10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the Quarterly Period Ended March 31, 2016

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

For the transition period from _____ to _____.

Commission File No. 001-13869

TONNER-ONE WORLD HOLDINGS, INC.

(Formerly One World Holdings, Inc.)

(Exact Name of Registrant as Specified in Its Charter)

Nevada	87-0429198
(State or Other Jurisdiction Of Incorporation or Organization)	(I.R.S. Employer Identification Number)
14515 Briarhills Parkway, Suite 105, Houston, Texas	77077
(Address of Principal Executive Offices)	(Zip Code)

Registrant's telephone number, including area code (281) 940-8534

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

Yes ☒   No ☐

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒    No ☐

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-3 of the Exchange Act.  (Check one):

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.

Yes ☐   No ☒

As of May 20, 2016 there were 457,437,483 shares of the registrant's common stock outstanding.

TONNER-ONE WORLD HOLDINGS, INC.

(Formerly One World Holdings, Inc.)

FORM 10-Q INDEX

QUARTER ENDED MARCH 31, 2016

	Page Number
PART I – FINANCIAL INFORMATION
Item 1.  Financial Statements
Condensed Consolidated Balance Sheets as of March 31, 2016 (Unaudited)and December 31, 2015	3
Condensed Consolidated Statements of Operations for the Three MonthsEnded March 31, 2016 and 2015 (Unaudited)	4
Condensed Consolidated Statements of Cash Flows for the Three MonthsEnded March 31, 2016 and 2015 (Unaudited)	5
Notes to Condensed Consolidated Financial Statements (Unaudited)	6
Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.  Quantitative and Qualitative Disclosures About Market Risk	22
Item 4.  Controls and Procedures	22
PART II – OTHER INFORMATION
Item 1.  Legal Proceedings	23
Item 1A.  Risk Factors	24
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.  Defaults Upon Senior Securities	24
Item 4.  Mine Safety Disclosures	25
Item 5.  Other Information	25
Item 6.  Exhibits	25
Signature Page

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

TONNER-ONE WORLD HOLDINGS, INC.

(Formerly One World Holdings, Inc.)

Condensed Consolidated Balance Sheets

	March 31, 2016
	(Unaudited)			December 31, 2015
ASSETS
Current assets:
Cash	$	4,482		$	5,932
Accounts receivable		15,429			3,022
Inventories, net		3,759			20,785
Note receivable		45,000			-
Prepaid expenses and other current assets		15,057			13,666
Prepaid consulting services		-			22,500
Total current assets		83,727			65,905
Property and equipment, net		51,033			55,458
Other assets		2,701			2,701
Total	$	137,461		$	124,064
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued expenses	$	1,997,982		$	2,187,475
Accrued interest and penalties payable		1,701,044			1,265,270
Convertible debentures, net of discount		2,596,757			2,387,981
Derivative liability		7,168,777			10,852,906
Notes payable		540,328			459,801
Current portion of long-term debt, net of discount		29,777			29,409
Stockholder advances		479,076			456,376
Total current liabilities		14,513,741			17,639,218
Long-term debt, net of current portion and discount		134,893			62,361
Total liabilities		14,648,634			17,701,579
Commitments and contingencies
Stockholders' deficit:
Preferred stock, $0.001 par value, 10,000,000 shares authorized:Series AA, 60,000 and 80,000 shares issued and outstanding,    respectively		60			80
Series BB, 186,000 shares issued and outstanding		186			186
Common stock; $0.0025 par value, 2,000,000,000 shares authorized, 447,410,607 and 422,125,005 shares issued and outstanding, respectively		1,118,527			1,055,313
Additional paid-in capital		11,337,650			11,299,059
Accumulated deficit		(26,967,596	)		(29,932,153	)
Total stockholders' deficit		(14,511,173	)		(17,577,515	)
	$	137,461		$	124,064

See accompanying notes to condensed consolidated financial statements

3

TONNER-ONE WORLD HOLDINGS, INC.

(Formerly One World Holdings, Inc.)

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended March 31,
	2016			2015
Sales	$	56,668		$	739
Cost of sales		19,842			1,068
Gross margin (deficit)		36,826			(329	)
Operating expenses:
Selling, general and administrative		492,051			491,823
Research and development		17,222			2,412
Depreciation		4,425			3,500
Total operating expenses		513,698			497,735
Loss from operations		(476,872	)		(498,064	)
Other income (expense):
Interest expense		(764,487	)		(666,949	)
Gain (loss) on derivative liability		3,866,187			(9,942,205	)
Gain on debt payable in shares		354,849			-
Loss on debt settlement		(15,120	)		(19,761	)
Total other income (expense)		3,441,429			(10,628,915	)
Income (loss) before income taxes		2,964,557			(11,126,979	)
Provision for income taxes		-			-
Net income (loss)	$	2,964,557		$	(11,126,979	)
Net income (loss) per common share:    Basic	$	0.01		$	(0.05	)
Diluted	$	0.00		$	(0.05	)
Weighted average number of common shares outstanding:    Basic		436,566,855			226,639,181
Diluted		3,860,333,799			226,639,181

See accompanying notes to condensed consolidated financial statements

4

TONNER-ONE WORLD HOLDINGS, INC.

(Formerly One World Holdings, Inc.)

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended March 31,
	2016			2015
Cash flows from operating activities:
Net income (loss)	$	2,964,557		$	(11,126,979	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation expense		4,425			3,500
Amortization of debt discount to interest expense		310,043			480,338
Common stock issued for services		-			600
(Gain) loss on derivative liability		(3,866,187	)		9,942,205
(Gain) on debt payable in shares		(354,849	)		-
(Gain) loss on debt settlement		(5,880	)		19,761
Interest expense added to stockholder advances		-			28,460
Changes in operating assets and liabilities:
Accounts receivable		(12,407	)		8,014
Inventories		17,026			(5,456	)
Prepaid expenses and other current assets		21,109			33,994
Accounts payable and accrued expenses		165,356			(19,394	)
Accrued interest and penalties payable		437,130			72,071
Net cash used in operating activities		(319,677	)		(562,886	)
Cash flows from investing activities:
Increase in note receivable		(70,000	)		-
Repayment of note receivable		25,000			-
Net cash used in investing activities		(45,000	)		-
Cash flows from financing activities:
Proceeds from convertible debentures		260,000			758,587
Proceeds from notes payable		128,722			-
Proceeds from stockholder advances		17,727			11,000
Payments on notes payable		(43,222	)		-
Payments on convertible debentures		-			(193,850	)
Payments on stockholder advances		-			(5,000	)
Net cash provided by financing activities		363,227			570,737
Net increase (decrease) in cash		(1,450	)		7,851
Cash, beginning of the period		5,932			604
Cash, end of the period	$	4,482		$	8,455

See accompanying notes to condensed consolidated financial statements

5

TONNER-ONE WORLD HOLDINGS, INC.

(Formerly One World Holdings, Inc.)

Notes to Condensed Consolidated Financial Statements

Three Months Ended March 31, 2016

(Unaudited)

NOTE 1 – DESCRIPTION OF BUSINESS AND BASIS OF FINANCIAL STATEMENT PRESENTATION

Organization, Nature of Business

Tonner-One World Holdings, Inc. (the "Company"), a Nevada Corporation, is a Houston-based company focused on doll design and marketing.  Substantially all of the Company's operations are conducted through its wholly owned subsidiary, The One World Doll Project, Inc. (a Texas Corporation - "OWDPI"). OWDPI began operations on October 1, 2010.  On January 20, 2016, the Company created Tonner-One World, Inc. ("TOW"), another wholly owned subsidiary, for the purpose of taking initial steps to begin production of dolls under the combined Tonner-One World name.  Effective April 8, 2016, the name of the Company was changed from One World Holdings, Inc. to Tonner-One World Holdings, Inc.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, OWDPI, TOW and National Fuel and Energy, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation.

Interim Financial Information

The interim financial information of the Company as of March 31, 2016 and for the three months ended March 31, 2016 and 2015 is unaudited, and the balance sheet as of December 31, 2015 is derived from audited financial statements.  The accompanying condensed consolidated financial statements have been prepared in accordance with U. S. generally accepted accounting principles for interim financial statements.  Accordingly, they omit or condense notes and certain other information normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles.  The accounting policies followed for quarterly financial reporting conform with the accounting policies disclosed in Note 2 to the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2015.  In the opinion of management, all adjustments necessary for a fair presentation of the financial information for the interim periods reported have been made.  All such adjustments are of a normal recurring nature.  The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the results that can be expected for the fiscal year ending December 31, 2016.  The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2015.

Certain amounts in the condensed consolidated financial statements for the three months ended March 31, 2015 have been reclassified to conform to the current year presentation.

NOTE 2 – GOING CONCERN

The Company has incurred operating losses since inception, has limited financial resources and a working capital deficit of $14,430,014 at March 31, 2016. These factors raise substantial doubt about the Company's ability to continue as a going concern. The Company's condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  In addition, the Company had an accumulated deficit of $26,967,596 and a total stockholders' deficit of $14,511,173 at March 31, 2016.  The working capital deficit, accumulated deficit and total stockholders' deficit were negatively impacted by a significant derivative liability and debt recorded through March 31, 2016.  The Company's ability to continue as a going concern is dependent upon its ability to develop additional sources of capital and, ultimately, achieve profitable operations.  Management's plans to address the Company's continuing existence include obtaining debt or equity funding from private or institutional sources or obtaining loans from financial institutions and individuals, where possible.  The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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NOTE 3 – FAIR VALUE OF FINANCIAL INSTRUMENTS

Disclosures about fair value of financial instruments require disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value.  As of March 31, 2016 and December 31, 2015, we believe the amounts reported for cash, accounts payable and accrued expenses, accrued interest and penalties payable, notes payable and stockholder advances approximate fair value because of the short-term nature of these financial instruments.

We adopted ASC Topic 820 (originally issued as SFAS 157, "Fair Value Measurements") for financial instruments measured as fair value on a recurring basis.  ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States, and expands disclosures about fair value measurements.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  ASC Topic 820 established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements).  These tiers include:

· Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

· Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

· Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Liabilities measured at fair value on a recurring basis were as follows at March 31, 2016:

	Total		Level 1		Level 2		Level 3
Derivative liability	$	7,168,777	$	-	$	-	$	7,168,777
Convertible debentures, net of discount		2,596,757		-		-		2,596,757
Current portion of long-term debt, net    of discount		29,777		-		-		29,777
Long-term debt, net of current portion    and discount		134,893		-		-		134,893
Total liabilities measured at fair value	$	9,930,204	$	-	$	-	$	9,930,204

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NOTE 4 – INCOME (LOSS) PER SHARE

The computation of basic income (loss) per common share is based on the weighted average number of shares outstanding during each period.

The computation of diluted earnings per common share is based on the weighted average number of shares outstanding during the period plus the common stock equivalents that would arise from the exercise of stock options and warrants outstanding and conversion of debt, using the treasury stock method and the average market price per share during the period.  Common stock equivalents are not included in the diluted loss per share calculation when their effect is anti-dilutive.

The common shares used in the computation of our basic and diluted net income (loss) per share are reconciled as follows:

	Three Months Ended March 31,
	2016		2015
Weighted average number of shares outstanding - basic		436,566,855		226,639,181
Dilutive effect of shares issuable for convertible debt		3,423,766,944		-
Weighted average number of shares outstanding - dilutive		3,860,333,799		226,639,181

NOTE 5 – CONVERTIBLE DEBENTURES

Through March 31, 2016, we have financed our operations primarily through the issuance of various convertible debentures.  For the three months ended March 31, 2016, we received cash proceeds of $260,000 from the issuance of new convertible debentures.  Convertible debentures, net of discount, included in current liabilities totaled $2,596,757 and $2,387,981 as of March 31, 2016 and December 31, 2015, respectively.

The debentures are generally unsecured and bear interest ranging from 5% to 22% per annum, with maturities ranging from six months to two years.  The outstanding principal and accrued interest of the debentures are convertible into shares of the Company's common stock at a fixed conversion price ranging from $0.00025 to $30.00 per share or variable discounted pricing based on the market price of the Company's common stock as defined in the debt agreement.

