of recoverability and reduces the estimated loss if recovery is also deemed probable.

NOTE 9 – STOCKHOLDERS' EQUITY

The Company's capitalization at June 30, 2016 was 300,000,000 authorized common shares with a par value of $0.001, and 10,000,000 authorized preferred shares with a par value of $0.001.

Common stock

On February 17, 2016, the Company issued 108,403 shares of its common stock to a third party investor pursuant to a conversion notice under the terms of a convertible promissory note. Pursuant to the conversion notice, the investor converted $12,521 of the principal and interest of the convertible promissory note into 108,403 shares of its common stock valued at $0.1155 per share.

EMAV HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended

June 30, 2016 and 2015

(Unaudited)

On March 14, 2016, the Company issued 952,203 shares of its common stock to the third party investor pursuant to a conversion notice under the terms of convertible promissory note . Pursuant to the conversion notice, the investor converted $5,237 of the principal of convertible promissory note into 952,203 shares of our common stock valued at $0.0055 per share.

On April 29, 2016, the Company issued 1,432,999 shares of its common stock to the third party investor pursuant to a conversion notice under the terms of convertible promissory note . Pursuant to the conversion notice, the investor converted $19,704 of the principal of convertible promissory note into 1,432,999 shares of our common stock valued at $0.0165 per share.

Warrants

On April 14, 2010, the Company granted three individuals, warrants to purchase 2,500,000 shares of common stock at an exercise price of $0.25 per share as compensation in connection with the individuals providing introductions for raising capital for the Company. The warrants have a six year term and expire in April 2016. The fair value of 2,500,000 warrants at the original issue date was estimated to be $1,077,927 using a Black-Scholes option pricing model with an expected life of 6 years, a risk free interest rate of 2.96%, a dividend yield of 0%, and an expected volatility of 100%. The expected volatility was estimated to be 100% since the Company's stock is not traded and no historical volatility data is available. As these services were provided as part of the Company's equity funding, the value of the warrants were recorded within equity as part of the accounting for the related equity transactions. The warrants expired on April 14, 2016. There have been no other grants of warrant instruments through June 30, 2016.

The Company has not established a stock option plan nor has issued any stock options through June 30, 2016.

As a result of all common stock issuances and cancellations, the total common shares issued at June 30, 2016 were 50,274,070 of which 49,399,070 shares were outstanding, and the remaining 875,000 shares were held in treasury.

Preferred Stock

At June 30, 2016, the Company had no shares of preferred stock issued or outstanding.

NOTE 10 - CONCENTRATION OF CREDIT RISK

The Company maintains its cash in bank and financial institution deposits that at times may exceed federally insured limits. The Company has not experienced any losses related to this in any such accounts. The Company's bank balances did not exceed FDIC insured amounts as of June 30, 2016 and December 31, 2015, respectively.

EMAV HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended

June 30, 2016 and 2015

(Unaudited)

NOTE 11 – SUBSEQUENT EVENTS

Management has evaluated subsequent events and transactions that occurred through the date and time our financial statements were available to be issued as follows:

On August 4, 2016, the Company issued 375,000 shares of its common stock to a third party investor pursuant to a conversion notice under the terms of CPN1 Note. Pursuant to the conversion notice, the investor converted $3,600 of the principal of CPN1 Note into 375,000 shares of common stock valued at $0.0096 per share.

On August 17, 2016, the Company closed and funded a financing transaction by entering into a Subscription Agreement (the "Subscription Agreement") with a third party (the "Third Party"). Pursuant to the Subscription Agreement, the Third Party purchased from the Company a Convertible Debenture (the "Debenture") in the aggregate Principal Amount of $200,000. On August 18, 2016, the Company received net cash proceeds of $150,000 from the Third Party, and paid off the total outstanding principal balance and accrued interest to date, on CPN 1 Note and made a payment of $100,000 to reduce the amount outstanding on CPN 2 Note. The Principal Amount bear interest at the rate of 10% per annum. All outstanding principal and accrued interest on the Debenture is due and payable on the maturity date of July 29, 2018 or convertible at any time at the Third Party's option at $0.02 per common share. Under the same transaction, the Company also issued to the Third Party a Warrant to purchase 300,000 shares of common stock at an exercise price of $0.08 per share. The Warrant has a five year term and expires on August 14, 2021. The Warrant can also be exercised on a cashless basis. The Debentures and the Warrant is issued to the Third Party in a transaction not registered under. The Company is still determining the impact of this transaction on the financial statements.

