Attached files
file | filename |
---|---|
EX-31.1 - EXHIBIT 31.1 - MOLLER INTERNATIONAL INC | a6105566ex311.htm |
EX-32.2 - EXHIBIT 32.2 - MOLLER INTERNATIONAL INC | a6105566ex322.htm |
EX-32.1 - EXHIBIT 32.1 - MOLLER INTERNATIONAL INC | a6105566ex321.htm |
EX-31.2 - EXHIBIT 31.2 - MOLLER INTERNATIONAL INC | a6105566ex312.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON
D.C. 20549
FORM
10-Q
x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the quarterly period ended September 30, 2009
OR
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Commission
File No. 000-33173
Moller
International, Inc.
(Exact
name of registrant as specified in its charter)
California
|
68-0006075
|
|
(State
or other jurisdiction of incorporation)
|
(I.R.S.
Employer Identification No.)
|
|
1222
Research Park Drive, Davis CA
|
95618
|
|
(Address
of Principal Executive Office)
|
(Zip
Code)
|
Registrant’s
telephone number, including area code: (530) 756-5086
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, and (2) has been subject to such filing
requirements for the past 90 days.
Yes x
No
o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large
accelerated filer
|
o |
Accelerated
filer
|
o | |
Non-accelerated
filer
(Do
not check if a smaller reporting company)
|
o |
Smaller
reporting company
|
x |
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).Yes o No x
At
November 20, 2009, there were 47,746,177 shares of common stock
outstanding.
TABLE
OF CONTENTS
|
|
Page
#
|
|
1
|
|
2
|
|
3
|
|
4
|
|
6
|
|
7
|
|
7
|
|
8
|
|
8
|
|
8
|
|
8
|
|
8
|
|
9
|
|
EXHIBITS
|
|
Exhibit
31.1 Certification Pursuant to Section
302 of the Sarbanes Oxley Act
|
10
|
Exhibit
31.2 Certification Pursuant to Section
302 of the Sarbanes Oxley Act
|
11
|
Exhibit
32.1 Certification Pursuant to Section
906 of the Sarbanes Oxley Act
|
12
|
Exhibit
32.2 Certification Pursuant to Section
906 of the Sarbanes Oxley Act
|
13
|
ii
MOLLER
INTERNATIONAL, INC.
|
||||||||
Unaudited
|
||||||||
September
30, 2009
|
June
30, 2009
|
|||||||
ASSETS
|
||||||||
CURRENT
ASSETS
|
||||||||
Cash
|
$ | 15,700 | $ | 3,276 | ||||
Advances
to Employees
|
588 | 639 | ||||||
Accounts
Receivable Other
|
441 | 441 | ||||||
Total
current assets
|
16,729 | 4,356 | ||||||
PROPERTY
AND EQUIPMENT, net of accumulated depreciation
|
11,214 | 11,214 | ||||||
OTHER
ASSETS
|
319 | 353 | ||||||
$ | 28,262 | $ | 15,923 | |||||
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Accounts
payable
|
$ | 658,181 | $ | 644,099 | ||||
Accrued
liabilities
|
452,869 | 469,130 | ||||||
Accrued
liabilities-related parties
|
508,581 | 486,984 | ||||||
Accrued
liabilities-majority shareholder
|
3,089,563 | 2,887,346 | ||||||
Notes
payable-other
|
978,182 | 978,182 | ||||||
Note
payable - majority shareholder
|
3,170,979 | 3,105,357 | ||||||
Notes
payable - minority shareholders
|
100,807 | 369,307 | ||||||
Notes
payable - related parties
|
1,735,666 | 1,735,766 | ||||||
Deferred
wages - employees
|
304,019 | 309,643 | ||||||
Customer
deposits
|
394,767 | 394,767 | ||||||
Total
current liabilities
|
11,393,614 | 11,380,581 | ||||||
LONG
TERM LIABILITIES
|
||||||||
Deferred
wages and interest-majority shareholder
|
1,170,210 | 1,085,414 | ||||||
Total
liabilities
|
12,563,824 | 12,465,995 | ||||||
Commitments
and contingencies
|
||||||||
STOCKHOLDERS'
DEFICIT
|
||||||||
Common
stock, authorized, 150,000,000 shares, no par value
|
||||||||
47,602,173
and 45,980,565 issued and outstanding respectively
|
32,989,900 | 32,712,733 | ||||||
Accumulated
deficit
|
(45,525,462 | ) | (45,162,805 | ) | ||||
Total
stockholders' deficit
|
(12,535,562 | ) | (12,450,072 | ) | ||||
$ | 28,262 | $ | 15,923 |
See
accompanying notes to unaudited consolidated financial statements.