We evaluated the convertible debentures in accordance with ASC Topic 815, "Derivatives and Hedging," and determined that the conversion feature of the convertible promissory notes with variable conversion prices were not afforded the exemption for conventional convertible instruments due to their variable conversion rates.  The notes have no explicit limit on the number of shares issuable so they did not meet the conditions set forth in current accounting standards for equity classification. We elected to recognize the notes under paragraph 815-15-25-4, whereby there would be a separation into a host contract and derivative instrument. We elected to initially and subsequently measure the notes in their entirety at fair value, with changes in fair value recognized in earnings.  We recorded a derivative liability and debt discount representing the imputed interest associated with the embedded derivative.

For those convertible debentures with fixed conversion prices, we recorded a beneficial conversion feature at the inception of the debt to additional paid-in capital and to debt discount where the conversion price was less that the market price of the stock.

8

At March 31, 2016, the convertible debentures and related accrued interest payable were convertible into approximately 3,799,337,000 shares of our common stock.  Based on the assumptions used to estimate the fair value of the derivative liability at March 31, 2016 and assuming all lenders convert the notes payable at the March 31, 2016 conversion prices, the Company would have insufficient authorized shares of common stock to complete the debt conversions.

As of March 31, 2016, $1,973,020 of the convertible debentures were delinquent.  We believe we have good relationships with the holders of the delinquent debentures, and we continue to have discussions with them regarding the extension of maturity dates or settlement of amounts due.  Several of the convertible debentures have default interest rates that apply when the debentures are delinquent, and we have accrued default interest where applicable.  In addition, we have been unable to complete certain conversions of convertible debentures during the year ended December 31, 2015, pending the increase in the number of authorized shares of our common stock, and have accrued applicable penalties as of March 31, 2016 and December 31, 2015.

Accrued interest payable for the convertible debentures, including accrued default interest and penalties, where applicable, totaled $1,555,568 and $1,141,478 as of March 31, 2016 and December 31, 2015, respectively.

NOTE 6 – DERIVATIVE LIABILITY

As discussed in Note 5 above, we have recorded a derivative liability and a debt discount representing the imputed interest associated with the embedded derivative associated with our convertible debentures.

The debt discount is amortized over the life of the note and recognized as interest expense.  For the three months ended March 31, 2016 and 2015, we amortized debt discount of $310,043 and $480,338 to interest expense, respectively.  The derivative liability is adjusted periodically according to stock price fluctuations and other inputs and was $7,168,777 and $10,852,906 at March 31, 2016 and December 31, 2015, respectively.

At March 31, 2016, the convertible debentures and related accrued interest payable were convertible into approximately 3,799,337,000 shares of our common stock.  Based on the assumptions used to estimate the fair value of the derivative liability at March 31, 2016, and assuming all lenders converted the notes payable at the March 31, 2016 conversion prices, the Company would have had insufficient authorized shares of common stock to complete the debt conversions.

During the three months ended March 31, 2016, the Company had the following activity in its derivative liability account:

Derivative liability at December 31, 2015	$	10,852,906
Addition to liability for new debt issued		260,000
Elimination of liability on conversion		(77,942	)
Change in fair value		(3,866,187	)
Derivative liability at March 31, 2016	$	7,168,777

9

For purpose of determining the fair market value of the derivative liability, we used the Black Scholes option valuation model.  The significant assumptions used in the Black Scholes valuation of the derivative liability at March 31, 2016 are as follows:

Stock price on the valuation date	$	0.0025
Conversion price for the debt	$	0.00025- $0.0022
Dividend yield		0.00	%
Years to maturity		0.26 – 1.68
Risk free rate		0.39% - 0.66	%
Expected volatility		165.17%% - 351.39	%

These assumptions are subject to significant changes and market fluctuations from period to period; therefore, the estimated fair value of the derivative liability will fluctuate from period to period and the fluctuation may be material.

NOTE 7 – NOTES PAYABLE

We had short-term notes payable to certain individuals and companies totaling $540,328 and $459,801 as of March 31, 2016 and 2015, respectively.  As of March 31, 2016, the notes are unsecured and bear interest at rates ranging from 0% to 18%.  As of March 31, 2016, several of the notes payable were delinquent.  We believe we have good relationships with the note holders, and we continue to have discussions with them regarding the extension of maturity dates or settlement of amounts due.  Several of the convertible debentures have default interest rates that apply when the debentures are delinquent.

Accrued interest payable for the short-term notes payable, including accrued default interest where applicable, was $102,781 and $82,144 as of March 31, 2016 and December 31, 2015, respectively.

NOTE 8 – STOCKHOLDER ADVANCES

Since the inception of the Company, we have relied on cash advances from certain stockholders to fund our operations.  These advances generally have no specified repayment terms and no stated rate of interest.  All advances are considered by us to be due on demand until such time as the advances are converted into notes payable, issuances of shares of our common stock or other formal repayment arrangements.  At March 31, 2016 and December 31, 2015, stockholder advances totalled  $479,076 and $456,376, respectively.

NOTE 9 – LONG-TERM DEBT

Our long-term debt consisted of the following at March 31, 2016:

Long-term convertible debentures,    net of discount of $364,757 (see Note 5)	$	134,893
Long-term note payable, net of discount of $223		29,777
Total		164,670
Current portion		29,777
Long-term debt	$	134,893

10

 The long-term note payable is an unsecured note payable of $30,000 to an individual due July 30, 2016, with interest at 14% per annum.  Payment terms for the note payable are $350 per month for six months and $698 per month for sixty months, including interest. We are in default on the note payable at March 31, 2016 due to our failure to make timely payments in accordance with the terms of the note agreement.

Accrued interest payable for the long-term debt was $42,695 and $41,648 as of March 31, 2016 and December 31, 2015, respectively.

NOTE 10 – STOCKHOLDERS' DEFICIT

As of March 31, 2016, we had 10,000,000 shares of $0.001 par value preferred stock authorized and 2,000,000,000 shares of $0.0025 par value common stock authorized, retroactively restated for the increase in authorized shares.

On March 3, 2016, the holders with the power to vote more than a majority of the outstanding common stock of the Company approved an amendment to the Company's Articles of Incorporation to affect an authorized share increase in our common stock from 500,000,000 shares to 2,000,000,000 shares of common stock.  The amendment became effective on April 8, 2016.

We have authorized the issuance of up to 1,000,000 shares of Series AA Preferred Stock.  Among other things, the Series AA Preferred Stock allows holders thereof enhanced voting rights based on ten thousand (10,000) votes per share of the Company's common stock held by such holders of Series AA Preferred Stock.  The Series AA Preferred Stock is not convertible into common stock, does not pay dividends, and does not include a liquidation preference.  In June 2014, 20,000 shares of Series AA Preferred Stock were issued to each of the four members of the Company's Board of Directors.  On January 29, 2016, Robert Hines resigned from the Board of Directors, effective December 31, 2015, at which time he returned the 20,000 shares of Series AA Preferred Stock, which were then canceled.

We have also authorized the issuance of up to 1,000,000 shares of Series BB Preferred Stock.  Among other things, the Series BB Preferred Stock allows holders thereof voting rights equal to holders of common stock as a single class with respect to all matters submitted to holders of common stock, quarterly dividends payable in arrears in either cash or in kind, liquidation preferences, and is convertible at the option of the holder into 50 shares of common stock of the Company. As of March 31, 2016, 186,000 shares of Series BB Preferred Stock were issued and outstanding.

During the three months ended March 31, 2016, we issued a total of 25,285,602 shares of our common stock with a total value of $101,785 for conversion of debt.

During the three months ended March 31, 2015, we issued a total of 80,486,541 shares of our common stock with a total value of $296,036 for conversion of debt.

As of March 31, 2016, we had several convertible debentures and related accrued interest payable that were convertible into approximately 3,799,337,000 shares of our common stock.  We have 2,000,000,000 common shares authorized and we will be required to again increase the number of authorized shares of common stock in the event all convertible debt is converted into shares of our common stock.

As of March 31, 2016, we had certain penalties on delinquent convertible debentures and pending debenture conversions that are payable in shares of our common stock.  We record these obligations at the current market value of our common stock, marking the obligations to market at each reporting date.  We recognize the change in the market value as gain or loss on debt payable in shares in other income (expense) in our consolidated statements of operations.  For the three months ended March 31, 2016, we recognized a gain on debt payable in shares of $354,849.

11

NOTE 11 – STOCK OPTIONS AND WARRANTS

During the three months ended March 31, 2016, we did not issue any new stock options or warrants.

The following table summarizes the stock option and warrant activity during the three months ended March 31, 2016:

	Shares		Weighted AverageExercise Price		Weighted Average Remaining Contract Term
Outstanding at December 31, 2015		4,977,267	$	0.03		3.25
Granted		-
Exercised		-
Expired or cancelled		-
Outstanding, vested and exercisable    at March 31, 2016		4,977,267	$	0.03		3.00

In May 2014, the Board of Directors of the Company adopted and approved the One World Holdings Inc. 2014 Stock Option and Stock Award Plan (the "Plan").  Also, the holders of a majority of the Company's outstanding common stock voted to approve and authorize adoption of the Plan.  A total of 2,000,000 shares of our common stock are available for issuance under the Plan.  Under the Plan, we may issue options, including incentive stock options and non-statutory stock options, restricted stock grants, or stock appreciation rights.  Awards under the Plan may be granted to employees, consultants, directors and individuals who meet the requirements defined in the Plan.

NOTE 12 – CONSULTING AGREEMENTS

We have entered into various consulting agreements for financial and business development services to the Company.  Certain of these consulting agreements provide for cash compensation to the consultants; however, several are based on issuances of shares of our common stock in exchange for services.

Under the consulting agreements that provide for share issuances, shares were generally issued at the inception of the agreements for services provided.  There generally are no specified performance requirements and no provision in the agreements for return of the shares.  Compensation expense is calculated based on the market price of the stock on the effective date of agreement and amortized over the period over which the services are provided to the Company.   During the three months ended March 31, 2016 and 2015, total amortization of prepaid consulting services included in selling, general and administrative expense was $22,500 and $25,942, respectively.  As of March 31, 2016, we had no unamortized compensation paid in common shares.

NOTE 13 – RELATED PARTY TRANSACTIONS

Several of the consulting agreements discussed in Note 12 are with related parties.  Related parties consist primarily of our executive officers, directors and individuals affiliated through family relationships with our officers and directors.  There was no compensation expense paid in common shares to related parties during the three months ended March 31, 2016 and 2015.

12

In addition to compensation expense paid in stock, we had the following amounts paid for consulting and professional fees to related parties during the three months ended:

	March 31,
	2016		2015
Founder, stockholder	$	44,297	$	60,072
Family of officers and directors		63,250		64,803
Total related parties	$	107,547	$	124,875

As of March 31, 2016 and December 31, 2015, we had convertible debentures of $5,000, $46,600, $112,663 and $8,000 payable to four family members of our executive officers. The outstanding principal and interest are convertible into shares of our common stock at a conversion prices ranging from $0.0025 to $30 per share.  We also had a short-term, non-interest bearing note payable of $5,000 to a related party as of March 31, 2016 and December 31, 2015.

Accrued interest payable to these related parties totaled $39,399 and $30,731 at March 31, 2016 and December 31, 2015, respectively.

As of March 31, 2016 and December 31, 2015, we had stockholder advances payable to related parties totaling $83,023.

NOTE 14 – SUPPLEMENTAL STATEMENT OF CASH FLOWS INFORMATION

During the three months ended March 31, 2016 and 2015, we made no cash payments for income taxes.

During the three months ended March 31, 2016 and 2015, we made cash payments for interest totaling $15,430 and $70,187.

During the three months ended March 31, 2016, we had the following non-cash financing and investing activities:

· Increased debt discount and derivative liability by $260,000.

· Decreased accrued interest payable by $1,356, decreased convertible debentures by $39,000, decreased debt discount by $10,633, decreased derivative liability by $77,942, increased common stock by $63,214 and increased additional paid-in capital by $38,571 for common shares issued in conversion of debt.