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

All references to "Holdings", "we", "our," "us" and the "Company" in this Item 2 refer to EMAV Holdings, Inc. and our wholly owned subsidiary, Electric Motors and Vehicles Company ("EMAV").

The discussion in this section contains forward-looking statements. These statements relate to future events or our future financial performance. We have attempted to identify forward-looking statements by terminology such as "anticipate," "believe," "can," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "should," "would" or "will" or the negative of these terms or other comparable terminology, but their absence does not mean that a statement is not forward-looking. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, which could cause our actual results to differ from those projected in any forward-looking statements we make. Several risks and uncertainties we face are discussed in more detail under "Risk Factors" in the 2015 Annual Report filed with the Securities and Exchange Commission on April 4, 2016. You should, however, understand that it is not possible to predict or identify all risks and uncertainties and you should not consider the risks and uncertainties identified by us to be a complete set of all potential risks or uncertainties that could materially affect us. You should not place undue reliance on the forward-looking statements we make herein because some or all of them may turn out to be wrong. We undertake no obligation to update any of the forward-looking statements contained herein to reflect future events and developments, except as required by law. The following discussion and analysis of our financial condition and results of operations should be read together with the audited consolidated financial statements and accompanying notes and the other financial information appearing in the 2015 Annual Report filed with the Securities and Exchange Commission on April 4, 2016 and elsewhere in this report. The analysis set forth below is provided pursuant to applicable Securities and Exchange Commission regulations and is not intended to serve as a basis for projections of future events.

Overview

Company Overview

The Company was started in March 2010 with the intent of bringing to market rugged electric vehicles. The business was initially focused on developing a relationship with the Jeep brand as that was the desired model to use for EMAV's electric vehicles. EMAV designed a trailer/camper in conjunction with the MOPAR division of Jeep. The camper was approved as the first camper to be branded as a Jeep. EMAV sold the Jeep Camper directly through dealerships in 2010 and 2011. EMAV abandoned its involvement in the project in 2011 due to slow sales and the lack of financial resources to support marketing for the program.

Through 2011 and 2012, EMAV focused its efforts on electric vehicle technology to be used in vehicles it planned to introduce. EMAV also developed the Power Regeneration Unit ("PRU"). It is a small camper designed to be towed behind an electric vehicle and is designed to significantly increase the range of the electric vehicle. EMAV has not commercialized the PRU and has not sold any units of the PRU. It is anticipated that at some time in the future the PRU may become one of the products offered by EMAV.

In 2013, EMAV once again focused its efforts on bringing to market a rugged electric vehicle. EMAV is described as a new car company which we propose to operate out of (i) a Jeep dealership we propose to acquire; and, (ii) an assembly facility we propose to lease. EMAV will design, assemble, and sell premium rugged sport adventure vehicles ("SAVs") to consumers, with an emphasis on offering electric versions, in addition to commercial products for the construction, fleet, military, homeland security and related industries. EMAV intends to acquire a Jeep automotive dealership through which it will conduct certain aspects of its operations, and which will also afford EMAV access to Jeep vehicles which will serve as the platform/foundation for its vehicle sales. The automotive industry has invested heavily in electric vehicle technology and most manufacturers are now introducing electric vehicles as part of their product line. In addition, a number of new companies have emerged which exclusively manufacture and sell electric vehicles. EMAV intends to be unique in the marketplace in that its proposed signature vehicle, the ES , will be based upon an existing iconic vehicle, the 4-door Jeep Wrangler.

On December 27, 2013, we acquired all of the issued and outstanding common shares of EMAV in exchange for issuing 38,840,525 shares of our common stock. In addition, we assumed the obligations of EMAV to issue common shares pursuant to all outstanding warrants. Following the closing of the merger, EMAV became our wholly-owned subsidiary and the combined entity solely engaged in EMAV's business. EMAV was the acquirer for financial reporting purposes and EMAV Holdings, Inc. was the acquired company. The merger was accounted for as a reverse-merger and recapitalization. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements prior to the merger are those of EMAV and are recorded at the historical cost basis, and the consolidated financial statements after completion of the merger include the assets and liabilities of the Company and EMAV, and the historical operations of EMAV and operations of the combined company from the closing date of the merger. Subsequent to the merger, our operations are consolidated with the operations of EMAV.

