Moller International, Inc. (OTCMKTS:MLER) Goes Vertical
Moller International, Inc. (OTCMKTS:MLER)’s business plan comes straight out of a sci-fi movie. They have set themselves the massively ambitious task of developing and commercializing an actual flying car.
Thanks to this, the company has received plenty of media coverage over the years. Documentaries and news segments have been dedicated to MLER‘s invention and numerous people have talked about how great it would be if you had the chance to leave traffic jams behind. The documentaries and news segments, however, have not been too keen on talking about the stock. And unfortunately, on that front, MLER‘s performance has been somewhat disappointing.
During the better part of April, for example, the ticker was barely keeping its head above the $0.01 per share mark. And once you take a closer look, you’ll see why. Building a flying car is not exactly cheap and it can’t be done overnight. The company has spent decades trying to (both literally and figuratively) get its machine off the ground, but it has managed to achieve little more than a few unmanned test flights.
It has also burnt through quite a lot of cash. MLER is late with the 10-Q for the period ended March 31 which means that the most up-to-date figures cover the fourth calendar quarter of last year. They look like this:
- cash: $16 thousand
- current assets: $45 thousand
- current liabilities: $14.2 million
- NO quarterly revenues
- quarterly net loss: $677 thousand
Not really the confidence-inspiring balance sheet of a company that is going to transform everyday transportation, you have to agree. And apparently, some people are no longer sure if MLER can do it at all. At the end of 2013, the company organized a crowdfunding campaign with the intention of raising $958 thousand. After two months, the contributed sum stood at less than $30 thousand.
So, about a month ago, MLER was in a pretty bad shape. The 10-Q was awful, there wasn’t any significant news, and people were rapidly losing hope. Over the last week or so, however, the stock has gone through an absolutely astonishing run.
It first grabbed the attention on May 15 when it managed to break through $0.02. Since then, it has registered five consecutive green sessions and, after a massive 84% jump on Friday, it reached a 52-week high of $0.12 per share.
The reason for this lies with MLER‘s monthly newsletter. In addition to the flying car, the company has also designed a revolutionary new type of engine. It’s called Rotapower and a few years ago, MLER gave the license for its manufacture to an affiliated party called Freedom Motors. On May 15, Paul Moller, MLER‘s President, said that Freedom Motors has received letters of intent for the orders of more than 3.5 million Rotapower units. This, of course, means that some revenues should be coming MLER‘s way in the observable future. Naturally enough, investors are excited.
The thing is, this is not the first positive thing Mr. Moller has said. According to this SEC complaint, for example, he told his shareholders that 10,000 flying cars would be sold before the end of 2002. This didn’t happened.
Of course, this broken promise doesn’t necessarily mean that Mr. Moller is about to disappoint investors once again, but some people might be a bit reluctant to trust the stock. And certain note holders can even walk away with some significant profits.
According to the latest 10-Q, there were quite a lot of notes convertible at discounts ranging from 53% to 60% at the end of last year. The terms are pretty favorable for the creditors and by the looks of things, some of them have already taken advantage. The Subsequent Events section of the report tells us that between December 31 and February 23, MLER was forced to convert $42 thousand worth of debt into 4.2 million shares. We’ll leave it up to you to decide what you should make of this.