· Increased stockholder advances and decreased notes payable by $4,973.

· Decreased Series AA preferred stock and increased additional paid-in capital by $20.

During the three months ended March 31, 2015, we had the following non-cash financing and investing activities:

· Increased additional paid-in capital and debt discount by $48,100 for beneficial conversion feature of convertible notes payable.

· Increased debt discount and derivative liability by $721,575.

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· Decreased stockholder advances and increased convertible debentures by $128,460.

· Decreased accrued interest payable by $1,569, decreased convertible debentures by $59,925, decreased debt discount by $30,603, decreased derivative liability by $244,784, increased common stock by $201,216 and increased additional paid-in capital by $94,820 for common shares issued in conversion of debt.

NOTE 15 – RECENT ACCOUNTING PRONOUNCEMENTS

In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, "Leases (Topic 842)". The amendments in this ASU revise the accounting related to lessee accounting. Under the new guidance, lessees will be required to recognize a lease liability and a right-of-use asset for all leases. The new lease guidance also simplifies the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. The amendments in this ASU are effective for public companies for fiscal years beginning after December 15, 2018 and are to be applied through a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. We are currently unable to determine the impact on our consolidated financial statements of the adoption of this new accounting pronouncement.

In March 2016, the FASB issued ASU No. 2016-09, "Stock Compensation (Topic 718)", which is intended to simplify several aspects of the accounting for share-based payment award transactions, including the income tax impacts, the classification on the statement of cash flows, and forfeitures. The amendments in this ASU are effective for fiscal years beginning after December 15, 2016, including interim periods. We are currently unable to determine the impact on our consolidated financial statements of the adoption of this new accounting pronouncement.

Although there are several other new accounting pronouncements issued or proposed by the FASB, which the Company has adopted or will adopt, as applicable, we do not believe any of these accounting pronouncements has had or will have a material impact on our consolidated financial position or results of operations.

NOTE 16 – CONTINGENCIES

From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business.  Management, along with the assistance of counsel, will determine the ultimate disposition and potential impact of these matters on our financial condition, liquidity or results of operations.

On November 4, 2014, we were named as a defendant in a civil lawsuit filed by Darling Capital, LLC, ("Darling") a creditor of the Company, in the New York Supreme Court, County of New York.  The plaintiff filed a Motion For Summary Judgment in Lieu of Complaint the same day. The plaintiff alleges, among other things, that we defaulted on our obligations under a Convertible Promissory Note held by Darling. The complaint sought, among other relief, judgment against us in the amount of $57,627.  A settlement was reached on September 3, 2015 for the sum of $70,000 consisting of four payments with the final payment due on November 20, 2015.  The first payment of $10,000 was made on September 9, 2015.  No other payments have been made.

On December 3, 2014, WHC Capital, LLC filed a complaint against the Company, demanding $416,000 and alleging the Company's breach of contract and failure to deliver 22,545,900 shares of common stock pursuant to requested conversions of two promissory notes totaling $65,403.  On September 9, 2015, both parties agreed to a settlement of $130,000 in the form of seven payments.  There are currently two remaining payments due under the agreement.

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NOTE 17 – SUBSEQUENT EVENTS

To fund our operations subsequent to March 31, 2016, we incurred net additional indebtedness totaling $89,165, consisting of proceeds from convertible debentures totaling $65,000, proceeds from short-term notes payable totaling $10,000 and stockholder advances totaling $14,165.

Subsequent to March 31, 2016, we issued a total of 10,026,876 shares of our common stock for conversion of debt principal of $10,000 and accrued interest payable of $528.

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

As used in this Quarterly Report on Form 10-Q, references to the "Company," "Tonner-One World," "TOW," "we," "our" or "us" refer to Tonner-One World Holdings, Inc., unless the context otherwise indicates.

Introduction

Management's discussion and analysis of financial condition and results of operations is provided as a supplement to the accompanying condensed consolidated financial statements and related notes to help provide an understanding of our financial condition, the changes in our financial condition and the results of our operations.

Some of the key factors that could cause our future financial results and performance to vary from our expectations include:

· our ability to meet production and sales goals;

· our ability to raise adequate capital to fund operations;

· market developments affecting, and other changes in, the demand for our products or the introduction of competing products;

· increases in the price of raw materials used in the production of our dolls;

· our ability to develop and market our businesses at a level necessary to implement our business strategy and our ability to finance our development;

· the condition of the capital markets generally, which will be affected by interest rates, foreign currency fluctuations and general economic conditions;

· the political and economic climate in the foreign or domestic jurisdictions in which we conduct business; and

· other United States or foreign regulatory or legislative developments which affect the demand for our products generally or increase the cost for our products.

The information contained in this Quarterly Report identifies additional factors that could cause our results or performance to differ materially from those we express in our forward-looking statements.  Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of these assumptions and, therefore, the forward-looking statements based on these assumptions, could themselves prove to be inaccurate.  In light of the significant uncertainties inherent in the forward-looking statements that are included in this Quarterly Report and the exhibits and other documents incorporated herein by reference, our inclusion of this information is not a representation by us or any other person that our objectives and plans will be achieved.

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General

Tonner-One World Holdings, Inc. ("Holdings"), a Nevada Corporation, formerly known as One World Holdings, Inc.), is a Houston-based company that recently released a line of mainstream multicultural dolls aimed at high-end collectors and young pre-teen girls.  Our operations are conducted through our wholly owned subsidiary, The One World Doll Project, Inc., a Texas Corporation ("OWDPI").  In this discussion Holdings and OWDPI are collectively referred to as "One World" or the "Company."  We commenced sales in October 2013.  Through the year ended December 31, 2015, we focused on direct sales and Internet sales and did not require a storefront for operations.  Manufacturing of our dolls is outsourced to physical plant facilities in the People's Republic of China owned by a third-party manufacturers we have selected.  We have purchased the requisite molds and equipment to manufacture our dolls and their accessories.  Warehousing of our merchandise inventories and fulfillment of orders here in the United States will be handled by a third-party center in Houston, Texas.  We also may have our manufacturers ship dolls directly to our major retail customers.

The Company had previously announced a proposed merger transaction whereby OWDPI would merge with Tonner Doll Company, Inc. ("Tonner"), a New York corporation with a successful history of marketing and sales of collectible dolls.  The Company formed TOW for the purpose of taking initial steps to begin production of dolls under the combined Tonner-One World banner.  Following the formation of TOW, and prior to the closing of the proposed merger transaction, management of the Company and of Tonner determined it to be in the best interests of the parties to terminate the merger and explore other opportunities.  Through the formation of TOW, the Company and Tonner have increasing opportunities to work together, and the Board of Directors of the Company has determined it to be in the best interest of the Company to change its name to Tonner-One World Holdings, Inc. to better reflect the combined focuses and prior historical successes of the two companies.

Going Concern Uncertainty

The Company has incurred operating losses since inception, has limited financial resources and a working capital deficit of $14,430,014 at March 31, 2016. These factors raise substantial doubt about the Company's ability to continue as a going concern. The Company's condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  In addition, the Company had an accumulated deficit of $26,967,596 and a total stockholders' deficit of $14,511,173 at March 31, 2016.  The working capital deficit, accumulated deficit and total stockholders' deficit were negatively impacted by a significant derivative liability and debt recorded at March 31, 2016.  The Company's ability to continue as a going concern is dependent upon its ability to develop additional sources of capital and, ultimately, achieve profitable operations.  Management's plans to address the Company's continuing existence include obtaining debt or equity funding from private or institutional sources or obtaining loans from financial institutions and individuals, where possible.  The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Results of Operations

Sales

We had total sales of $56,668 and $739 for the three months ended March 31, 2016 and 2015, respectively. The sales of our dolls are seasonal, with lower sales levels expected for the first few months of each calendar year.  The increase in sales in the current year is due to the successful 2015 introduction of our new line of Tween Scene dolls, with significant orders from a major retailer during the latter part of 2015.  We believe sales in the current year will continue to increase for seasonal buying and for our new line of Tween Scene dolls.

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Cost of Sales

Our cost of sales includes the cost to manufacture our dolls, inbound shipping costs to the United States and handling, fulfillment and outbound shipping costs incurred by our warehouse and fulfillment center.  Low levels of sales or promotional pricing of our dolls can result in these costs exceeding our sales in any particular period.  Cost of sales for the three months ended March 31, 2016 and 2015 were $19,842 and $1,068, respectively.  The increase in cost of sales in the current year is due to the increase in sales of dolls discussed above.  Because of the lower levels of sales in the prior year first quarter, we reported a gross deficit on sales for the three months ended March 31, 2015.

Operating Expenses

Our selling, general and administrative expenses remained fairly constant, increasing to $492,051 in the three months ended March 31, 2016 from $491,823 in the three months ended March 31, 2015.  We continue to incur substantial sales and marketing expenses related to our new line of Tween Scene dolls. In addition, we have hired several consultants to help us establish and market the Company and our products.  

The services of a variety of consultants have been integral in developing our business model, furthering our business and ensuring the successful pursuit of our goals.  Our consultants have contributed a wide variety of different services to us.  These services can be classified into several different categories, as follows:

· Business model development and implementation, which consists of advice, counseland services in the areas of fund raising strategy, corporate structure, hiring needs, office space acquisition and corporate governance;

· Financial and accounting which consists of advice, counsel and services in the areasof developing financial models and corporate accounting systems, corporate structure, quarterly reviews, various day to day accounting and bookkeeping;

· Product development which consists of advice and counsel in the areas of manufacturerselections, development process, engineering reviews, prototype development and testing, quality control, logistical support, safety standards compliance and physical packaging design; and

· Marketing and promotions which consists of advice, counsel and services in the areas ofvideography, photography, graphic design, printing, marketing and public relations activities, strategic market research and planning, website development and IT support.

Our research and development expenses were $17,222 and $2,412 for the three months ended March 31, 2016 and 2015, respectively.  Research and development expenses have increased in the current year as we work to complete the design and manufacturing processes for our current lines of dolls and explore opportunities to develop new lines.

Depreciation expense is currently not material to our operations.  Currently, our only depreciable assets are our molds and equipment to manufacture our dolls and their accessories.  Depreciation expense was $4,425 and $3,500 for the three months ended March 31, 2016 and 2015, respectively.

Other Income (Expense)

Our other expense is comprised of interest expense, gains or losses for the change in fair value of our derivative liability associated with our convertible debentures, gains or losses on recording certain obligations payable in shares of our common stock and for the loss on debt settlement calculated upon conversion of debt to shares of our common stock.  Our interest expense also includes the amortization of debt discount calculated at the inception of the convertible debentures and recorded with the related derivative liability.

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Interest expense increased to $764,487 in the three months ended March 31, 2016 from $666,949 in the three months ended March 31, 2016, 2014. This increase is due primarily to the amortization of debt discount, additional interest expense on new indebtedness and default interest and penalties calculated on several delinquent convertible debentures.

Gain on derivative liability was $3,866,187 for the three months ended March 31, 2016 compared to a loss of $9,942,205 for the three months ended March 31, 2015.  The gain or loss on derivative liability will fluctuate each period depending on the market price of our common stock, volatility, conversion prices, and other valuation inputs, and the fluctuation may be material.

During the three months ended March 31, 2016, we reported a gain on debt payable in shares of $354,849.  Certain obligations payable in our common stock for consulting services and debt conversions not completed are recorded at the market value of the shares of our common stock to be issued.  At each report date, we re-measure the market value of the common stock to be issued, recording a gain or loss on debt payable in shares.

 We reported a loss on debt settlement of $15,120 and $19,761 for the three months ended March 31, 2016 and 2015, respectively.  The gain or loss on debt settlement results from issuing our common shares in conversion of debt and eliminating corresponding derivative liabilities and debt discount.  The gain or loss on debt settlement will fluctuate each period depending on the amount of debt settled through conversion to common stock, the market price of our common stock, volatility, conversion prices, and other valuation inputs, and the fluctuation may be material.