1
MOLLER
INTERNATIONAL, INC.
|
||||||||
Unaudited
|
||||||||
Three
Months Ended
|
||||||||
September
30, 2009
|
September
30, 2008
|
|||||||
REVENUE
|
||||||||
Revenues-
related parties
|
$ | 47,266 | $ | - | ||||
Other
revenue
|
3,133 | 2,851 | ||||||
Total
revenues
|
50,399 | 2,851 | ||||||
COST
OF REVENUE
|
||||||||
Direct
project expenses
|
696 | 65,303 | ||||||
Gross
profit (loss)
|
49,703 | (62,452 | ) | |||||
OPERATING
EXPENSES
|
||||||||
Selling,
general and administrative
|
145,490 | 268,705 | ||||||
Rent
expense to majority shareholder
|
132,274 | 132,036 | ||||||
Depreciation
and amortization
|
- | 180 | ||||||
Total
operating expenses
|
277,764 | 400,921 | ||||||
Operating
loss
|
(228,061 | ) | (463,373 | ) | ||||
OTHER
EXPENSE
|
||||||||
Interest
expense
|
56,579 | 63,401 | ||||||
Interest
expense- majority shareholder
|
78,017 | 74,420 | ||||||
Total
other expense
|
134,596 | 137,821 | ||||||
NET
LOSS
|
$ | (362,657 | ) | $ | (601,194 | ) | ||
Loss
per common share, basic and diluted
|
$ | (0.01 | ) | $ | (0.01 | ) | ||
Weighted
average common shares outstanding
|
47,486,025 | 45,737,602 |
See
accompanying notes to unaudited consolidated financial statements.
2
MOLLER
INTERNATIONAL INC.
|
||||||||
Unaudited
|
||||||||
Three
Months Ended
|
||||||||
September
30,
|
September
30,
|
|||||||
2009
|
2008
|
|||||||
Cash
Flows From Operating Activities
|
||||||||
Net
Loss
|
$ | (362,657 | ) | $ | (601,194 | ) | ||
Adjustments
to reconcile net loss
|
||||||||
to
net cash used in operating activities:
|
||||||||
Depreciation
expense
|
- | 180 | ||||||
Stock-based
compensation
|
4,667 | 78,148 | ||||||
Change
in operating assets and liabilities:
|
||||||||
Accounts
receivable
|
51 | 717 | ||||||
Accounts
payable
|
14,082 | 27,480 | ||||||
Accrued
liabilities-related parties
|
223,814 | 223,329 | ||||||
Accrued
liabilities
|
(16,261 | ) | 15,966 | |||||
Other
liabilities
|
79,172 | 97,236 | ||||||
Other
assets
|
34 | 492 | ||||||
Net
Cash Used in Operating Activities
|
$ | (57,098 | ) | $ | (157,646 | ) | ||
Cash
Flows Provided by Financing Activities
|
||||||||
Proceeds
from related party notes payable
|
$ | 80,397 | $ | 170,423 | ||||
Payments
on related party note payable
|
(10,875 | ) | (12,777 | ) | ||||
Net
Cash Provided by Financing Activities
|
$ | 69,522 | $ | 157,646 | ||||
Net
Increase In Cash
|
$ | 12,424 | $ | - | ||||
Cash,
Beginning of Period
|
$ | 3,276 | $ | - | ||||
Cash,
End of Period
|
$ | 15,700 | $ | - | ||||
Cash
paid during the year for:
|
||||||||
Interest
|
$ | - | $ | - | ||||
Income
taxes
|
- | - | ||||||
Supplemental
disclosure of non-cash financing activities
Contributed
capital in the form of contributed
|
||||||||
common
shares
|
$ | - | $ | 50,000 | ||||
Shares
issued as repayment of debt
|
272,500 | - |
See
accompanying notes to unaudited consolidated financial statements.
3
Moller
International, Inc.
