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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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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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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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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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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7
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8
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EXHIBITS
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December 31, 2013
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June 30, 2013
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|||||||
ASSETS
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||||||||
CURRENT ASSETS
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||||||||
Cash
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$
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29,476
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$
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5,015
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||||
Advances to employees
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551
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1,038
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||||||
Prepaid Expenses
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6,517
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-
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||||||
Total current assets
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36,544
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6,053
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||||||
PROPERTY AND EQUIPMENT, net
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7,246
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7,846
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||||||
$
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43,790
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$
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13,899
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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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640,330
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$
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701,798
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||||
Accrued liabilities
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878,746
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805,528
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||||||
Accrued liabilities-majority shareholder
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6,234,752
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5,860,191
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||||||
Notes payable-other
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1,261,182
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1,333,682
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||||||
Note payable - majority shareholder
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2,327,370
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2,476,382
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||||||
Convertible notes payable, net of discount of $53,569 and $46,575
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277,089
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234,805
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||||||
Notes payable - minority shareholders
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208,591
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208,591
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||||||
Derivative Liability
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275,745
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492,461
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||||||
Deferred wages – employees
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964,956
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881,886
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||||||
Customer deposits
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384,767
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387,767
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||||||
Total current liabilities
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13,453,528
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13,383,091
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||||||
LONG TERM LIABILITIES
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||||||||
Deferred wages and interest-majority shareholder
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1,229,868
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1,073,080
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||||||
Total liabilities
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14,683,396
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14,456,171
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||||||
DEFICIT IN STOCKHOLDERS' DEFICIT
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||||||||
Common stock, authorized, 150,000,000 shares, no par value
52,208,529 and 49,094,675 issued and outstanding respectively
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38,541,504
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38,039,975
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||||||
Accumulated deficit
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(53,181,110
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)
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(52,482,247
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)
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||||
Total stockholders' deficit
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( 14,639,606
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)
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(14,442,272
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)
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||||
$
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43,790
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$
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13,899
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Three Months Ended
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Six Months Ended
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|||||||||||||||
December 31, 2013
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December 31, 2012
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December 31, 2013
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December 31, 2012
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REVENUE
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||||||||||||||||
Other revenue
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$
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3,732
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$
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-
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3,756
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$
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-
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OPERATING EXPENSES
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||||||||||||||||
Selling, general and administrative
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142,349
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159,115
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275,850
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312,206
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Depreciation and Amortization Expense
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367
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600
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||||||||||||||
Legal, Accounting, & Professional Fees
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4,360
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5,660
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||||||||||||||
Research and Development
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-
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3,290
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||||||||||||||
Rent expense to majority shareholder
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132,652
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91,252
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120,001
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121,304
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||||||||||||
Total expenses
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279,728
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250,367
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405,401
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433,510
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Operating Loss
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(275,996
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)
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(250,367
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)
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(401,645
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)
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(433,510
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)
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||||||||
OTHER EXPENSE
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||||||||||||||||
Derivative gain (loss)
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(201,203
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)
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-
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52,209
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(38,776)
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|||||||||||
Interest expense
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(115,438
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)
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(37,098
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)
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(196,641
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)
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(141,856
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)
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Interest expense- majority shareholder
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(74,610
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)
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(80,033
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)
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(149,498
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)
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(157,875
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)
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||||||||
Total other expense
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(391,251
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)
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(117,131
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)
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(293,930
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)
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(338,507
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)
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||||||||
NET INCOME (LOSS)
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$
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(667,247
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)
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$
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(367,498
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)
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$
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(695,575
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)
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$
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(772,017
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)
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Loss per common share, basic
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$
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(0.01
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)
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$
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(0.01
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)
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$
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(0.01
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)
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$
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(0.02
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)