In late 2014, we initiated a plan to acquire auto dealerships in addition to our electric vehicle business. We propose to engage industry experts to enable us to identify, acquire, operate, and integrate auto dealerships. Our roll-up strategy is designed to not compete with the larger acquirers recently entering into this same space. We propose to acquire mid-market, smaller, profitable dealerships often overlooked by the private equity groups and public companies which are now actively pursuing acquisitions in this space. We have identified and initiated discussions with a number of experienced professionals to manage and operate this segment of our business.

Electric Vehicles

Our wholly-owned subsidiary, Electric Motors and Vehicles Company, Inc. ("EMAV"), is a new car company. It is anticipated that the sales, marketing, and administrative functions for our commercial electric vehicles will be operated out of the Detroit, Michigan area. All other functions, including though not limited to all assembly operations; sales and marketing for our consumer sales; and, all other general corporate administrative functions will be conducted in a facility which location we have yet to determine. We have identified suitable properties in a number of locations though we have not yet leased or acquired or made any formal arrangements for such lease or acquisition of a facility.

Consumer Vehicles

EMAV will design, assemble, and sell premium rugged sport adventure vehicles ("SAVs"), with an emphasis on offering electric versions. EMAV intends to acquire a Ford and a Jeep automotive dealership through which it will conduct certain aspects of its operations, and which will also afford EMAV access to Ford and Jeep vehicles which will serve as the platform/foundation for its vehicle sales. The automotive industry has invested heavily in electric vehicle technology and most manufacturers are now introducing electric vehicles as part of their product line to the consumer public. In addition, a number of new companies have emerged which exclusively manufacture and sell electric vehicles. EMAV intends to be unique in the marketplace in that its proposed signature vehicle (the " ES") , will be based upon an existing iconic vehicle; the 4-door Jeep Wrangler.

EMAV proposes to design, develop, manufacture, and sell premium rugged electric vehicles built from the base chassis of the 4-door Jeep Wrangler, and commercial use plug-in hybrid electric vehicles on the chassis of the Ford F-150. We will be a low volume vehicle design, engineering, and manufacturing company focusing on premium rugged electric vehicles. Our initial product offering will focus on the consumer market.

The EMAV ES intends to leverage the iconic design of the 4-door Jeep Wrangler and combine that with aerodynamic body modifications and styling and significant interior comfort and technology upgrades to create its own brand identity. The EMAV ES will maintain the rugged, cool exterior appearance of a Jeep, while the interior will be upgraded with luxury features and technology such as continuous online information access from a 15-17 inch interactive touch screen monitor. The electric 4-wheel drive drive-train is intended to deliver a new premium high performance standard, and with zero emissions the ES will be in a class by itself. EMAV intends to create and dominate the Sport Adventure Vehicle market by delivering a luxurious, comfortable, cool driving experience which is environmentally conscious. At this time EMAV has yet to produce a vehicle for sale and has not yet completed an electric vehicle using the 4-door Jeep Wrangler as its platform.

This quarterly report contains additional trade names, trademarks, and service marks of others, which are the property of their respective owners. We do not intend our use or display of other companies' trade names, trademarks, or service marks to imply a relationship with, or endorsement or sponsorship of us by, these other companies.

We plan to begin shipments of our signature vehicle, the EMAV ES, in the Spring of 2017. In order to do so we must raise sufficient capital so that we can build sales/demonstration models for placement at Jeep dealerships and promote the vehicle through a marketing campaign. Again, we need to do raise sufficient capital so that we can build sales/demonstration models and promote the vehicle through a marketing campaign. We believe we will need to raise at least $2,000,000 in order to build five demonstration sales models. As of the filing of this quarterly report, we have not yet produced any vehicles. We will be adapting the platform architecture of the 4-door Jeep Wrangler to develop our EMAV ES. This all electric vehicle is designed to create a new niche in the automotive industry: a luxury/premium all electric SUV, which we refer to as a premium Sport Adventure Vehicle.

We propose to sell our vehicles directly through auto dealership we plan to acquire, as well as on the internet through the dealerships, and directly to commercial users. We also propose to sell our vehicles directly through selected dealerships we don't own throughout North America, and then globally. We may also lease small retail spaces in high-traffic areas (such as shopping malls and retail areas of large metropolitan areas) in order to highlight and advertise our product offerings. We will deploy a build-on-demand model so as to keep finished inventory low. Similar to the manner in which many large laptop manufacturers operate, we will maintain low levels of parts and platform vehicles, and then build the vehicle "to order" when our customer places the order. We believe that this approach provides us with a competitive advantage as compared to incumbent automobile manufacturers.