Unaudited
NOTE A
–BASIS OF PRESENTATION
The
accompanying unaudited financial statements of Moller International, Inc. (“MI”)
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form
10-Q. Accordingly, these financial statements may not include all of
the information and disclosures required by generally accepted accounting
principles for complete financial statements. These financial statements should
be read in conjunction with the audited financial statements and the notes
thereto for the fiscal year ending June 30, 2009 filed on Form 10-K. In the
opinion of management, the accompanying unaudited financial statements contain
all adjustments necessary to fairly present MI’s financial position as of
September 30, 2009, and its results of operations and its cash flows for the
three months ended September 30, 2009 and 2008. The results of operations for
the interim periods are not necessarily indicative of the results to be expected
for the full year. Notes to the consolidated financial statements
which would substantially duplicate the disclosure contained in the audited
consolidated financial statements for 2009 as reported in the 10-K have been
omitted.
Recently
Adopted Accounting Pronouncements
Effective
this quarter, MI adopted The
FASB Accounting Standards Codification (ASC or Codification) and the Hierarchy
of Generally Accepted Accounting Principles (GAAP) which establishes the
Codification as the sole source for authoritative U.S. GAAP and will supersede
all accounting standards in U.S. GAAP, aside from those issued by the SEC. The
adoption of the Codification did not have an impact on MI’s financial position,
results of operations or cash flows. Since the adoption of the Accounting
Standards Codification (ASC) the notes to the consolidated financial
statements will no longer make reference to Statement of Financial Accounting
Standards (SFAS) or other U.S. GAAP pronouncements.
MI does
not expect the adoption of any other recently issued accounting pronouncements
to have a significant impact on its financial position, results of operations or
cash flows.
NOTE B –
GOING CONCERN
As shown
in the accompanying financial statements, MI has an accumulated deficits of
$45,525,462 and a working capital deficit of $11,376,885 as of September 30,
2009. MI currently has limited recurring revenue-producing products
and is continuing its development of products in both the Skycar and Rotapower
engine programs. Successful completion of product development
activities for either or both of these programs will require significant
additional sources of capital. Continuation as a going concern is
dependent upon MI’s ability to obtain additional financing sufficient to
complete product development activities and provide working capital to fund the
manufacture and sale of MI’s products. These factors raise substantial doubt as
to MI’s ability to continue as a going concern. Historically, funding
was funded by certain shareholders, including, Dr. Paul S. Moller (“Dr.
Moller”), the majority shareholder, in the form of short-term notes payable. As
of September 30, 2009, amounts outstanding to Dr. Moller total $3,170,979. In
addition, Dr. Moller has granted MI a deferral on the payment of rent for the
office building. The total deferred rent, including interest owed to Dr. Moller
at September 30, 2009 amounted to $3,089,563. There is no assurance
that MI will continue to receive funding from shareholders in the future or that
funds from other sources will be sufficient to provide MI with the capital
needed to continue as a going concern. The financial statements do
not include any adjustments that might result from the outcome of these
uncertainties.
4
On May 18,
2009, Dr. Moller has filed for protection under the Chapter 11 reorganization
provisions of the federal bankruptcy law. With the outcome of these
proceedings as yet undetermined, there is uncertainty over the potential impact
on MI, if any. The impact of this action on MI’s ability to raise
needed capital as well as the possibility that Dr. Moller could lose some or all
of his holdings in MI to third party creditors has not been
determined.
NOTE C –
NOTES PAYABLE – RELATED PARTIES
During the
quarter ended September 30, 2009, MI made additional borrowings from related
parties of $10,397 and made repayments of $283,375, of which $272,500 were
repaid through issuance of 1,602,941 common shares.
NOTE D -
STOCK-BASED COMPENSATION
During the
quarter ended September 30, 2009, MI issued 18,667 shares for services to an
outside consultant with a fair market value at the date of issuance
of $4,667.
Options
outstanding and exercisable as of September 30, 2009 totaled 10,029,044 with a
weighted average exercise price and remaining life of $0.43 and 3.46 years,
respectively. As of September 30, 2009, 6,581,040 of these options have an
intrinsic value of $290,336. There were no new stock options granted during the
quarter.
NOTE E -
LITIGATION AND CONTINGENCIES
J.F.
Wilson & Associates Ltd. V. Estate of Percy Symens, et al.