Net Loss

As a result of the factors discussed above, we reported net income of $2,964,557 for the three months ended March 31, 2016 and a net loss of $11,126,979 for the three months ended March 31, 2015.

Liquidity and Capital Resources

As of March 31, 2016, we had total current assets of $83,727, including cash of $4,482, accounts receivable of $15,429, inventories of $3,759, note receivable of $45,000 and prepaid expenses and other current assets totaling $15,057.

We had total current liabilities of $14,513,741 and a working capital deficit of $14,430,014 at March 31, 2016.  In addition, we had accumulated losses from inception of $26,967,596 and had a total stockholders' deficit of $14,511,173 at March 31, 2016.  Our working capital deficit, accumulated deficit and total stockholders' deficit as of March 31, 2016 were materially impacted by our non-cash derivative liability of $7,168,777.

We did not have sufficient cash at March 31, 2016 to fund future operations. Until our sales increase and stabilize, we will continue to rely on cash provided by financing activities, primarily in the form of convertible debentures, and notes and advances from our stockholders. We also have paid substantial consulting fees through the issuance of shares of our common stock, reducing the need for cash to pay these obligations. We believe, however, that we will be required to pay our consultants more in cash as we move forward with our operating plan.

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Net cash used in operating activities was $319,677 for the three months ended March 31, 2016 as a result of our net income of $2,964,557, non-cash expenses totaling $314,468, decreases in inventories of $17,026 and prepaid expenses and other current assets of $21,109, and increases in accounts payable and accrued expenses of $165,356 and accrued interest and penalties payable of $437,130, offset by non cash gains totaling $4,226,916 and an increase in accounts receivable of $12,407.

Net cash used in operating activities was $562,886 for the three months ended March 31, 2015 as a result of our net loss of $11,126,979, an increase in inventories of $5,456 and a decrease in accounts payable and accrued expenses of $19,394, partially offset by non-cash expenses totaling $10,474,864, decreases in accounts receivable of $8,014 and prepaid expenses and other current assets of $33,994, and an increase in accrued interest and penalties payable of $72,071.

Net cash used in investing activities during the three months ended March 31, 2016 was $45,000 comprised of the increase in note receivable of $70,000, partially offset by the repayment of note receivable of $25,000.  During the three months ended March 31, 2015, we had no net cash provided by or used in investing activities.

During the three months ended March 31, 2016, net cash provided by financing activities was $363,227, comprised of proceeds from convertible debentures of $260,000, proceeds from notes payable of $128,722, and proceeds from stockholder advances of $17,727, partially offset by payments on notes payable of $43,222.

During the three months ended March 31, 2015, net cash provided by financing activities was $570,737, comprised of proceeds from convertible debentures of $758,587 and proceeds from stockholder advances of $11,000, partially offset by payments on convertible debentures of $193,850 and payments on stockholder advances of $5,000.

We have incurred losses from operations since inception, have limited financial resources, and at March 31, 2016, had a negative working capital position and a total stockholders' deficit of $14,511,173.  The losses to date represent costs incurred primarily to pay the management team and individuals engaged by us to design and develop our dolls, to negotiate and coordinate the production of the dolls, secure financing, and to develop the marketing strategy to promote the doll line to doll collectors and public markets.  We have also incurred significant administrative expenses, consisting primarily of professional fees and management and consulting services. While professional fees have been paid substantially in cash, a significant portion of our management and consulting costs have been paid through the issuance of shares of our common stock.

We believe that our operating expenses may increase over the next 12 months and estimate that our capital requirements for the next 12 months may approximate $2.0 million.  Our estimated capital requirements include manufacturing costs, marketing, public relations, and general and administrative expenses.  We anticipate meeting our capital requirements by raising funds through a combination of private placements of our common stock and/or issuances of convertible notes payable to private investors.  We currently depend primarily on in-kind arrangements and proceeds from the sale of convertible debentures for our month-to-month capital needs.

Since inception, we have been significantly dependent on third party funding and capital raised through private placements and through the issuance of convertible debt.  We secured contracts with several large retailers; however, we will continue to be dependent on third party funders until our operations generate sufficient revenue to support our operating expenses.

Should we be unable to obtain the capital necessary to fund our expected future working capital needs, we would scale back on marketing, operational and administrative requirements, resulting in slower growth. The amount that we would have to scale back spending would correlate to any deficiency in funding. Such a funding shortage would likely result in an extremely limited budget for advertising and non-essential staff and consultants; however, we would still anticipate meeting our production and product launch deadlines, but we would produce less product initially.

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Since inception we have primarily relied upon in-kind arrangements with various consultants pursuant to which we agreed to issue such consultants shares of common stock in lieu of payment of cash consideration. Services provided by such consultants include media and public relations, business development, product fulfillment, television advertising production, financial, management, corporate compliance, business advisory and employment recruitment consulting services.  We also previously issued certain of our officers and Directors shares of common stock in lieu of the payment of cash consideration.  

At March 31, 2016, the convertible debentures and related accrued interest payable were convertible into approximately 3,799,337,000 shares of our common stock.  Notwithstanding the recent increase in the number of authorized common shares, based on the assumptions used to estimate the fair value of the derivative liability at March 31, 2016 and assuming all lenders convert the notes payable at the March 31, 2016 conversion prices, the Company would have had insufficient authorized shares of common stock to complete the debt conversions.

Critical Accounting Policies

Our consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires the use of estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. The significant accounting policies that we believe are the most important to aid in fully understanding our financial results are the following:

Inventories

Inventories, consisting primarily of dolls manufactured for resale, are stated at the lower of cost or market, with cost determined using primarily the first-in-first-out (FIFO) method.  We maintain a reserve for obsolete inventories to reduce excess and obsolete inventories to their estimated net realizable value.  The reserve was $150,000 as of March 31, 2016 and December 31, 2015.  We currently purchase all inventories from a limited number of foreign suppliers, and are dependent on those suppliers for substantially all merchandise inventory purchases since we commenced operations.

Revenue Recognition

We record revenue from the sales of dolls and accessories in accordance with the underlying sales agreements when the products are shipped, the selling price is fixed and determinable, and collection is reasonably assured.  Our revenues are recorded net of returns and allowances.

Fair Value of Financial Instruments

Disclosures about fair value of financial instruments require disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value.  As of March 31, 2016, we believe the amounts reported for cash, accounts payable and accrued expenses, accrued interest payable, and notes payable approximate fair value because of the short-term nature of these financial instruments.

We adopted ASC Topic 820 (originally issued as SFAS 157, "Fair Value Measurements") for financial instruments measured as fair value on a recurring basis.  ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States, and expands disclosures about fair value measurements.

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Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  ASC Topic 820 established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements).  These tiers include:

· Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

· Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

· Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Liabilities measured at fair value on a recurring basis are as follows at March 31, 2016:

	Total		Level 1		Level 2		Level 3
Derivative liability	$	7,168,777	$	-	$	-	$	7,168,777
Convertible debentures, net of discount		2,596,757		-		-		2,596,757
Current portion of long-term debt, net    of discount		29,777		-		-		29,777
Long-term debt, net of current portion    and discount		134,893		-		-		134,893
Total liabilities measured at fair value	$	9,930,204	$	-	$	-	$	9,930,204

Off Balance Sheet Commitments

We lease approximately 2,882 square feet of office space in one building located at 14515 Briar Hills Parkway, Suite 105, Houston, Texas 77077.  The lease currently has a monthly payment of $4,214 and expires in December 2019.  Beginning on December 1, 2015, the monthly payment increased to $4,407, and will increase incrementally through the end of the term.  We expect that the current leased premises will be satisfactory until the future growth of our business operations necessitates an increase in office space.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Not Applicable.

Item 4.  Controls and Procedures

Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our principal executive officer and chief financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2016.  Based on that evaluation, our principal executive officer and chief financial officer concluded that the disclosure controls and procedures employed at the Company were not effective to provide reasonable assurance that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

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We continue to operate with a limited number of accounting and financial personnel. Although we added the services of a contract Chief Financial Officer during 2014, we have been unable to implement proper segregation of duties over certain accounting and financial reporting processes, including review procedures for key accounting schedules and timely and proper documentation of material transactions and agreements.  We believe these control deficiencies represent material weaknesses in internal control over financial reporting.

Despite the material weaknesses in financial reporting noted above, we believe that our consolidated financial statements included in this report fairly present our financial position, results of operations and cash flows as of and for the periods presented in all material respects.

We are committed to the establishment of effective internal controls over financial reporting and will place emphasis on quarterly and year-end closing procedures, timely documentation and internal review of accounting and financial reporting consequences of material contracts and agreements, and enhanced review of all schedules and account analyses by experienced accounting department personnel or independent consultants.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting during the fiscal quarter ended March 31, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business.  Management, along with the assistance of counsel, will determine the ultimate disposition and potential impact of these matters on our financial condition, liquidity or results of operations.

On November 4, 2014, we were named as a defendant in a civil lawsuit filed by Darling Capital, LLC, ("Darling") a creditor of the Company, in the New York Supreme Court, County of New York.  The plaintiff filed a Motion For Summary Judgment in Lieu of Complaint the same day. The plaintiff alleges, among other things, that we defaulted on our obligations under a Convertible Promissory Note held by Darling. The complaint sought, among other relief, judgment against us in the amount of $57,627.  A settlement was reached on September 3, 2015 for the sum of $70,000 consisting of four payments with the final payment due on November 20, 2015.  The first payment of $10,000 was made on September 9, 2015.  No other payments have been made.

On December 3, 2014, WHC Capital, LLC filed a complaint against the Company, demanding $416,000 and alleging the Company's breach of contract and failure to deliver 22,545,900 shares of common stock pursuant to requested conversions of two promissory notes totaling $65,403.  On September 9, 2015, both parties agreed to a settlement of $130,000 in the form of seven payments.  There are currently two remaining payments due under the agreement.

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Item 1A.  Risk Factors

As of March 31, 2016, we had several convertible debentures and related accrued interest payable that were convertible into approximately 3,799,337,000 shares of our common stock.  On March 3, 2016, the holders with the power to vote more than a majority of the outstanding common stock of the Company approved an amendment to the Company's Articles of Incorporation to affect an authorized share increase in our common stock from 500,000,000 shares to 2,000,000,000 shares of common stock.  The amendment became effective on April 8, 2016.  We will be required to increase the number of authorized shares of common stock in the event all convertible debt is converted into shares of our common stock.

As of the date of this filing, other than discussed above, there have been no material changes to the Risk Factors included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed with the SEC on April 14, 2016 (the "2015 Form 10-K").  The Risk Factors set forth in the 2015 Form 10-K should be read carefully in connection with evaluating our business and in connection with the forward-looking statements contained in this Quarterly Report on Form 10-Q.  Any of the risks described in the 2015 Form 10-K could materially adversely affect our business, financial condition or future results and the actual outcome of matters as to which forward-looking statements are made.  These are not the only risks we face.  Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

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

Recent Sales of Unregistered Securities

During April 2016, we issued convertible debentures (the "Debentures") totaling $115,000. The Debentures mature in September 2017 and bear interest at 8% per annum.  The Debentures are convertible into the Company's common stock at variable prices per share tied to the market price of the Company's common stock, subject to certain adjustments described in the debenture agreements.

The issuances of securities described above were restricted share issuances and deemed to be exempt from registration in reliance on Section 4(a)(2) of the Securities Act as transactions by an issuer not involving a public offering.  Each investor represented that they were accredited investors, as defined in Rule 501 of Regulation D and there was no general solicitation or general advertising used to market the securities.  We made available to each investor with disclosure of all aspects of our business, including providing the investor with press releases, access to our auditors, and other financial, business, and corporate information.  All securities issued were restricted with an appropriate restrictive legend on certificates for notes and warrants issued stating that the securities (and underlying shares) have not been registered under the Securities Act and cannot be sold or otherwise transferred without an effective registration or an exemption therefrom

Item 3.  Defaults Upon Senior Securities

As indicated in Notes 5 and 7 to our condensed consolidated financial statements, several of our convertible debentures and notes payable are delinquent as of March 31, 2016.  We believe we have good relationships with most debenture holders, and continue to have discussions with them regarding the extension of maturity dates or settlement of amounts due.  Several of the convertible debentures and notes have default interest rates that apply when the debentures are delinquent, and we have accrued default interest where applicable.  In addition, we have been unable to complete certain conversions of convertible debentures during the year ended December 31, 2015, pending the increase in the number of authorized shares of our common stock, and have accrued applicable penalties as of March 31, 2016.

