Attached files
| file | filename |
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| EXCEL - IDEA: XBRL DOCUMENT - MOLLER INTERNATIONAL INC | Financial_Report.xls |
| EX-31.2 - MOLLER INTERNATIONAL INC | ex31-2.htm |
| EX-32.2 - MOLLER INTERNATIONAL INC | ex32-2.htm |
| EX-31.1 - MOLLER INTERNATIONAL INC | ex31-1.htm |
| EX-32.1 - MOLLER INTERNATIONAL INC | ex32-1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended December 31, 2011
OR
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Commission File No. 000-33173
Moller International, Inc.
(Exact name of registrant as specified in its charter)
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California
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68-0006075
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(State or other jurisdiction of incorporation)
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(I.R.S. Employer Identification No.)
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1222 Research Park Drive, Davis CA
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95618
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(Address of Principal Executive Office)
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(Zip Code)
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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 ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No 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):
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Large accelerated filer ¨
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Accelerated filer ¨
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Non-accelerated filer ¨
(Do not check if a smaller reporting company)
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Smaller reporting company x
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
As of February 14, 2012, there were 48,844,910 shares of common stock outstanding.
TABLE OF CONTENTS
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Page
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PART I - FINANCIAL INFORMATION
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1
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1
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2
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3
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4
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6
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6
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6
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PART II - OTHER INFORMATION
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7
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7
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7
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7
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7
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8
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SIGNATURES
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9
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EXHIBITS
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PART I - FINANCIAL INFORMATION
ITEM 1 – FINANCIAL STATEMENTS
MOLLER INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
Unaudited|
December 31, 2011
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June 30, 2011
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|||||||
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ASSETS
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||||||||
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CURRENT ASSETS
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||||||||
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Cash
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$
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6,080
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$
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24,217
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Accounts receivable
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2,459
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2,459
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Prepaid Expenses
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4,201
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8,403
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Advances to employees
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1,086
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1,900
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Total current assets
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13,826
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36,979
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PROPERTY AND EQUIPMENT, net of accumulated depreciation
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9,218
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9,682
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OTHER ASSETS
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319
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319
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| TOTAL ASSETS |
$
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23,363
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$
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46,980
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LIABILITIES AND STOCKHOLDERS' DEFICIT
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CURRENT LIABILITIES
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Accounts payable, trade
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$
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694,025
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$
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681,949
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Accrued liabilities
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443,658
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392,478
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Accrued liabilities-majority shareholder
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4, 709,202
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4,310,018
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Notes payable-other
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991,182
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978,182
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Note payable - majority shareholder
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2,956,252
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3,072,846
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Notes payable - minority shareholders
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178,603
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158,603
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Deferred wages – employees
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634,322
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543,775
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Customer deposits
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389,767
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394,767
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Total current liabilities
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10,997,011
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10,532,618
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LONG TERM LIABILITIES
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Deferred wages and interest-majority shareholder
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640,034
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508,103
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Total liabilities
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11,637,045
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11,040,721
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STOCKHOLDERS' DEFICIT
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Common stock, authorized, 150,000,000 shares, no par value
48,695,395 and 48,404,062 issued and outstanding respectively
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37,957,579
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37,880,275
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Accumulated deficit
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(49,571,261
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)
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(48,874,016
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)
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Total stockholders' deficit
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(11,613,682
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)
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(10,993,741
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)
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TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
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$
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23,363
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$
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46,980
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See accompanying notes to unaudited consolidated financial statements.
MOLLER INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
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Three Months Ended
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Six Months Ended
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|||||||||||||||
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December 31, 2011
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December 31, 2010
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December 31, 2011
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December 31, 2010
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REVENUE
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Other revenue
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$ | 10,163 | $ | 3,419 | $ | 9,652 | $ | 6,934 | ||||||||
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OPERATING EXPENSES
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Selling, general and administrative
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201,368 | 108,077 | 360,071 | 198,373 | ||||||||||||
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Rent expense to majority shareholder
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115,617 | 132,267 | 132,459 | 264,534 | ||||||||||||
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Total expenses
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316,985 | 240,344 | 492,530 | 462,907 | ||||||||||||
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Operating Loss
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(306,822 | ) | (236,925 | ) | (482,878 | ) | (455,973 | ) | ||||||||
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OTHER EXPENSE
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||||||||||||||||
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Other income
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- | 949 | - | 949 | ||||||||||||
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Interest expense
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(28,687 | ) | (12,036 | ) | (56,650 | ) | (24,042 | ) | ||||||||
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Interest expense- majority shareholder
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(78,912 | ) | (112,136 | ) | (157,717 | ) | (222,331 | ) | ||||||||
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Total other expense
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(107,599 | ) | (123,223 | ) | (214,367 | ) | (245,424 | ) | ||||||||
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NET INCOME (LOSS)
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$ | (414,421 | ) | $ | (360,148 | ) | $ | (697,245 | ) | $ | (701,397 | ) | ||||
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Loss per common share, basic
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$ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | ||||
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Loss per common share, diluted
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$ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | ||||
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Weighted average common shares outstanding - Basic
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48,648,930 | 48,171,559 | 48,573,656 | 48,118,814 | ||||||||||||
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Weighted average common shares outstanding - Diluted
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48,648,930 | 48,171,559 | 48,573,656 | 48,118,814 | ||||||||||||
See accompanying notes to unaudited consolidated financial statements.