Moller
International (MI) is named as a defendant in a lawsuit pending in Yolo County,
California Superior Court – J.F. Wilson & Associates Ltd. V. Estate of Percy
Symens, et al. The complaint, filed in April 2005, alleges that MI unlawfully
discharged solvents into the environment while doing business at 203 J Street
and 920 Third Street in Davis, California during 1968 to 1980. The complaint
seeks injunctive relief and damages of an unspecified amount. The Company’s
Answer, which denies the allegations in the complaint, was filed in June of
2005, and initial discovery commenced in August of 2005. The case has not been
set for trial. On December 20, 2006, defendant and cross-complainant Donald M.
Miller died; and on January 7, 2008, the court ordered a stay of proceedings
until the court’s Probate Department rules on an application for letters of
instruction in connection with Mr. Miller’s estate. The court’s Probate
Department has not yet issued a ruling, and the stay remains in
place.
In a
related administrative proceeding initiated on September 26, 2006, the
California Central Valley Regional Water Quality Control Board (RWQCB) issued a
draft Cleanup and Abatement Order (CAO) in connection with the property at 920
Third Street. MI was named as one of the responsible parties in the draft
CAO, and intends to challenge the characterization of MI as a discharger of
environmental contaminants, while also complying with the orders of the RWQCB.
MI and other parties have submitted comments regarding the draft cleanup and
abatement order. The draft CAO has not been finalized. The property owner is
proceeding with work to investigate, characterize and remediate the soil and
groundwater contamination at this property, with RWQCB
oversight.
MI’s
probable loss has been estimated at this time in the range of $200,000 to
$1,000,000 and has accrued $200,000. It is reasonably possible that these
estimates may be significantly revised as the site investigation and other
research and analysis proceeds. MI will continue to assess its potential loss in
the future as more information is available.
5
NOTE F –
SUBSEQUENT EVENTS
The
Company evaluated all events or transactions that occurred after September 30,
2009 up through November 20, 2009, the date we issued these financial statements
and noted the following non-recognizable subsequent events:
a.)
|
On
October 1, 2009 the Company issued 21,277 shares of its common stock in
accordance with an ongoing agreement for services to a consultant of the
Company. These shares were valued at $0.235 per share determined from the
closing price of the Company’s stock at date of
issuance.
|
b.)
|
On
October 20, 2009 the Company issued 100,000 shares of its common stock to
their legal counsel for past services performed. These shares were valued
at $0.27 per share determined from the closing price of the Company’s
stock at date of issuance.
|
c.)
|
On
November 2, 2009 the Company issued 22,727 shares of its common stock to
an outside consultant for services rendered. These shares were
valued at $0.22 per share determined from the closing price of the
Company’s stock at date of
issuance.
|
Results of
Operations
Three
months ended September 30, 2009 and September 30, 2008
For the
three-months ended September 30, 2009, we had a net loss of $362,657 or $0.01
loss per share as compared to a net loss of $601,194 or $0.01 loss per share for
the same period of 2008. We continue to pursue the development of the
Skycar, Rotapower engine and Aerobot products. We currently propose to produce
variations of it M200X, an earlier prototype volantor. Although there
is no assurance that this vehicle will meet with success in the market place,
the Company is actively seeking support for the program and, if found, may
choose to move into the production of these vehicles.
Going
Concern and Liquidity
As shown
in the accompanying financial statements, MI has an accumulated deficits of
$45,525,462 and a working capital deficit of $11,376,885 as of September 30,
2009. MI currently has limited recurring revenue-producing products
and is continuing its development of products in both the Skycar and Rotapower
engine programs. Successful completion of product development
activities for either or both of these programs will require significant
additional sources of capital. Continuation as a going concern is
dependent upon MI’s ability to obtain additional financing sufficient to
complete product development activities and provide working capital to fund the
manufacture and sale of MI’s products. These factors raise substantial doubt as
to MI’s ability to continue as a going concern. Historically, funding
was funded by certain shareholders, including, Dr. Paul S. Moller (“Dr.
Moller”), the majority shareholder, in the form of short-term notes payable. As
of September 30, 2009, amounts outstanding to Dr. Moller total $3,170,979. In
addition, Dr. Moller has granted MI a deferral on the payment of rent for the
office building. The total deferred rent, including interest owed to Dr. Moller
at September 30, 2009 amounted to $3,089,563. There is no assurance
that MI will continue to receive funding from shareholders in the future or that
funds from other sources will be sufficient to provide MI with the capital
needed to continue as a going concern. The financial statements do
not include any adjustments that might result from the outcome of these
uncertainties.