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Item 4.  Mine Safety Disclosures

Not applicable.

Item 5.  Other Information

None.

Item 6.  Exhibits

Exhibit No.	Description
31.1	Certification of Chief Executive Officer Pursuant to Rule 13a-14.*
31.2	Certification of Chief Financial Officer Pursuant to Rule 13a-14*
32.1	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.*
101.INS	XBRL Instance**
101.SCH	XBRL Schema**
101.CAL	XBRL Calculations**
101.DEF	XBRL Definitions**
101.LAB	XBRL Label**
101.PRE	XBRL Presentation**

^*Filed herewith.

** 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.

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SIGNATURES

Pursuant to 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.

	ONE WORLD HOLDINGS, INC.
Date: May 20, 2016	By:	/s/ Corinda Joanne Melton
		Name:  Corinda Joanne Melton
		Title:  President and Chief Executive Officer
Date: May 20, 2016	By:	/s/ Dennis P. Gauger
		Name:  Dennis P. Gauger
		Title:  Chief Financial Officer

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EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Corinda J. Melton, certify that:

1.   I have reviewed this Quarterly Report of One World Holdings, Inc. on Form 10-Q for the period ending March 31, 2016;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c)  Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.  The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 20, 2016	By: /s/ Corinda Joanne Melton
	Corinda Joanne Melton
	President and Chief Executive Officer       (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Dennis P. Gauger, certify that:

1.   I have reviewed this Quarterly Report of One World Holdings, Inc. on Form 10-Q for the period ending March 31, 2016;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c)  Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.  The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 20, 2016	By: /s/ Dennis P. Gauger
	Dennis P. Gauger
	Chief Financial Officer
	(Principal Accounting and Financial Officer)

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of One World Holdings, Inc. (the "Company") on Form 10-Q for the period ended March 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), we, Corinda Joanne Melton, Chief Executive Officer, and Dennis P. Gauger, Chief Financial Officer, on the date indicated below, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of our knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

Date:  May 20, 2016	By: /s/ Corinda Joanne Melton
	Corinda Joanne Melton
	President and Chief Executive Officer
	(Principal Executive Officer)

Date:  May 20, 2016	By: /s/ Dennis P. Gauger
	Dennis P. Gauger
	Chief Financial Officer
	(Principal Accounting and Financial Officer)

A signed original of this written statement required by Section 906, or other document authentications, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to One World Holdings, Inc. and will be retained by One World Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 20, 2016
Document and Entity Information:
Entity Registrant Name	TONNER-ONE WORLD HOLDINGS, INC.
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Amendment Flag	false
Entity Central Index Key	0001017616
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Entity Common Stock, Shares Outstanding		457,437,483
Trading Symbol	owoo

XML

CONSOLIDATED BALANCE SHEETS - USD ($)		Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash		$ 4,482	$ 5,932
Accounts receivable		15,429	3,022
Inventories, net		3,759	20,785
Note receivable		45,000
Prepaid expenses and other current assets		15,057	13,666
Prepaid consulting services			22,500
Total current assets		83,727	65,905
Property and equipment, net		51,033	55,458
Other assets		2,701	2,701
Total Assets		137,461	124,064
Current liabilities:
Accounts payable and accrued expenses		1,997,982	2,187,475
Accrued interest and penalties payable		1,701,044	1,265,270
Convertible debentures, net of discount		2,596,757	2,387,981
Derivative liability		7,168,777	10,852,906
Notes payable		540,328	459,801
Current portion of long-term debt, net of discount		29,777	29,409
Stockholder advances		479,076	456,376
Total current liabilities		14,513,741	17,639,218
Long-term debt, net of current portion and discount		134,893	62,361
Total liabilities		14,648,634	17,701,579
Stockholders' deficit:
Preferred stock, $0.001 par value, 10,000,000 shares authorized		246	266
Common stock; $0.0025 par value, 2,000,000,000 shares authorized, 447,410,607 and 422,125,005 shares issued and outstanding, respectively		1,118,527	1,055,313
Additional paid-in capital		11,337,650	11,299,059
Accumulated deficit		(26,967,596)	(29,932,153)
Total stockholders' deficit		(14,511,173)	(17,577,515)
Total		137,461	124,064
Series AA Preferred Stock
Stockholders' deficit:
Preferred stock, $0.001 par value, 10,000,000 shares authorized	[1]	60	80
Series BB Preferred Stock
Stockholders' deficit:
Preferred stock, $0.001 par value, 10,000,000 shares authorized	[2]	$ 186	$ 186

[1] Series AA, 60,000 and 80,000 shares issued and outstanding

[2] Series BB, 186,000 shares issued and outstanding

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Common Stock, par or stated value	$ 0.0025	$ 0.0025
Common Stock, shares authorized	2,000,000,000	2,000,000,000
Common Stock, shares issued	447,410,607	422,125,005
Common Stock, shares outstanding	447,410,607	422,125,005
Common Stock, unissued	0	0
Preferred Stock, Par Value	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Series AA Preferred Stock
Preferred Stock, Par Value	$ 0.001	$ 0.001
Preferred Stock, shares issued	60,000	80,000
Preferred Stock, shares outstanding	60,000	80,000
Series BB Preferred Stock
Preferred Stock, Par Value	$ 0.001	$ 0.001
Preferred Stock, shares issued	186,000	186,000
Preferred Stock, shares outstanding	186,000	186,000

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CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Statement
Sales	$ 56,668	$ 739
Cost of sales	19,842	1,068
Gross margin (deficit)	36,826	(329)
Operating expenses:
Selling, general and administrative	492,051	491,823
Research and development	17,222	2,412
Depreciation	4,425	3,500
Total operating expenses	513,698	497,735
Loss from operations	(476,872)	(498,064)
Other income (expense):
Interest expense	(764,487)	(666,949)
Gain (loss) on derivative liability	3,866,187	(9,942,205)
Gain on debt payable in shares	354,849
Loss on debt settlement	(15,120)	(19,761)
Total other income (expense)	3,441,429	(10,628,915)
Income (loss) before income taxes	$ 2,964,557	$ (11,126,979)
Provision for income taxes
Net income (loss)	$ 2,964,557	$ (11,126,979)
Net income (loss) per common share:
Basic	$ 0.01	$ (0.05)
Diluted	$ 0.00	$ (0.05)
Weighted average number of common shares outstanding:
Basic	436,566,855	226,639,181
Diluted	3,860,333,799	226,639,181

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities:
Net income (loss)	$ 2,964,557	$ (11,126,979)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation expense	4,425	3,500
Amortization of debt discount to interest expense	310,043	480,338
Common stock issued for services		600
(Gain) loss on derivative liability	(3,866,187)	9,942,205
(Gain) on debt payable in shares	(354,849)
(Gain) loss on debt settlement	(5,880)	19,761
Interest expense added to stockholder advances		28,460
Changes in operating assets and liabilities:
Accounts receivable	(12,407)	8,014
Inventories	17,026	(5,456)
Prepaid expenses and other current assets	21,109	33,994
Accounts payable and accrued expenses	165,356	(19,394)
Accrued interest and penalties payable	437,130	72,071
Net cash used in operating activities	(319,677)	(562,886)
Cash flows from investing activities:
Increase in note receivable	(70,000)
Repayment of note receivable	25,000
Net cash used in investing activities	(45,000)
Cash flows from financing activities:
Proceeds from convertible debentures	260,000	758,587
Proceeds from notes payable	128,722
Proceeds from stockholder advances	17,727	11,000
Payments on notes payable	(43,222)
Payments on convertible debentures		(193,850)
Payments on stockholder advances		(5,000)
Net cash provided by financing activities	363,227	570,737
Net increase (decrease) in cash	(1,450)	7,851
Cash, beginning of the period	5,932	604
Cash, end of the period	$ 4,482	$ 8,455

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Note 1 - Description of Business and Basis of Financial Statement Presentation

3 Months Ended

Mar. 31, 2016

Notes

Note 1 - Description of Business and Basis of Financial Statement Presentation

NOTE 1 – DESCRIPTION OF BUSINESS AND BASIS OF FINANCIAL STATEMENT PRESENTATION

Organization, Nature of Business

Tonner-One World Holdings, Inc. (the "Company"), a Nevada Corporation, is a Houston-based company focused on doll design and marketing.  Substantially all of the Company's operations are conducted through its wholly owned subsidiary, The One World Doll Project, Inc. (a Texas Corporation - "OWDPI"). OWDPI began operations on October 1, 2010.  On January 20, 2016, the Company created Tonner-One World, Inc. ("TOW"), another wholly owned subsidiary, for the purpose of taking initial steps to begin production of dolls under the combined Tonner-One World name.  Effective April 8, 2016, the name of the Company was changed from One World Holdings, Inc. to Tonner-One World Holdings, Inc.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, OWDPI, TOW and National Fuel and Energy, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation.

Interim Financial Information

The interim financial information of the Company as of March 31, 2016 and for the three months ended March 31, 2016 and 2015 is unaudited, and the balance sheet as of December 31, 2015 is derived from audited financial statements.  The accompanying condensed consolidated financial statements have been prepared in accordance with U. S. generally accepted accounting principles for interim financial statements.  Accordingly, they omit or condense notes and certain other information normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles.  The accounting policies followed for quarterly financial reporting conform with the accounting policies disclosed in Note 2 to the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2015.  In the opinion of management, all adjustments necessary for a fair presentation of the financial information for the interim periods reported have been made.  All such adjustments are of a normal recurring nature.  The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the results that can be expected for the fiscal year ending December 31, 2016.  The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2015.

Certain amounts in the condensed consolidated financial statements for the three months ended March 31, 2015 have been reclassified to conform to the current year presentation.

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Note 2 - Going Concern

3 Months Ended

Mar. 31, 2016

Notes

Note 2 - Going Concern

NOTE 2 – GOING CONCERN

The Company has incurred operating losses since inception, has limited financial resources and a working capital deficit of $14,430,014 at March 31, 2016. These factors raise substantial doubt about the Company's ability to continue as a going concern. The Company's condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  In addition, the Company had an accumulated deficit of $26,967,596 and a total stockholders' deficit of $14,511,173 at March 31, 2016.  The working capital deficit, accumulated deficit and total stockholders' deficit were negatively impacted by a significant derivative liability and debt recorded through March 31, 2016.  The Company's ability to continue as a going concern is dependent upon its ability to develop additional sources of capital and, ultimately, achieve profitable operations.  Management's plans to address the Company's continuing existence include obtaining debt or equity funding from private or institutional sources or obtaining loans from financial institutions and individuals, where possible.  The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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Note 3 - Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2016

Notes

Note 3 - Fair Value of Financial Instruments

NOTE 3 – FAIR VALUE OF FINANCIAL INSTRUMENTS

Disclosures about fair value of financial instruments require disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value.  As of March 31, 2016 and December 31, 2015, we believe the amounts reported for cash, accounts payable and accrued expenses, accrued interest and penalties payable, notes payable and stockholder advances approximate fair value because of the short-term nature of these financial instruments.

We adopted ASC Topic 820 (originally issued as SFAS 157, "Fair Value Measurements") for financial instruments measured as fair value on a recurring basis.  ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States, and expands disclosures about fair value measurements.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  ASC Topic 820 established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements).  These tiers include:

·           Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

·           Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

·           Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Liabilities measured at fair value on a recurring basis were as follows at March 31, 2016:

	Total	Level 1	Level 2	Level 3
Derivative liability	$7,168,777	$-	$-	$7,168,777
Convertible debentures, net of discount	2,596,757	-	-	2,596,757
Current portion of long-term debt, net     of discount	29,777	-	-	29,777
Long-term debt, net of current portion     and discount	134,893	-	-	134,893
Total liabilities measured at fair value	$9,930,204	$-	$-	$9,930,204

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Note 4 - Income (loss) Per Share

3 Months Ended

Mar. 31, 2016

Notes

Note 4 - Income (loss) Per Share

NOTE 4 – INCOME (LOSS) PER SHARE

The computation of basic income (loss) per common share is based on the weighted average number of shares outstanding during each period.

