MOLLER INTERNATIONAL / FREEDOM MOTORS
Letter from the President
by Paul S. Moller
Volume 13, Issue 1 August 2013
To: Moller International Newsletter Subscribers
Our Skycar activities have mainly been focused on the detailed design of the Skycar 200. We have begun aerodynamic studies using a 1/12th scale physical model and are starting computer aided flow analysis on the Skycar 200 model. The aim is to validate the simulated flow-field analysis done on the computer with actual wind tunnel test data.
In addition, we have been providing technical support to American Space Industries (ASI) for a scale model reproduction of the Skycar 400. In late June, we licensed them to produce a sub-scale (approx. 1/7th scale) reproduction of the Skycar. Russell Decker, the CEO of ASI, plans to produce a battery-powered, radio controlled scale model of the Skycar 400 and we have been assisting them with design and performance requirements. His target for availability of the working scale model is October with a sub-$500 retail price.
Overseas Joint Venture
Our efforts to establish production facilities for the Skycar and its sub-systems in lower cost regions of the world continue. Progress is slow, particularly in China where everything is done by consensus and under a very risk-adverse environment. We expect to be able to give you a more definitive update in the near future.
Skycar Engine Production
Moller International retains the exclusive right to produce our Rotapower rotary engine for use in aircraft and ducted fans. It is anticipated however that over 80% of the parts used in these engines will be common to those used in the non-aviation engines being built by Freedom Motors or its newly created division, EcoRotary, Inc. For that reason much of our staff’s time has been devoted to assisting FM/EcoRotary and their efforts to get the basic Rotapower engine into production.
Independent Activity by Moller International Stockholders
Shortly after Moller International became a fully-reporting public company in 2002, its stockholders became extremely upset when they became aware of what they felt was a very misleading press release issued by the Securities and Exchange Commission (SEC). They believed this press release was instigated by a junior SEC attorney as a personal vendetta against Moller International and its president.
In 2003, they formed a group called “Stockholders of Moller International” or SOMI to document the details surrounding what they felt was highly egregious behavior by this SEC attorney. SOMI has asked Moller International to provide its newsletter subscribers with the following website address (www.SOMI2003.org) which documents in detail the history of this dispute.
Status of the Regulation A Offering
Freedom Motors had put its effort to raise capital through a Regulation A offering on hold while it undertook a detailed cost analysis of engine production. This analysis included production costs for domestic and off-shore manufacturing. This information was used to determine whether it should raise capital through a Regulation A offering or just register its stock as Moller International did in 2002. Registering its existing issued and outstanding shares would allow existing shareholders to buy and sell shares publicly but the Company would not be allowed to sell new shares into the market through this process. Registration is, therefore, a much simpler process. Because of delays in obtaining alternative funding we are now preceding with the Regulation A offering and moving forward with renewed vigor.
Freedom Motors is undertaking production in two phases. In Phase 1, the Company will begin Beta production of 400 engines, 200 each of the single-rotor version of the 150cc and 450cc displacement Rotapower engines. This will allow Freedom Motors to provide engines to the many original equipment manufacturers (OEM) that have provided letters of intent (LOI) to purchase engines. This list now totals requests for over 3 million engines.
This Beta production run will require funding of $2.5 million and will make it possible to turn many of the LOI into firm orders. Beta production will take place in Davis, California. In Phase 2, Freedom Motors intends to substantially increase engine production in order to meet the demand represented by these orders. This Phase will require an additional $7.5 million in funding. However, with firm orders in place, raising these funds will be far less challenging. This production phase is scheduled to take place in Phoenix, Arizona within a new division of Freedom Motors called EcoRotary, Inc. The business climate in Arizona is much more favorable than that in California. EcoRotary Inc. has been offered a number of financial incentives to locate engine production there.
Paul S. Moller, Ph.D.