The battery pack and electric power train system we propose to purchase from a third party vendor should enable us to deliver competitive range capability at what we believe will be a compelling battery cost per kilowatt-hour. Our battery packs will use commercially available lithium-ion battery cells. Our proprietary energy management software and system should maximize the energy efficiency of our vehicles. Our proprietary technology includes charge balancing systems, battery engineering, and software and electronics management systems necessary to manage battery and vehicle performance.

We believe that our vehicles will offer consumers a compelling alternative to other electric vehicles, as well as to similar internal combustion engine or hybrid electric vehicles. We expect our electric vehicles will have a lower relative maintenance costs than hybrid, plug-in hybrid, or internal combustion engine vehicles due to fewer moving parts and the absence of certain components, including oil, oil filters, spark plugs, and engine valves. Additionally, government incentives that are currently available can reduce the cost of ownership even further.

Our approach and business model of leveraging a successful and iconic brand and its dealership network will enable us to succeed where so many other electric vehicle manufacturers have failed. We have not created a new vehicle in search of a market. Rather, we have started with a vehicle which has documented and growing demand and will transform it into a premium electric vehicle. We do not require the hundreds of millions of dollars other electric vehicle manufacturers required to start from the ground up. We will not have to raise that level of capital and we will be able to avoid the design, performance, and marketing issues which doomed most early electric vehicle companies.

Commercial Vehicles

We also plan to enter the market for commercial applications and the military, homeland protection, civil, and law enforcement markets. By using a single platform for both commercial and consumer use (the 4-Door Jeep Wrangler and the Ford F-150), we will leverage economies of scale and operating efficiencies to simultaneously produce consumer and commercial vehicles from a single facility. Our signature commercial vehicles will consist of two vehicles:

EMAV Power Station : Designed to replace noisy and polluting towed generators, the vehicle will be the power plant. Non-polluting and silent, the Power Station is ideal for use in myriad industries and applications, such as construction, military, homeland defense, and disaster response.

Fleet, delivery, multi-purpose vehicle : The 4-door Jeep Wrangler has traditionally has been under used in this fast-growing market. Our vehicle will offer a variety of drive-trains, each specifically suited for its specific use and intended demands of the industry.

Acquisition of Car Dealerships

Our engagement of and association with industry experts should give us the ability to identify, acquire, operate, and integrate auto dealerships. Our roll-up strategy is designed to not compete with the larger acquirers recently entering into this same space. We propose to acquire mid-market, smaller, profitable dealerships often overlooked by the private equity groups and public companies which are now actively pursuing acquisitions in this space. We have identified and initiated discussions with a number of experienced professionals to manage and operate this segment of our business. These individuals are auto industry veterans and have owned and operated car dealerships for many years. We believe our first dealership can be acquired for apporximately $1,000,000. Subsequent acquisitions will likely to be more expensive, and likely not less than $2,500,000.

EMAV has generated limited revenues from product sales, and no revenue from product sales during the three months and six months ended June 30, 2016 and 2015, and for years ended December 31, 2015, 2014 and 2013. To date, we have funded our operations through issuances of debt, convertible debt and the private sale of equity securities. We do not expect to generate revenue from product sales for at least the next twelve months.

We have an accumulated deficit of $6,080,830 as of June 30, 2016. Our net income for the three months ended June 30, 2016 was $1,506,946 and net loss for six months ended June 30, 2016 was $782,183 as compared to a net loss of $62,251 and $222,678 for the same comparable periods in 2015. Substantially all of our operating losses in the six months ended June 30, 2016 resulted from the interest expense on convertible notes payable and change in fair value of embedded conversion option liability associated with convertible debt.

We expect to continue to incur significant expenses and increasing operating losses for at least the next two to four years. In the near term, we anticipate that our expenses will increase as we:

•	complete our initial vehicle offering;

•	enter into production and marketing of our initial vehicle offering;

•	continue our development additional vehicle offerings;

•	maintain, expand and protect our intellectual property portfolio; and

•	provide general and administrative support for our operations.

To fund our future operations and acquisitions of car dealerships, we will need to raise additional capital. The amount and timing of future funding requirements will depend on many factors, including the timing and results of our ongoing development efforts, the potential expansion of our current development programs, potential new development programs, and related general and administrative support. We anticipate that we will seek to fund our operations through public or private equity or debt financings or other sources. We cannot be certain that anticipated additional financing will be available to us on favorable terms, or at all.