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Loss per common share, diluted
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$
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(0.01
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)
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$
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(0.01
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)
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$
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(0.01
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)
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$
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(0.02
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)
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||||
Weighted average common shares outstanding - Basic
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51,153,091
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49,074,522
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50,219,311
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49,057,799
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||||||||||||
Weighted average common shares outstanding - Diluted
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51,153,091
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49,074,522
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50,219,311
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49,057,799
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Six Months Ended
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||||||||
December 31
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December 31
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|||||||
2013
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2012
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Cash Flows From Operating Activities
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||||||||
Net loss
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$
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(695,575
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)
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$
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(772,017
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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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600
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466
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Derivative (gain)/loss
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(52,209)
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38,776
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Stock based compensation
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34,630
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19,255
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Debt discount amortization
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99,228
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68,347
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Change in assets and liabilities:
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||||||||
Prepaid expenses
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(6,030
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)
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(4,088
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) | ||||
Other assets
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-
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319
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||||||
Accounts payable
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(21,308
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)
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(29,509
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) | ||||
Accrued liabilities - related parties
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531,349
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529,275
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Accrued liabilities and deferred wages
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153,288
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158,739
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Net Cash Provided By (Used in) Operating Activities
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$
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43,973
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$
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9,563
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Cash Flows Provided from Financing Activities
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Proceeds from convertible notes payable
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129,500
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-
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Payments on related party note payable
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(149,012
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)
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(11,173
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)
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Net Cash Provided by (Used in) Financing Activities
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$
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(19,512
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)
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$
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(11,173
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)
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Net Increase (Decrease) In Cash
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$
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24,461
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$
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(1,610
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)
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Cash, Beginning of Year
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$
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5,015
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$
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2,123
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Cash, End of Year
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$
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29,476
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$
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513
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Supplemental Cash Flow Information:
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Interest paid
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$
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1,715
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$
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31,376
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Supplemental Disclosure of Non-Cash
Financing Activities:
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||||||||
Write off of derivative liability to additional paid-in capital
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270,729
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-
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||||||
Shares issued as repayment customer deposit
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-
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772,017
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||||||
N/P converted to common stock
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147,222
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-
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Debt discount for derivative liability
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106,222
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-
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||||||
Shares issued to settle accounts payable
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47,538
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-
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Derivative Liabilities
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||||
June 30, 2013
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$
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492,461
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Additions to derivatives
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106,222
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Write off of derivative liability to additional paid-in capital due to conversion of related notes payable
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(270,729)
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|||
Change in fair value
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(52,209)
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|||
December 31, 2013
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$
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275,745
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Level 1
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Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
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Level 2
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Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and
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Level 3
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Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).
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Total
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Level 1
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Level 2
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Level 3
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|||||||||||||
LIABILITIES:
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||||||||||||||||
Derivative liabilities- 12/31/2013
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275,745
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-
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-
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275,745
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||||||||||||
Derivative liabilities – 6/30/2013
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492,461
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492,461
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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
|
XBRL Instance Document
|
||
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
||
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
||
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
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101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
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MOLLER INTERNATIONAL, INC.
|
|||
Date: February 20, 2014
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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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end
NOTE D - NOTES PAYABLE & DERIVATIVE LIABILITIES
|
6 Months Ended | ||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2013
|
|||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||
Debt Disclosure [Text Block] |
NOTE D – NOTES PAYABLE & DERIVATIVE LIABILITIES
Notes Payable
During the six months ended December 31, 2013 and 2012 MI made repayments on related party notes payable of $149,012 and $11,173, respectively.
Convertible Notes Payable & Derivative Liabilities
During the six months ended December 31, 2013 and 2012 MI received $129,500 related to convertible promissory notes. The borrowings are due nine to twelve months after issuance, carry an interest rate of 0% to 8% for 90 days, then increases to 12%, and is convertible into common stock at the lesser of $0.24 or 60% of the lowest trading price in the 25 trading days prior to conversion and for some instruments 53% and 58% of the average of the three lowest days in the ten trading days prior to conversion. During the six months ended December 31, 2013, promissory notes totaling $147,222 were converted to 2,651,874 shares of MI common stock.
The Company analyzed the conversion options for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that for the instruments immediately convertible, the embedded conversion features should be classified as liabilities due to their being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. The embedded conversion features were measured at fair value at inception with the change in fair value recorded to earnings. Additionally, because there is no explicit limit to the number of shares to be issued upon conversion of the above instruments, the Company cannot determine if it will have sufficient authorized shares to settle all other share-settleable instruments, including the warrants granted above. As a result,
all other share-settable instruments have also been classified as liabilities.
Discount amortization charged to interest expense during the six months ended December 31, 2013, totaled $99,228.
|