The computation of diluted earnings per common share is based on the weighted average number of shares outstanding during the period plus the common stock equivalents that would arise from the exercise of stock options and warrants outstanding and conversion of debt, using the treasury stock method and the average market price per share during the period.  Common stock equivalents are not included in the diluted loss per share calculation when their effect is anti-dilutive.

The common shares used in the computation of our basic and diluted net income (loss) per share are reconciled as follows:

	Three Months Ended March 31,
	2016	2015
Weighted average number of shares outstanding - basic	436,566,855	226,639,181
Dilutive effect of shares issuable for convertible debt	3,423,766,944	-
Weighted average number of shares outstanding - dilutive	3,860,333,799	226,639,181

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Note 5 - Convertible Debentures

3 Months Ended

Mar. 31, 2016

Notes

Note 5 - Convertible Debentures

NOTE 5 – CONVERTIBLE DEBENTURES

Through March 31, 2016, we have financed our operations primarily through the issuance of various convertible debentures.  For the three months ended March 31, 2016, we received cash proceeds of $260,000 from the issuance of new convertible debentures.  Convertible debentures, net of discount, included in current liabilities totaled $2,596,757 and $2,387,981 as of March 31, 2016 and December 31, 2015, respectively.

The debentures are generally unsecured and bear interest ranging from 5% to 22% per annum, with maturities ranging from six months to two years.  The outstanding principal and accrued interest of the debentures are convertible into shares of the Company's common stock at a fixed conversion price ranging from $0.00025 to $30.00 per share or variable discounted pricing based on the market price of the Company's common stock as defined in the debt agreement.

We evaluated the convertible debentures in accordance with ASC Topic 815, "Derivatives and Hedging," and determined that the conversion feature of the convertible promissory notes with variable conversion prices were not afforded the exemption for conventional convertible instruments due to their variable conversion rates.  The notes have no explicit limit on the number of shares issuable so they did not meet the conditions set forth in current accounting standards for equity classification. We elected to recognize the notes under paragraph 815-15-25-4, whereby there would be a separation into a host contract and derivative instrument. We elected to initially and subsequently measure the notes in their entirety at fair value, with changes in fair value recognized in earnings.  We recorded a derivative liability and debt discount representing the imputed interest associated with the embedded derivative.

For those convertible debentures with fixed conversion prices, we recorded a beneficial conversion feature at the inception of the debt to additional paid-in capital and to debt discount where the conversion price was less that the market price of the stock.

At March 31, 2016, the convertible debentures and related accrued interest payable were convertible into approximately 3,799,337,000 shares of our common stock.  Based on the assumptions used to estimate the fair value of the derivative liability at March 31, 2016 and assuming all lenders convert the notes payable at the March 31, 2016 conversion prices, the Company would have insufficient authorized shares of common stock to complete the debt conversions.

As of March 31, 2016, $1,973,020 of the convertible debentures were delinquent.  We believe we have good relationships with the holders of the delinquent debentures, and we continue to have discussions with them regarding the extension of maturity dates or settlement of amounts due.  Several of the convertible debentures have default interest rates that apply when the debentures are delinquent, and we have accrued default interest where applicable.  In addition, we have been unable to complete certain conversions of convertible debentures during the year ended December 31, 2015, pending the increase in the number of authorized shares of our common stock, and have accrued applicable penalties as of March 31, 2016 and December 31, 2015.

Accrued interest payable for the convertible debentures, including accrued default interest and penalties, where applicable, totaled $1,555,568 and $1,141,478 as of March 31, 2016 and December 31, 2015, respectively.

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Note 6 - Derivative Liability

3 Months Ended

Mar. 31, 2016

Notes

Note 6 - Derivative Liability

NOTE 6 – DERIVATIVE LIABILITY

As discussed in Note 5 above, we have recorded a derivative liability and a debt discount representing the imputed interest associated with the embedded derivative associated with our convertible debentures. 

The debt discount is amortized over the life of the note and recognized as interest expense.  For the three months ended March 31, 2016 and 2015, we amortized debt discount of $310,043 and $480,338 to interest expense, respectively.  The derivative liability is adjusted periodically according to stock price fluctuations and other inputs and was $7,168,777 and $10,852,906 at March 31, 2016 and December 31, 2015, respectively.

At March 31, 2016, the convertible debentures and related accrued interest payable were convertible into approximately 3,799,337,000 shares of our common stock.  Based on the assumptions used to estimate the fair value of the derivative liability at March 31, 2016, and assuming all lenders converted the notes payable at the March 31, 2016 conversion prices, the Company would have had insufficient authorized shares of common stock to complete the debt conversions.

During the three months ended March 31, 2016, the Company had the following activity in its derivative liability account:

Derivative liability at December 31, 2015	$10,852,906
Addition to liability for new debt issued	260,000
Elimination of liability on conversion	(77,942)
Change in fair value	(3,866,187)
Derivative liability at March 31, 2016	$7,168,777

For purpose of determining the fair market value of the derivative liability, we used the Black Scholes option valuation model. 

The significant assumptions used in the Black Scholes valuation of the derivative liability at March 31, 2016 are as follows:

Stock price on the valuation date	$0.0025
Conversion price for the debt	$0.00025- $0.0022
Dividend yield	0.00%
Years to maturity	0.26- 1.68
Risk free rate	0.39% - 0.66%
Expected volatility	165.17%% - 351.39%

These assumptions are subject to significant changes and market fluctuations from period to period; therefore, the estimated fair value of the derivative liability will fluctuate from period to period and the fluctuation may be material.

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Note 7 - Notes Payable

3 Months Ended

Mar. 31, 2016

Notes

Note 7 - Notes Payable

NOTE 7 – NOTES PAYABLE

We had short-term notes payable to certain individuals and companies totaling $540,328 and $459,801 as of March 31, 2016 and 2015, respectively.  As of March 31, 2016, the notes are unsecured and bear interest at rates ranging from 0% to 18%.  As of March 31, 2016, several of the notes payable were delinquent.  We believe we have good relationships with the note holders, and we continue to have discussions with them regarding the extension of maturity dates or settlement of amounts due.  Several of the convertible debentures have default interest rates that apply when the debentures are delinquent.

Accrued interest payable for the short-term notes payable, including accrued default interest where applicable, was $102,781 and $82,144 as of March 31, 2016 and December 31, 2015, respectively.

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Note 8 - Stockholder Advances

3 Months Ended

Mar. 31, 2016

Notes

Note 8 - Stockholder Advances

NOTE 8 – STOCKHOLDER ADVANCES

Since the inception of the Company, we have relied on cash advances from certain stockholders to fund our operations.  These advances generally have no specified repayment terms and no stated rate of interest.  All advances are considered by us to be due on demand until such time as the advances are converted into notes payable, issuances of shares of our common stock or other formal repayment arrangements.  At March 31, 2016 and December 31, 2015, stockholder advances totalled  $479,076 and $456,376, respectively.

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Note 9 - Long-term Debt

3 Months Ended

Mar. 31, 2016

Notes

Note 9 - Long-term Debt

NOTE 9 – LONG-TERM DEBT

Our long-term debt consisted of the following at March 31, 2016:

Long-term convertible debentures,     net of discount of $364,757 (see Note 5)	$134,893
Long-term note payable, net of discount of $223	29,777
Total	164,670
Current portion	29,777
Long-term debt	$134,893

 The long-term note payable is an unsecured note payable of $30,000 to an individual due July 30, 2016, with interest at 14% per annum.  Payment terms for the note payable are $350 per month for six months and $698 per month for sixty months, including interest. We are in default on the note payable at March 31, 2016 due to our failure to make timely payments in accordance with the terms of the note agreement.

Accrued interest payable for the long-term debt was $42,695 and $41,648 as of March 31, 2016 and December 31, 2015, respectively.

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Note 10 - Stockholders' Deficit

3 Months Ended

Mar. 31, 2016

Notes

Note 10 - Stockholders' Deficit

NOTE 10 – STOCKHOLDERS' DEFICIT

As of March 31, 2016, we had 10,000,000 shares of $0.001 par value preferred stock authorized and 2,000,000,000 shares of $0.0025 par value common stock authorized, retroactively restated for the increase in authorized shares.

On March 3, 2016, the holders with the power to vote more than a majority of the outstanding common stock of the Company approved an amendment to the Company's Articles of Incorporation to affect an authorized share increase in our common stock from 500,000,000 shares to 2,000,000,000 shares of common stock.  The amendment became effective on April 8, 2016.

We have authorized the issuance of up to 1,000,000 shares of Series AA Preferred Stock.  Among other things, the Series AA Preferred Stock allows holders thereof enhanced voting rights based on ten thousand (10,000) votes per share of the Company's common stock held by such holders of Series AA Preferred Stock.  The Series AA Preferred Stock is not convertible into common stock, does not pay dividends, and does not include a liquidation preference.  In June 2014, 20,000 shares of Series AA Preferred Stock were issued to each of the four members of the Company's Board of Directors.  On January 29, 2016, Robert Hines resigned from the Board of Directors, effective December 31, 2015, at which time he returned the 20,000 shares of Series AA Preferred Stock, which were then canceled.

We have also authorized the issuance of up to 1,000,000 shares of Series BB Preferred Stock.  Among other things, the Series BB Preferred Stock allows holders thereof voting rights equal to holders of common stock as a single class with respect to all matters submitted to holders of common stock, quarterly dividends payable in arrears in either cash or in kind, liquidation preferences, and is convertible at the option of the holder into 50 shares of common stock of the Company. As of March 31, 2016, 186,000 shares of Series BB Preferred Stock were issued and outstanding.

During the three months ended March 31, 2016, we issued a total of 25,285,602 shares of our common stock with a total value of $101,785 for conversion of debt.

During the three months ended March 31, 2015, we issued a total of 80,486,541 shares of our common stock with a total value of $296,036 for conversion of debt.

As of March 31, 2016, we had several convertible debentures and related accrued interest payable that were convertible into approximately 3,799,337,000 shares of our common stock.  We have 2,000,000,000 common shares authorized and we will be required to again increase the number of authorized shares of common stock in the event all convertible debt is converted into shares of our common stock.

As of March 31, 2016, we had certain penalties on delinquent convertible debentures and pending debenture conversions that are payable in shares of our common stock.  We record these obligations at the current market value of our common stock, marking the obligations to market at each reporting date.  We recognize the change in the market value as gain or loss on debt payable in shares in other income (expense) in our consolidated statements of operations.  For the three months ended March 31, 2016, we recognized a gain on debt payable in shares of $354,849.

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Note 11 - Stock Options and Warrants

3 Months Ended

Mar. 31, 2016

Notes

Note 11 - Stock Options and Warrants

NOTE 11 – STOCK OPTIONS AND WARRANTS

During the three months ended March 31, 2016, we did not issue any new stock options or warrants.

The following table summarizes the stock option and warrant activity during the three months ended March 31, 2016:

	Shares	Weighted Average Exercise Price	Weighted Average Remaining Contract Term
Outstanding at December 31, 2015	4,977,267	$0.03	3.25
Granted	-
Exercised	-
Expired or cancelled	-
Outstanding, vested and exercisable     at March 31, 2016	4,977,267	$0.03	3.00

In May 2014, the Board of Directors of the Company adopted and approved the One World Holdings Inc. 2014 Stock Option and Stock Award Plan (the "Plan").  Also, the holders of a majority of the Company's outstanding common stock voted to approve and authorize adoption of the Plan.  A total of 2,000,000 shares of our common stock are available for issuance under the Plan.  Under the Plan, we may issue options, including incentive stock options and non-statutory stock options, restricted stock grants, or stock appreciation rights.  Awards under the Plan may be granted to employees, consultants, directors and individuals who meet the requirements defined in the Plan.