Financial Operations Overview

Revenue

We have not earned revenues from product sales for the three months and six months ended June 30, 2016 and 2015, respectively. We do not expect to earn revenues from product sales for at least the next twelve months. We may never generate revenues from product sales as we may never succeed in selling our initial vehicle or commercializing any other products or vehicles.

Operating Expenses

Operating expenses for the three months and six months ended June 30, 2016 were $39,318 and $156,492 compared to $58,538 and $209,909 for the same comparable periods in 2015. Operating expenses for the three months and six months ended June 30, 2016 decreased by $19,220 and $53,417 primarily due to the reduction in general and administrative expense and depreciation expense as discussed below.

General and administrative expense (G&A) was $38,686 and $155,228 for the three months and six months ended June 30, 2016 as compared to $56,746 and $205,253 for the same comparable periods in 2015. G&A expense for the three months and six months ended June 30, 2016 decreased by $18,060 and $50,025 over 2015 primarily due to the (a) decrease in consulting expenses related to development plans of our business and initial design of our vehicle, (b) decrease in investor relations expense, (c) reduction in professional fees for auditing, tax and legal services, (d) increase in transfer agent fees, and (e) reduction in travel expenses. We expect that general and administrative expenses will increase materially as we operate as a public company. These increases will likely to include salaries and related expenses, legal and consulting fees, accounting and audit fees, director fees, increased directors' and officers' insurance premiums, fees for investor relations services and enhanced business and accounting systems, and other costs.

Depreciation expense for the three months and six months ended June 30, 2016 was $632 and $1,264 compared to $$1,792 and $4,656 for the same comparable periods in 2015. During 2015, we sold a vehicle with a cost of $35,821 resulting in reduction in depreciation expense in 2016.

Other Income and Expenses

Other expenses consisted of interest expense of $66,193 and $116,376 for the three months and six months ended June 30, 2016 as compared to $3,713 and $12,769 for the same comparable periods in 2015. Interest expense was accrued and recorded on a (a) $53,000 stockholder loan obtained by us on May 23, 2013 for our working capital requirements. In conjunction with the execution of $53,000 stockholder loan, we issued 100,000 shares of our common stock to the lender as additional consideration, and recorded a debt discount of $30,000 which is being accreted to interest expense over the term of the promissory note, (b) $40,000 stockholder loan obtained on June 18, 2014 for our working capital requirements. In conjunction with the execution of $40,000 stockholder loan, we recorded a debt discount of $33,233 applied to normalize interest to 5% which will be amortized as interest expense over the loan term of 34 months, (c) a promissory note to pay a third party a commitment fee of $50,000 and legal fees of $25,000 for a total consideration of $75,000, bearing an annual interest rate of 10%, and due on or before June 30, 2016. The third party agreed to commit to purchase up to $5 million worth of common stock over a period of time terminating on the earlier of (i) 24 months from the date on which the agreement was executed and delivered by the Company and the third party, or (ii the date on which the third party has purchased the aggregate maximum purchase of $5 million, (d) Convertible Promissory Note ("CPN 1 Note") executed on August 17, 2015 of $50,000, bearing 10% interest and maturing on May 17, 2016. In connection with the issuance of the CPN 1 Note, we recorded a debt discount of $5,000 which will be amortized to interest expense over the term of the draw of nine months. We recorded a debt discount related to the bifurcated embedded conversion option derivative liability in the amount of $50,000 which will be amortized to interest expense over the term of the draw and an initial change in fair value of $3,307 for a total initial embedded conversion option liability of $53,307 on the date of issuance of Note, (e) Convertible Promissory Note ("CPN 2 Note") executed on February 4, 2016 of $86,000, bearing 6% interest and maturing on January 28, 2017. In connection with the issuance of the CPN 2 Note, we recorded a debt discount of $11,100 which will be amortized to interest expense over the term of the draw of 357 days. We recorded a debt discount related to the bifurcated embedded conversion option derivative liability in the amount of $86,000 which will be amortized to interest expense over the term of the draw and an initial change in fair value of $10,995 for a total initial embedded conversion option liability of $96,995 on the date of issuance of CPN 2 Note, and (f) Convertible Promissory Note ("CPN 3 Note") executed on February 29, 2016 of $86,000, bearing 6% interest and maturing on January 28, 2017. In connection with the issuance of the CPN 3 Note, we recorded a debt discount of $11,100 which will be amortized to interest expense over the term of the draw of 357 days. We recorded a debt discount related to the bifurcated embedded conversion option derivative liability in the amount of $86,000 which will be amortized to interest expense over the term of the draw and an initial change in fair value of $11,734 for a total initial embedded conversion option liability of $97,734 on the date of issuance of CPN 3 Note.