MOLLER INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
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Six Months Ended
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||||||||
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December 31,
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December 31,
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|||||||
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2011
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2010
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Cash Flows From Operating Activities
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Net loss
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$
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(697,245
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)
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$
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(701,397
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)
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Adjustments to reconcile net loss to net cash
Provided by (used in) operating activities:
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Depreciation expense
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464
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1,000
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Stock based compensation
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71,804
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60,154
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Change in assets and liabilities:
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Other assets
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4,202
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-
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Accounts payable
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12,076
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10,636
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Accrued liabilities - related parties
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399,184
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412,005
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Accrued liabilities
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51,680
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243,187
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Deferred wages
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222,478
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-
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Net Cash Provided By Operating Activities
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$
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64,643
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$
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25,585
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Cash Provided by Investing Activities
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Advances to employees
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$
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814
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$
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-
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Net Cash Provided by Investing Activities
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$
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814
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$
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-
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Cash Flows Used in Financing Activities
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Payments on related party note payable
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(116,594
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(61,311
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)
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Proceeds from notes payable
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33,000
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-
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Net Cash Used in Financing Activities
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$
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(83,594
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)
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$
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(61,311
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)
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Decrease in Cash
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$
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(18,137
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)
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$
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(35,726
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)
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Cash, Beginning of Period
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24,217
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50,102
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Cash, End of Period
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$
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6,080
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$
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14,376
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Supplemental Cash Flow Information:
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Interest paid
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$
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-
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$
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-
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Income taxes paid
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$
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-
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$
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-
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Supplemental Disclosure of Non-Cash:
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Financing Activities:
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Shares issued for customer deposits
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$
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5,500
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$
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-
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See accompanying notes to unaudited consolidated financial statements.
Moller International, Inc.
Notes To Consolidated Financial Statements
Unaudited
NOTE A – ORGANIZATION AND 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 ended June 30, 2011 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 December 31, 2011, and its results of operations and its cash flows for the six months ended December 31, 2011 and 2010. 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 2011 as reported in the 10-K have been omitted.
NOTE B – GOING CONCERN
As of December 31, 2011, MI had an accumulated deficit of $49,571,261 and a working capital deficit of $10,983,185. In addition, MI is currently in the development stage of the Skycar and Rotapower engine programs, and has no revenue producing products. Successful completion of product development activities for either or both of these programs will require significant additional sources of capital. These conditions raise substantial doubt as to our ability to continue as a going concern. Historically, funding was provided by certain shareholders, including the majority shareholder, in the form of short-term notes payable. In addition, the majority shareholder granted us a deferral on the payment of rent for our building. There is no assurance that we will continue to receive funding from shareholders, particularly our major shareholder given he has filed for protection under the federal Chapter 11 reorganization provisions of the federal bankruptcy law. Consequently, we are evaluating several alternatives to raise the additional capital through debt or equity transactions. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
NOTE C – NOTES PAYABLE
During the six months ended December 31, 2011, MI received $20,000 related to a note payable to a minority shareholder. The minority shareholder note payable accrues interest at 10% per annum and is payable, along with accrued interest, upon the occurrence of specified funding milestones. In conjunction with this note payable to a minority shareholder, MI issued the shareholder a total of 20,000 warrants to purchase common shares at an exercise price of $0.22 per share. The warrants vested on December 27, 2011, and expire on December 27, 2013.
In addition, during the six months ended December 31, 2011, MI received $13,000 in exchange for two notes payables. The notes payable accrue interest at 10% per annum and are payable upon demand.
During the six months ended December 31, 2011 and 2010, MI made repayments on related party notes payable of $116,594, and $61,311, respectively.