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Note 12 - Consulting Agreements

3 Months Ended

Mar. 31, 2016

Notes

Note 12 - Consulting Agreements

NOTE 12 – CONSULTING AGREEMENTS

We have entered into various consulting agreements for financial and business development services to the Company.  Certain of these consulting agreements provide for cash compensation to the consultants; however, several are based on issuances of shares of our common stock in exchange for services.

Under the consulting agreements that provide for share issuances, shares were generally issued at the inception of the agreements for services provided.  There generally are no specified performance requirements and no provision in the agreements for return of the shares.  Compensation expense is calculated based on the market price of the stock on the effective date of agreement and amortized over the period over which the services are provided to the Company.   During the three months ended March 31, 2016 and 2015, total amortization of prepaid consulting services included in selling, general and administrative expense was $22,500 and $25,942, respectively.  As of March 31, 2016, we had no unamortized compensation paid in common shares.

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Note 13- Related Party Transactions

3 Months Ended

Mar. 31, 2016

Notes

Note 13- Related Party Transactions

NOTE 13 – RELATED PARTY TRANSACTIONS

Several of the consulting agreements discussed in Note 12 are with related parties.  Related parties consist primarily of our executive officers, directors and individuals affiliated through family relationships with our officers and directors.  There was no compensation expense paid in common shares to related parties during the three months ended March 31, 2016 and 2015.

In addition to compensation expense paid in stock, we had the following amounts paid for consulting and professional fees to related parties during the three months ended:

	March 31,
	2016	2015
Founder, stockholder	$44,297	$60,072
Family of officers and directors	63,250	64,803
Total related parties	$107,547	$124,875

As of March 31, 2016 and December 31, 2016, we had convertible debentures of $5,000, $46,600, $112,663 and $8,000 payable to four family members of our executive officers. The outstanding principal and interest are convertible into shares of our common stock at a conversion prices ranging from $0.0025 to $30 per share.  We also had a short-term, non-interest bearing note payable of $5,000 to a related party as of March 31, 2016 and December 31, 2015.

Accrued interest payable to these related parties totaled $39,399 and $30,731 at March 31, 2016 and December 31, 2015, respectively.

As of March 31, 2016 and December 31, 2015, we had stockholder advances payable to related parties totaling $83,023.

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Note 14 - Supplemental Statement of Cash Flows Information

3 Months Ended

Mar. 31, 2016

Notes

Note 14 - Supplemental Statement of Cash Flows Information

NOTE 14 – SUPPLEMENTAL STATEMENT OF CASH FLOWS INFORMATION

During the three months ended March 31, 2016 and 2015, we made no cash payments for income taxes.

During the three months ended March 31, 2016 and 2015, we made cash payments for interest totaling $15,430 and $70,187.

During the three months ended March 31, 2016, we had the following non-cash financing and investing activities:

·           Increased debt discount and derivative liability by $260,000.

·           Decreased accrued interest payable by $1,356, decreased convertible debentures by $39,000, decreased debt discount by $10,633, decreased derivative liability by $77,942, increased common stock by $63,214 and increased additional paid-in capital by $38,571 for common shares issued in conversion of debt.

·           Increased stockholder advances and decreased notes payable by $4,973.

·           Decreased Series AA preferred stock and increased additional paid-in capital by $20.

During the three months ended March 31, 2015, we had the following non-cash financing and investing activities:

·           Increased additional paid-in capital and debt discount by $48,100 for beneficial conversion feature of convertible notes payable.

·           Increased debt discount and derivative liability by $721,575.

·           Decreased stockholder advances and increased convertible debentures by $128,460.

·           Decreased accrued interest payable by $1,569, decreased convertible debentures by $59,925, decreased debt discount by $30,603, decreased derivative liability by $244,784, increased common stock by $201,216 and increased additional paid-in capital by $94,820 for common shares issued in conversion of debt.

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Note 15 - Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2016

Notes

Note 15 - Recent Accounting Pronouncements

NOTE 15 – RECENT ACCOUNTING PRONOUNCEMENTS

In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, "Leases (Topic 842)". The amendments in this ASU revise the accounting related to lessee accounting. Under the new guidance, lessees will be required to recognize a lease liability and a right-of-use asset for all leases. The new lease guidance also simplifies the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. The amendments in this ASU are effective for public companies for fiscal years beginning after December 15, 2018 and are to be applied through a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. We are currently unable to determine the impact on our consolidated financial statements of the adoption of this new accounting pronouncement.

In March 2016, the FASB issued ASU No. 2016-09, "Stock Compensation (Topic 718)", which is intended to simplify several aspects of the accounting for share-based payment award transactions, including the income tax impacts, the classification on the statement of cash flows, and forfeitures. The amendments in this ASU are effective for fiscal years beginning after December 15, 2016, including interim periods. We are currently unable to determine the impact on our consolidated financial statements of the adoption of this new accounting pronouncement.

Although there are several other new accounting pronouncements issued or proposed by the FASB, which the Company has adopted or will adopt, as applicable, we do not believe any of these accounting pronouncements has had or will have a material impact on our consolidated financial position or results of operations.

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Note 16 - Contingencies

3 Months Ended

Mar. 31, 2016

Notes

Note 16 - Contingencies

NOTE 16 – CONTINGENCIES

From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business.  Management, along with the assistance of counsel, will determine the ultimate disposition and potential impact of these matters on our financial condition, liquidity or results of operations.

On November 4, 2014, we were named as a defendant in a civil lawsuit filed by Darling Capital, LLC, ("Darling") a creditor of the Company, in the New York Supreme Court, County of New York.  The plaintiff filed a Motion For Summary Judgment in Lieu of Complaint the same day. The plaintiff alleges, among other things, that we defaulted on our obligations under a Convertible Promissory Note held by Darling. The complaint sought, among other relief, judgment against us in the amount of $57,627.  A settlement was reached on September 3, 2015 for the sum of $70,000 consisting of four payments with the final payment due on November 20, 2015.  The first payment of $10,000 was made on September 9, 2015.  No other payments have been made.

On December 3, 2014, WHC Capital, LLC filed a complaint against the Company, demanding $416,000 and alleging the Company's breach of contract and failure to deliver 22,545,900 shares of common stock pursuant to requested conversions of two promissory notes totaling $65,403.  On September 9, 2015, both parties agreed to a settlement of $130,000 in the form of seven payments.  There are currently two remaining payments due under the agreement.

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Note 17 - Subsequent Events

3 Months Ended

Mar. 31, 2016

Notes

Note 17 - Subsequent Events

NOTE 17 – SUBSEQUENT EVENTS

To fund our operations subsequent to March 31, 2016, we incurred net additional indebtedness totaling $89,165, consisting of proceeds from convertible debentures totaling $65,000, proceeds from short-term notes payable totaling $10,000 and stockholder advances totaling $14,165.

Subsequent to March 31, 2016, we issued a total of 10,026,876 shares of common stock for conversion of debt principal of $10,000 and accrued interest payable of $528.

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Note 1 - Description of Business and Basis of Financial Statement Presentation (Policies)

3 Months Ended

Mar. 31, 2016

Policies

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, OWDPI, TOW and National Fuel and Energy, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation.

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Note 3 - Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2016

Tables/Schedules

Schedule of Fair Value of Liabilities Measured on Recurring Basis

Liabilities measured at fair value on a recurring basis were as follows at March 31, 2016:

	Total	Level 1	Level 2	Level 3
Derivative liability	$7,168,777	$-	$-	$7,168,777
Convertible debentures, net of discount	2,596,757	-	-	2,596,757
Current portion of long-term debt, net     of discount	29,777	-	-	29,777
Long-term debt, net of current portion     and discount	134,893	-	-	134,893
Total liabilities measured at fair value	$9,930,204	$-	$-	$9,930,204

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Note 4 - Income (loss) Per Share (Tables)

3 Months Ended

Mar. 31, 2016

Tables/Schedules

Schedule of Earnings Per Share, Basic and Diluted

	Three Months Ended March 31,
	2016	2015
Weighted average number of shares outstanding - basic	436,566,855	226,639,181
Dilutive effect of shares issuable for convertible debt	3,423,766,944	-
Weighted average number of shares outstanding - dilutive	3,860,333,799	226,639,181

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Note 6 - Derivative Liability (Tables)

3 Months Ended

Mar. 31, 2016

Tables/Schedules

Schedule of Derivative Liabilities at Fair Value

Derivative liability at December 31, 2015	$10,852,906
Addition to liability for new debt issued	260,000
Elimination of liability on conversion	(77,942)
Change in fair value	(3,866,187)
Derivative liability at March 31, 2016	$7,168,777

Schedule of Fair Value Assumptions

The significant assumptions used in the Black Scholes valuation of the derivative liability at March 31, 2016 are as follows:

Stock price on the valuation date	$0.0025
Conversion price for the debt	$0.00025- $0.0022
Dividend yield	0.00%
Years to maturity	0.26- 1.68
Risk free rate	0.39% - 0.66%
Expected volatility	165.17%% - 351.39%

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Note 9 - Long-term Debt (Tables)

3 Months Ended

Mar. 31, 2016

Tables/Schedules

Schedule of Long-term Debt

Our long-term debt consisted of the following at March 31, 2016:

Long-term convertible debentures,     net of discount of $364,757 (see Note 5)	$134,893
Long-term note payable, net of discount of $223	29,777
Total	164,670
Current portion	29,777
Long-term debt	$134,893

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Note 11 - Stock Options and Warrants (Tables)

3 Months Ended

Mar. 31, 2016

Tables/Schedules

Schedule of Stock Option and Warrant, Activity

The following table summarizes the stock option and warrant activity during the three months ended March 31, 2016:

	Shares	Weighted Average Exercise Price	Weighted Average Remaining Contract Term
Outstanding at December 31, 2015	4,977,267	$0.03	3.25
Granted	-
Exercised	-
Expired or cancelled	-
Outstanding, vested and exercisable     at March 31, 2016	4,977,267	$0.03	3.00

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Note 13- Related Party Transactions (Tables)

3 Months Ended

Mar. 31, 2016

Tables/Schedules

Schedule of Related Party Compensation Expense

In addition to compensation expense paid in stock, we had the following amounts paid for consulting and professional fees to related parties during the three months ended:

	March 31,
	2016	2015
Founder, stockholder	$44,297	$60,072
Family of officers and directors	63,250	64,803
Total related parties	$107,547	$124,875

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Note 2 - Going Concern (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Details
Working Capital Deficit	$ (14,430,014)
Accumulated deficit	(26,967,596)	$ (29,932,153)
Total stockholders' deficit	$ (14,511,173)	$ (17,577,515)

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Note 3 - Fair Value of Financial Instruments: Schedule of Fair Value of Liabilities Measured on Recurring Basis (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Derivative liability	$ 7,168,777	$ 10,852,906
Convertible debentures	2,596,757	2,387,981
Current portion of long-term debt	29,777	29,409
Long-term debt, net of current portion	134,893	$ 62,361
Total liabilities measured at fair value	9,930,204
Fair Value, Inputs, Level 1
Derivative liability	0
Convertible debentures	0
Current portion of long-term debt	0
Long-term debt, net of current portion	0
Total liabilities measured at fair value	0
Fair Value, Inputs, Level 2
Derivative liability	0
Convertible debentures	0
Current portion of long-term debt	0
Long-term debt, net of current portion	0
Total liabilities measured at fair value	0
Fair Value, Inputs, Level 3
Derivative liability	7,168,777
Convertible debentures	2,596,757
Current portion of long-term debt	29,777
Long-term debt, net of current portion	134,893
Total liabilities measured at fair value	$ 9,930,204

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Note 4 - Income (loss) Per Share: Schedule of Earnings Per Share, Basic and Diluted (Details) - shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Details
Weighted average number of shares outstanding - basic	436,566,855	226,639,181
Dilutive effect of shares issuable for convertible debt	3,423,766,944	0
Weighted Average Number of Shares Outstanding, Diluted, Total	3,860,333,799	226,639,181