As a result, the Company recorded interest expense of (a) $2,370 and $5,301 on the shareholders loans and a promissory note for the three months and six months ended June 30, 2016 as compared to $3,713 and $12,769 for the same comparable periods in 2015, (b) $3,042 and $5,347 on three convertible promissory notes for the three months and six months ended June 30, 2016 as compared to $0 for the same comparable periods in 2015, (c) $9,2670 and $16,571 related to the amortization of original issue debt discount and debt discount related to the shareholders loans and convertible promissory notes for the three months and six months ended June 30, 2016 as compared to $0 and $4,091 for the same comparable periods in 2015, and (d) $51,511 and $89,157 related to amortization of embedded conversion option liability discount on convertible promissory notes for the three months and six months ended June 30, 2016 as compared to $0 for the same comparable periods in 2015.

The convertible promissory notes issued by the Company on (i) August 17, 2015 for $50,000, (ii) February 4, 2016 for $86,000, and (iii) February 29, 2016 for $86,000, qualifies for derivative accounting treatment due to the variable conversion formula. As a result, the Company recorded an income of $1,612,457 and an expense of $509,315 for the three months and six months ended June 30, 2016 due to a change in the fair value of the liabilities for the embedded conversion option derivative instrument as compared to $0 for the same comparable periods of 2015. The change in the fair value of embedded conversion option liability is included in other income (expenses) as of June 30, 2016. The Company did not have any convertible derivative instruments outstanding as of June 30, 2015.

Liquidity and Capital Resources

Since our inception, our operations have been primarily financed through private sales of our equity and debt financing. We have devoted our resources to funding the development of our initial vehicle. We have incurred operating losses in each year since our inception and we expect to continue to incur operating losses into the foreseeable future as we advance the ongoing development of our initial vehicle.

As of June 30, 2016, we had no cash and cash equivalents compared to $1,802 at December 31, 2015. We believe that our existing capital resources, together with interest thereon, will not be sufficient to meet our projected operating requirements for at least the next 12 months and we will need to raise additional capital through sale of equity or debt financing. Based on our operating plan, we will need additional funds to meet operational needs and capital requirements for product development and commercialization. We currently have no credit facility or committed sources of capital. To fund future operations we will need to raise additional capital.

Funding may not be available to us on acceptable terms or at any terms. If we are unable to obtain adequate financing when needed, we may have to delay, reduce the scope of, or even suspend development of our initial vehicle. We may seek to raise any necessary additional capital through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing and distribution arrangements. To the extent that we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our vehicle and future revenue streams, and we may have to grant licenses on terms that may not be favorable to us. If we do raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders' rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends.

The accompanying financial statements for the six months ended June 30, 2016 have been prepared on a basis that contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. We have continuing net losses and negative cash flows from operating activities. In addition, we have deficiencies in working capital as of most of the balance sheet dates. These conditions raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern. These circumstances caused our independent registered public accounting firm to include an explanatory paragraph in their report dated April 4, 2016, regarding their concerns about our ability to continue as a going concern. Our ability to continue as a going concern depends on our ability to obtain additional financing as may be required to fund current operations. Management's plans include selling our common stock to investors to raise working capital for operations and there is no assurance these plans will be realized.

Operating Activities

Net cash used in operating activities for the six months ended June 30, 2016 was $152,357 which resulted primarily from the loss of $782,183, depreciation of $1,264, amortization of prepaid consulting fees of $1,000, amortization of original debt issuance discount on notes payable of $16,571, amortization of embedded conversion option liability discount of $89,157, change in the fair value of embedded conversion option liability of $509,315, increase in accounts payable of $9,570, and increase in accrued liabilities of $2,949.

Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2016 was $150,555 primarily due to cash proceeds of $149,800 received from two convertible promissory notes, cash proceeds from a related party of $12,500, and cash payment of $11,745 against note payable.

As a result of the above activities, we experienced a net decrease in cash and cash equivalents of $1,802 for the six months ended June 30, 2016. Our ability to continue as a going concern is still dependent on our success in obtaining additional financing from investors or from sale of our common stock.