NOTE D - STOCK-BASED COMPENSATION
During the six months ended December 31, 2011, MI issued 291,333 shares of common stock for settlement of customer deposits, services to outside consultants and certain employees. We valued these shares at the fair market value on the dates of issuance of $68,584.
During the six months ended December 31, 2011, MI issued warrants to purchase 40,000 shares of common stock at a weighted average exercise price of $0.19 per share for settlement of service provided by outside consultants. Of the total granted, 20,000 warrants vested on December 16, 2011 and expire on February 26, 2014. As discussed in Note C, the remaining 20,000 warrants granted vested on December 27, 2011 and expire on December 27, 2013. The warrants granted have a fair value of $8,751, as calculated using the Black-Sholes model. Assumptions used in the Black-Scholes model included: (1) discount rate of 0.24-.28%; (2) expected term of 2.03 to 2.23 years; (3) expected volatility of 176-178% and (4) zero expected dividends.
A total of 40,000 warrants with a weighted average exercise price of $0.19 and a weighted average remaining life of 2.08 years were outstanding and exercisable as of December 31, 2011. These warrants have an intrinsic value of $4,560 as of December 31, 2011.
No options were issued or forfeited during the quarter ended December 31, 2011. A total of 32,097,740 options with a weighted average exercise price of $0.13 and a weighted average remaining life of 3.96 years were outstanding and exercisable as of December 31, 2011.
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. 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 ruled on an application for letters of instruction in connection with Mr. Miller’s estate. The court’s Probate Department issued a ruling on September 17, 2010; and in 2011 the court lifted the stay. Consequently, the litigation has begun to move into a more active phase.
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. The Company has accrued $200,000 against this estimated loss. It is reasonably possible that these estimates may be significantly revised as the site investigation and other research and analysis proceeds.
NOTE F - SUBSEQUENT EVENTS
Subsequent to December 31, 2011, the Company issued a total of 168,879 shares of common stock valued at $42,805 in accordance with ongoing agreements for services to consultants and employees working with the Company.
ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Three months Ended December 31, 2011 and December 31, 2010:
For the three-months ended December 31, 2011, we had a net loss of $414,421 or $0.01 loss per share as compared to a net loss of $360,148 or $0.01 loss per share for the same period of 2010. We continue to pursue the development activities on the Skycar, Rotapower engine project, primarily in the areas of its flight control system (FCS) and the performance advantages of introducing a hybrid approach to generating the high power required to take off and land. 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.
Six months Ended December 31, 2011 and December 31, 2010:
For the six-months ended December 31, 2011, we had a net loss of $697,245 or $0.01 loss per share as compared to a net loss of $701,397 or $0.01 loss per share for the same period of 2010. As stated above, we continue to pursue the development activities on the Skycar, Rotapower engine project, primarily in the areas of its flight control system (FCS) and the performance advantages of introducing a hybrid approach to generating the high power required to take off and land. 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 of December 31, 2011, MI had an accumulated deficit of $49,571,261 and a working capital deficit of $10,983,185. In addition, MI is currently in the development stage of the Skycar and Rotapower engine programs, and has no revenue producing products. Successful completion of product development activities for either or both of these programs will require significant additional sources of capital. These conditions raise substantial doubt as to our ability to continue as a going concern. Historically, funding was provided by certain shareholders, including the majority shareholder, in the form of short-term notes payable. In addition, the majority shareholder granted us a deferral on the payment of rent for our building. There is no assurance that we will continue to receive funding from shareholders, particularly our major shareholder, given he has filed for protection under the federal Chapter 11 reorganization provisions of the federal bankruptcy law. Consequently, we are evaluating several alternatives to raise the additional capital through debt or equity transactions. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
ITEM 3 - QUALITATIVE AND QUANTITATIVE CONCERNS ABOUT MARKET RISK
As a smaller reporting company we are not required to report items under this section.
ITEM 4 - CONTROLS AND PROCEDURES
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, 2011, although the company is conducting an internal audit with respect to the Sarbanes-Oxley Act provisions and expect the outcome of this audit to result in revisions to some of its existing processes and controls to take effect in the next reporting period.
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
None.
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS; PURCHASES OF EQUITY SECURITIES
Not applicable
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5 - OTHER MATTERS
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(a.)
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Reports on Form 8-K
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None
ITEM 6 - EXHIBITS
(a.) Exhibits
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Exhibit No.
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Description
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31.1
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31.2
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32.1
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32.2
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema Document
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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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.
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MOLLER INTERNATIONAL, INC.
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Date: February 21, 2012
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By:
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/s/ Paul S. Moller
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Paul S. Moller, Ph.D.
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President, CEO, Chairman of the Board
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