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Note 5 - Convertible Debentures (Details)	3 Months Ended
	Mar. 31, 2016 USD ($) $ / shares	Mar. 31, 2015 USD ($)	Dec. 31, 2015 USD ($)
Proceeds from convertible debentures	$ 260,000	$ 758,587
Convertible debentures, net of discount	2,596,757		$ 2,387,981
Accrued interest and penalties payable	$ 1,701,044		1,265,270
Common Stock
Debt Instrument, Convertible, Number of Equity Instruments	3,799,337,000
Convertible debentures
Proceeds from convertible debentures	$ 260,000
Convertible debentures, net of discount	2,596,757		2,387,981
Convertible debentures amount that is delinquent	1,973,020
Accrued interest and penalties payable	$ 1,555,568		$ 1,141,478
Convertible debentures | Minimum
Debt Instrument, Interest Rate, Stated Percentage	5.00%
Debt Instrument, Term	6 months
Debt Instrument, Convertible, Conversion Price | $ / shares	$ 0.00025
Convertible debentures | Maximum
Debt Instrument, Interest Rate, Stated Percentage	22.00%
Debt Instrument, Term	2 years
Debt Instrument, Convertible, Conversion Price | $ / shares	$ 30.00

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Note 6 - Derivative Liability (Details)	3 Months Ended
	Mar. 31, 2016 USD ($)	Mar. 31, 2015 USD ($)	Dec. 31, 2015 USD ($)
Amortization of debt discount to interest expense	$ 310,043	$ 480,338
Derivative liability	$ 7,168,777		$ 10,852,906
Common Stock
Debt Instrument, Convertible, Number of Equity Instruments	3,799,337,000

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Note 6 - Derivative Liability: Schedule of Derivative Liabilities at Fair Value (Details)	3 Months Ended
	Mar. 31, 2016 USD ($)
Details
Derivative liability, beginning balance	$ 10,852,906
Addition to liability for new debt issued	260,000
Elimination of liability on conversion	(77,942)
Change in fair value	(3,866,187)
Derivative liability, ending balance	$ 7,168,777

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Note 6 - Derivative Liability: Schedule of Fair Value Assumptions (Details)	3 Months Ended
	Mar. 31, 2016 $ / shares
Stock price on the valuation date	$ 0.0025
Dividend yield	0.00%
Minimum
Conversion price for the debt	$ 0.00025
Years to maturity	3 months 4 days
Risk free rate	0.39%
Expected volatility	165.17%
Maximum
Conversion price for the debt	$ 0.0022
Years to maturity	1 year 8 months 5 days
Risk free rate	0.66%
Expected volatility	351.39%

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Note 7 - Notes Payable (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Notes payable	$ 540,328	$ 459,801
Accrued interest and penalties payable	1,701,044	1,265,270
Note Payable
Accrued interest and penalties payable	$ 102,781	$ 82,144
Note Payable | Minimum
Debt Instrument, Interest Rate, Stated Percentage	0.00%
Note Payable | Maximum
Debt Instrument, Interest Rate, Stated Percentage	18.00%

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Note 8 - Stockholder Advances (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Details
Stockholder advances	$ 479,076	$ 456,376

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Note 9 - Long-term Debt: Schedule of Long-term Debt (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Long-term convertible debentures, net of discount of $364,757 (see Note 5)	$ 134,893
Long-term note payable, net of discount of $223	29,777
Total	164,670
Current portion	29,777	$ 29,409
Long-term debt	134,893	$ 62,361
Long-term Convertible Debentures
Debt Instrument, Unamortized Discount	364,757
Long Term Note Payable
Debt Instrument, Unamortized Discount	$ 223

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Note 9 - Long-term Debt (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Convertible debentures
Interest Payable	$ 42,695
Long Term Note Payable
Debt Instrument, Face Amount	$ 30,000
Debt Instrument, Maturity Date	Jul. 30, 2016
Debt Instrument, Interest Rate, Stated Percentage	14.00%
Debt Instrument, Payment Terms	Payment terms for the note payable are $350 per month for six months and $698 per month for sixty months, including interest.
Interest Payable		$ 41,648

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Note 10 - Stockholders' Deficit (Details)		1 Months Ended	3 Months Ended
	Dec. 31, 2015 $ / shares shares	Jun. 30, 2014 shares	Mar. 31, 2016 USD ($) $ / shares shares	Mar. 31, 2015 USD ($) shares
Preferred Stock, Shares Authorized	10,000,000		10,000,000
Preferred Stock, Par Value | $ / shares	$ 0.001		$ 0.001
Common Stock, shares authorized	2,000,000,000		2,000,000,000
Common Stock, par or stated value | $ / shares	$ 0.0025		$ 0.0025
Amendment date			Apr. 08, 2016
Debt Conversion, Original Debt, Amount | $			$ 101,785	$ 296,036
Gain on debt payable in shares | $			$ 354,849
Series AA Preferred Stock
Preferred Stock, Par Value | $ / shares	$ 0.001		$ 0.001
Preferred Stock, shares outstanding	80,000		60,000
Series BB Preferred Stock
Preferred Stock, Par Value | $ / shares	$ 0.001		$ 0.001
Preferred Stock, shares outstanding	186,000		186,000
Preferred Stock | Series AA Preferred Stock
Preferred Stock, Shares Authorized			1,000,000
Preferred Stock, Terms			the Series AA Preferred Stock allows holders thereof enhanced voting rights based on ten thousand (10,000) votes per share of the Company's common stock held by such holders of Series AA Preferred Stock. The Series AA Preferred Stock is not convertible into common stock, does not pay dividends, and does not include a liquidation preference.
Stock Issued During Period, Shares, New Issues		20,000
PreferredStockCancelled	20,000
Preferred Stock | Series BB Preferred Stock
Preferred Stock, Shares Authorized			1,000,000
Preferred Stock, Terms			convertible at the option of the holder into 50 shares of common stock of the Company.
Preferred Stock, shares outstanding			186,000
Common Stock
Debt Conversion, Converted Instrument, Shares Issued			25,285,602	80,486,541
Debt Instrument, Convertible, Number of Equity Instruments			3,799,337,000
Pre-amendment
Common Stock, shares authorized			500,000,000

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Note 11 - Stock Options and Warrants: Schedule of Stock Option and Warrant, Activity (Details) - Stock Options and Warrants - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Outstanding, Beginning Balance	4,977,267
Outstanding, Vested and Exercisable, Weighted Average Exercise Price, Ending Balance	$ 0.03
Outstanding, Vested and Exercisable, Weighted Average Remaining Term in Years	3 years	3 years 3 months
Granted	0
Exercised	0
Expired or cancelled	0
Outstanding, Vested and Exercisable, Ending Balance	4,977,267	4,977,267
Outstanding, Vested and Exercisable, Weighted Average Exercise Price, Ending Balance	$ 0.03	$ 0.03

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Note 11 - Stock Options and Warrants (Details)	Mar. 31, 2016 shares
Stock Options and Warrants
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	2,000,000

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Note 12 - Consulting Agreements (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Selling, general and administrative	$ 492,051	$ 491,823
Prepaid consulting services			$ 22,500
Consulting Agreements
Selling, general and administrative	22,500	$ 25,942
Prepaid consulting services	$ 0

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Note 13- Related Party Transactions: Schedule of Related Party Compensation Expense (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Founder, stockholder
Professional fees	$ 44,297	$ 60,072
Family of officers and directors
Professional fees	63,250	64,803
Total related parties
Professional fees	$ 107,547	$ 124,875

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Note 13- Related Party Transactions (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Notes Payable, Related Parties, Current	$ 5,000	$ 5,000
Accrued interest and penalties payable	1,701,044	1,265,270
Stockholder advances	479,076	456,376
Convertible debentures
Accrued interest and penalties payable	$ 1,555,568	1,141,478
Convertible debentures | Minimum
Debt Instrument, Convertible, Conversion Price	$ 0.00025
Convertible debentures | Maximum
Debt Instrument, Convertible, Conversion Price	$ 30.00
Family member of Executive Officers 1
Debt Instrument, Face Amount	$ 5,000	5,000
Family member of Executive Officers 2
Debt Instrument, Face Amount	46,600	46,600
Family member of Executive Officers 3
Debt Instrument, Face Amount	112,663	112,663
Family member of Executive Officers 4
Debt Instrument, Face Amount	8,000	8,000
Family of officers and directors
Stockholder advances	83,023	83,023
Family of officers and directors | Convertible debentures
Accrued interest and penalties payable	$ 39,399	$ 30,731
Family of officers and directors | Convertible debentures | Minimum
Debt Instrument, Convertible, Conversion Price	$ 0.0025
Family of officers and directors | Convertible debentures | Maximum
Debt Instrument, Convertible, Conversion Price	$ 30

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Note 14 - Supplemental Statement of Cash Flows Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Taxes Paid	$ 0	$ 0
Interest Paid	15,430	70,187
Accrued interest and penalties payable	437,130	72,071
Transaction 1
Increase (decrease) in debt discount	260,000	48,100
Increase (Decrease) in Derivative Liabilities	260,000
Transaction 1 | Additional Paid-In Capital
Adjustments to Additional Paid in Capital, Convertible Debt with Conversion Feature		48,100
Transaction 2
Increase (decrease) in debt discount	(10,633)	721,575
Increase (Decrease) in Derivative Liabilities	(77,942)	721,575
Debt Instrument, Increase (Decrease), Net	(39,000)
Transaction 2 | Common Stock
Common stock issued for conversion of debt, Value	63,214
Transaction 2 | Additional Paid-In Capital
Common stock issued for conversion of debt, Value	38,571
Transaction 2 | Convertible debentures
Accrued interest and penalties payable	(1,356)
Transaction 3 | Convertible debentures
Debt Instrument, Increase (Decrease), Net		128,460
Increase (decrease) in stockholder advances		(128,460)
Transaction 3 | Note Payable
Debt Instrument, Increase (Decrease), Net	(4,973)
Increase (decrease) in stockholder advances	4,973
Transaction 4
Increase (decrease) in debt discount		(30,603)
Increase (Decrease) in Derivative Liabilities		(244,784)
Transaction 4 | Common Stock
Common stock issued for conversion of debt, Value		201,216
Transaction 4 | Additional Paid-In Capital
Common stock issued for conversion of debt, Value	20	94,820
Transaction 4 | Preferred Stock | Series AA Preferred Stock
Debt Instrument, Increase (Decrease), Net	$ (20)
Transaction 4 | Convertible debentures
Accrued interest and penalties payable		(1,569)
Debt Instrument, Increase (Decrease), Net		$ (59,925)

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Note 16 - Contingencies (Details) - USD ($)	1 Months Ended		3 Months Ended
	Dec. 31, 2014	Nov. 30, 2014	Mar. 31, 2016
Darling Capital LLC
Loss Contingency, Damages Sought, Value		$ 57,627
Litigation Settlement, Amount			$ 70,000
Payments for Legal Settlements			10,000
WHC Capital LLC
Loss Contingency, Damages Sought, Value	$ 416,000
Litigation Settlement, Amount			$ 130,000
Loss Contingency, Allegations	alleging the Company's breach of contract and failure to deliver 22,545,900 shares of common stock pursuant to requested conversions of two promissory notes totaling $65,403.

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Note 17 - Subsequent Events (Details) - USD ($)	1 Months Ended	3 Months Ended
	Apr. 30, 2016	Mar. 31, 2016	Mar. 31, 2015
Debt Conversion, Original Debt, Amount		$ 101,785	$ 296,036
Common Stock
Debt Conversion, Converted Instrument, Shares Issued		25,285,602	80,486,541
Subsequent Event
Debt Instrument, Face Amount	$ 89,165
Increase (decrease) in stockholder advances	14,165
Subsequent Event | Principal
Debt Conversion, Original Debt, Amount	10,000
Subsequent Event | Interest
Debt Conversion, Original Debt, Amount	$ 528
Subsequent Event | Common Stock
Debt Conversion, Converted Instrument, Shares Issued	10,026,876
Subsequent Event | Convertible debentures
Debt Instrument, Face Amount	$ 65,000
Subsequent Event | Note Payable
Debt Instrument, Face Amount	$ 10,000