Other Obligations

Settlement of litigation

In October 2013, the entire Agreement with DLC was negotiated and settled requiring the Company to pay DLC $3,000 in November 2013 and $1,000 per month for the next 12-month period. The Company agreed not to contest DLC's ownership of 80,000 shares of the Company's stock. The Company had recorded a liability and an expense of $15,000 as a result of this litigation in its consolidated financial statements as of June 30, 2016. As of June 30, 2016, the remaining liability on the settlement of $7,000 is included in accounts payable in accompanying consolidated financial statements. The Company plans on paying DLC for the months of May 2014 through November 2014, which DLC has yet to demand.

JOBS Act Accounting Election

We are an "emerging growth company," as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards, and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

Critical Accounting Policies and Significant Judgments and Estimates

Our management's discussion and analysis of our financial condition and results of operations is based on our financial statements which we have prepared in accordance with U.S. generally accepted accounting principles. In preparing our financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We have identified the following accounting policies that we believe require application of management's most subjective judgments, often requiring the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Our actual results could differ from these estimates and such differences could be material.

While our significant accounting policies are described in more detail in Note 2 of our annual consolidated financial statements included in this Report, we believe the following accounting policies to be critical to the judgments and estimates used in the preparation of our financial statements.

Stock-Based Compensation

In accordance with ASC 718, Compensation – Stock Compensation , the Company accounts for share-based payments to employees using the fair value method. All transactions in which goods or services are received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The Company generally uses the Black-Scholes option pricing method to compute the fair value of options or warrants granted for goods or services.

Share based payments to non-employees are accounted for under the measurement and recognition criteria of ASC 505-50 " Equity Based Payments to Non-Employees".

Non Cash Equity Transactions

Shares of equity instruments issued for noncash consideration are recorded at the estimated fair market value of the consideration granted based on the estimated fair market value of the equity instrument, or at the estimated fair market value of the goods or services received whichever is more readily determinable.

Off-Balance Sheet Arrangements

We have not engaged in any off-balance sheet arrangements as defined in Item 303(c) of the SEC's Regulation S-B. We did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special-purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

As a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 (the "Exchange Act"), and as provided in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and, therefore, are not required to provide the information requested by this Item.

Item 4.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer, who is also our Chief Financial Officer (the "Officer"), evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2016. The term "disclosure controls and procedures," as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures. Based on the Officer's evaluation, management concluded as of June 30, 2016 that our disclosure controls and procedures were not effective because of material weaknesses in our internal control over financial reporting, described below in Management's Report on Internal Control over Financial Reporting. Notwithstanding the identified material weaknesses, management believes the consolidated financial statements included in this quarterly report on Form 10-Q fairly represent in all material respects our financial condition, results of operations and cash flows at and for the periods presented in accordance with U.S. GAAP.

Management's Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a- 15(f) under the Securities Exchange Act of 1934, as amended. Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America ("GAAP"). We recognize that because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

To evaluate the effectiveness of our internal control over financial reporting, management used the criteria described in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") - 1992.

In connection with management's assessment of our internal control over financial reporting, the Company does not have a controlling independent board of directors or audit committee as of June 30, 2016. We consider this to be a material weakness as an independent board and audit committee provide important oversight. Since the Company is not listed on a national exchange or on an automated interdealer quotation system, it is not required to have an audit committee or independent directors, and thus does not have a controlling independent board or audit committee. The Company is in the process of addressing this issue by establishing an audit committee and appointing independent directors, with at least one having financial expertise.

PART II - OTHER INFORMATION

Item 1 - Legal Proceedings

From time to time, we may become involved in various lawsuits and legal proceedings that arise in the ordinary course of our business. The impact and outcome of litigation, if any, is subject to inherent uncertainties, and any adverse result in these or other matters may arise from time to time that could harm our business. The Company's officers and directors are not aware of any threatened or pending litigation to which the Company is a party or which any of its property is the subject and which would have any material, adverse effect on the Company.

Item 1A - Risk Factors

The section entitled "Risk Factors" in the 2015 Annual Report filed with the Securities and Exchange Commission on April 4, 2016 is hereby incorporated by reference in this report as if set forth herein in its entirety.

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

During the three months ended June 30, 2016, the Company did not sell any shares of its common stock.