6
On May 18,
2009, Dr. Moller has filed for protection under the Chapter 11 reorganization
provisions of the federal bankruptcy law. With the outcome of these
proceedings as yet undetermined, there is uncertainty over the potential impact
on MI, if any. The impact of this action on MI’s ability to raise
needed capital as well as the possibility that Dr. Moller could lose some or all
of his holdings in MI to third party creditors has not been
determined.
As a
smaller reporting company we are not required to report items under this
section.
Evaluation
of Disclosure Controls and Procedures
Our
President, Paul Moller, acts as the "Certifying Officer" for the Company and is
responsible for establishing and maintaining disclosure controls and procedures.
The Certifying Officer has designed such disclosure controls and procedures to
ensure that material information is made known to him, particularly during the
period in which this report was prepared. The Certifying Officer has evaluated
the effectiveness of our disclosure controls and procedures as of the date of
this report and believes that the disclosure controls and procedures are not
effective based on the required evaluation. We believe this is due to
the limited resources devoted to accounting and financial reporting during this
reporting period and the Company will continue to remedy the shortfall by hiring
additional personnel to address its accounting and financial reporting functions
as soon as possible and when funding becomes available.
Changes in
Internal Controls Over Financial Reporting
There have
been no changes in the company’s internal controls over Financial Reporting
since the year ended June 30, 2009.
7
J.F.
Wilson & Associates Ltd. V. Estate of Percy Symens, et al.
Moller
International (MI) is named as a defendant in a lawsuit pending in Yolo County,
California Superior Court – J.F. Wilson & Associates Ltd. V. Estate of Percy
Symens, et al. The complaint, filed in April 2005, alleges that MI unlawfully
discharged solvents into the environment while doing business at 203 J Street
and 920 Third Street in Davis, California during 1968 to 1980. The complaint
seeks injunctive relief and damages of an unspecified amount. The Company’s
Answer, which denies the allegations in the complaint, was filed in June of
2005, and initial discovery commenced in August of 2005. The case has not been
set for trial. On December 20, 2006, defendant and cross-complainant Donald M.
Miller died; and on January 7, 2008, the court ordered a stay of proceedings
until the court’s Probate Department rules on an application for letters of
instruction in connection with Mr. Miller’s estate. The court’s Probate
Department has not yet issued a ruling, and the stay remains in
place.
In a
related administrative proceeding initiated on September 26, 2006, the
California Central Valley Regional Water Quality Control Board (RWQCB) issued a
draft Cleanup and Abatement Order (CAO) in connection with the property at 920
Third Street. MI was named as one of the responsible parties in the draft
CAO, and intends to challenge the characterization of MI as a discharger of
environmental contaminants, while also complying with the orders of the RWQCB.
MI and other parties have submitted comments regarding the draft cleanup and
abatement order. The draft CAO has not been finalized. The property owner is
proceeding with work to investigate, characterize and remediate the soil and
groundwater contamination at this property, with RWQCB
oversight.
MI’s
probable loss has been estimated at this time in the range of $200,000 to
$1,000,000 and has accrued $200,000. It is reasonably possible that these
estimates may be significantly revised as the site investigation and other
research and analysis proceeds. MI will continue to assess its potential loss in
the future as more information is available.
United
States Bankruptcy Court: Paul S. Moller/Rosa Maria Moller, Case
#09-29936-C-11
Moller
International’s President and majority shareholder, Paul S. Moller (“Dr.
Moller”), has filed for protection under the Chapter 11 reorganization
provisions of the federal bankruptcy law. The application was filed on 18 May
2009 in U.S. Bankruptcy Court for the Eastern District of California in
Sacramento.
The
proceedings are underway but no final outcome has yet to be made. MI will
continue to assess it potential loss in the future as more information is
available.
Not
applicable
None
None
8
None
ITEM
6 - EXHIBITS
(a.) Exhibits
|
||
Exhibit No.
|
Description
|
|
31.1
|
Certification
of CEO
|
|
31.2
|
Certification
of CFO
|
|
32.1
|
Certification
of CEO
|
|
32.2
|
Certification
of CFO
|
In
accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|
MOLLER
INTERNATIONAL, INC.
|
|||
November 20,
2009
|
/s/ Paul S. Moller | ||
Date
|
Paul
S. Moller, Ph.D.
|
||
President,
CEO, Chairman of the Board
|
|||
9