On April 29, 2016, the Company issued 1,432,999 shares of its common stock to Auctus Fund, LLC ("Auctus"), pursuant to a conversion notice from Auctus under the terms of the convertible promissory note dated August 17, 2015 (the "Auctus Note"), which was previously disclosed and reported by the Company on Form 8-K filed with the SEC on August 21, 2015. Pursuant to the Auctus Note and the conversion notice, Auctus converted $19,704 of principal and interest due under the Auctus Note into 1,432,999 shares of our common stock. These securities were issued in transactions not registered under the Securities Act in reliance upon the exemption provided under Section 4(2) of the Securities Act and/or Regulation D promulgated by the Securities and Exchange Commission. We believed that the exemption was available because the offer and sale of the securities did not involve a public offering and because of the limited number of recipients, the purchaser's representation of sophistication in financial matters, and its access to information concerning our business.

Subsequent to our fiscal quarter ended June 30, 2016, and prior to September 28, 2016:

Item 3 - Defaults upon Senior Securities

None.

Item 4 - Mine Safety Disclosures

None.

Item 5 - Other Information

None.

Item 6 - Exhibits

The following Exhibits are filed as part of this Quarterly Report pursuant to Item 601 of Regulation S-K:

Exhibit Number	Description

2.1.1	Agreement and Plan of Merger dated December 5, 2007(1)

2.1.2	Certificate of Merger - Delaware - dated December 5, 2007(1)

2.1.3	Articles of Merger - Florida - dated December 7, 2007(1)

2.1.4	Certificate of Merger – Delaware - dated September 20, 2011 (2)

2.1.5	Agreement and Plan Of Merger Dated December 27, 2013 By and Among EMAV Holdings, Inc., Electric Motors and Vehicles Company, and EV Pop Acquisition Company (3)

3.1.1	Certificate of Incorporation dated May 14, 1987(1)

3.1.2	Articles of Amendment dated June 30, 1998(1)

3.1.3	Articles of Amendment dated November 12, 1998(1)

3.1.4	Articles of Amendment dated June 22, 2006(1)

3.1.5	Certificate of Incorporation of Delaware entity dated October 11, 2007(1)

3.1.6	Articles of Amendment dated October 18, 2007(1)

3.1.7	Certificate of Amendment dated August 27, 2008(1)

3.1.8	Amendment to Certificate of Incorporation dated December 27, 2013 (3)

3.1.9	Certificate of Merger dated December 27,2013 (3)

3.2.1	Florida Amended and Restated By-Laws(1)

3.2.2	Delaware Amended and Restated By-Laws(1)

10.1	Stock Purchase Agreement dated March 31, 2010 by and between the Company and Bedrock Ventures, Inc. (4)

10.2	Repurchase Agreement dated April 1, 2010 by and among the Company and CENTURY CAPITAL PARTNERS, LLC, and CORPORATE SERVICES INTERNATIONAL, INC. (4)

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

31.2	Certification of the Chief Financial Officer and Chief Operating Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(*)

32.1	Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002(*)

32.2	Certification of the Chief Financial Officer and Chief Operating Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002(*)

101*+	The following materials from the Company's Annual Report on Form 10-K for the annual period ended December 31, 2014, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as at December 31, 2014 and 2013; (ii) Consolidated Statements of Operations for the years ended December 31, 2014 and 2013;(iii) Consolidated Statements of Stockholders' Equity for the years ended December 31, 2014 and 2013; (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2014 and 2013; and (iv) Notes to Consolidated Financial Statements.

101 INS	XBRL Instance Document*

101 SCH	XBRL Schema Document*

101 CAL	XBRL Calculation Linkbase Document*

101 DEF	XBRL Definition Linkbase Document*

101 LAB	XBRL Labels Linkbase Document*

101 PRE	XBRL Presentation Linkbase Document*

The XBRL related information in Exhibit 101 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

(1)		Previously filed with the Company's Form 10 filed with the SEC on November 12, 2008 and incorporated herein by reference.
(2)		Incorporated by reference to Exhibit 2.1.4 to the Annual Report on Form 10-K filed with the SEC on 30 January 2012.
(3)		Previously filed with the Company's Form 8-K filed on December 31, 2013 and incorporated herein by reference.
(4)		Previously filed with the Company's Form 8-K filed on April 7, 2010 and incorporated herein by reference.
(*)		Filed herewith.
+		Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto shall not be deemed "filed" or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act, Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections, and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

SIGNATURES

Pursuant to the requirement 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.

Date: September 29, 2016	EMAV Holdings, Inc.


	By: /s/ Keith A. Rosenbaum
	KEITH A. ROSENBAUM,
	Chief Executive Officer and Chief Financial Officer (Principal Executive Officer, Principal Financial Officer, and Principal Accounting Officer)

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