UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-KSB

                  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
              ---             SECURITIES EXCHANGE ACT OF 1934

                    For the fiscal year ended: JUNE 30, 2004

                  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
              ---            SECURITIES EXCHANGE ACT OF 1934

                   For the transition period from _________ to __________

                   Commission File No.:  0-33173
                                        ---------

                           Moller International, Inc.
                 ----------------------------------------------
                 (Name of small business issuer in its charter)


                California                               68-0006075
       -------------------------------               -------------------
       (State or other jurisdiction of                (I.R.S. Employer
       incorporation or  organization)               Identification No.)


                            1222 RESEARCH PARK DRIVE
                             DAVIS, CALIFORNIA 95616
                    ----------------------------------------
                    (Address of principal executive offices)

                    Issuer's telephone number: (530) 756-5086
                    Issuer's Facsimile number: (530) 756-5179


Securities registered under Section 12(b) of the Exchange Act:

           None



Securities registered under Section 12(g) of the Exchange Act:

          COMMON STOCK, NO PAR VALUE

                                      -i-
<PAGE>


Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
[ X ] Yes   [  ] No


Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ X ]

Revenues for this fiscal year are $456,609.

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. (See definition of affiliate in Rule
12b-2 of the Exchange Act.)

     As of 30 June 2004, the Company had 44,020,269 common shares issued and
outstanding, with a total of 15,859,248 owned by non-affiliates. As of 30 June
2004, the closing price of such common equity was $1.32 per share, giving an
aggregate market value of the voting and non-voting common equity held by
non-affiliates as $20,934,207.36.

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.

     As of 30 June 2004, the company had 44,020,269 common shares issued and
outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference, briefly describe them
and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which the document is incorporated: (1) any annual report to security holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"). The listed
documents should be clearly described for identification purposes (e.g., annual
report to security holders for fiscal year ended December 24, 1990).

Transitional Small Business Disclosure Format (Check one): Yes [ ]; No [X]



                                      -ii-
<PAGE>

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS


                                   OUR COMPANY

Moller International, Inc. was incorporated April 19, 1983 in the state of
California for the purpose of designing, developing, manufacturing and marketing
a line of Vertical Take-off and Landing ("VTOL") aircraft. Our flagship model is
currently under development and testing and is projected to be a 4-passenger
aircraft that will combine the cruise performance of an airplane with the
vertical-flight capabilities of a helicopter. It is designated the "M400
Skycar(tm)." A related product we are developing is the Aerobot(R) line of
unmanned aerial vehicles. While certain engineering problems remain to be solved
before we can deliver a production aircraft meeting our design performance
specifications, we were able to test-fly a production prototype in 2002.

The research and development of our proposed products has been financed from
various sources, including sales of our stock to investors, capital
contributions and loans from our founder, Dr. Paul S. Moller, and various
government and private contracts. We will need to raise substantial additional
capital in order to complete the development of our products and to market them.

Since our inception, we have not been subject to a receivership, bankruptcy or
similar proceeding, nor have we been involved in any material reclassification,
merger, acquisition, or purchase or sale of a significant amount of our assets.

Effective March 31, 2001, Moller International distributed its 95% ownership of
the shares of its (former) subsidiary, Freedom Motors, Inc. to the shareholders
of Moller International in a tax-free reorganization.

ITEM 2. DESCRIPTION OF PROPERTY

We currently lease and occupy a 34,500 square foot building located in Davis,
California, which is owned by Dr. Paul S. Moller, the majority shareholder of
Moller International. (see Note I to the financial statements)

ITEM 3. LEGAL PROCEEDINGS

In August 2001, the Ft. Worth, Texas office of the Securities and Exchange
Commission ("SEC") initiated an investigation into certain prior activities of
Moller International Inc. and Dr. Paul Moller individually. Rather than face the
prospect of a lengthy SEC lawsuit, Dr. Moller and the Company each made a
determination to settle the matter by engaging in early resolution discussions
with the SEC staff. In April 2002, Moller International, Inc. and Dr. Moller
each signed a stipulated agreement with the SEC, consenting to an injunction
against any future violations of the federal securities laws and agreeing to pay
a $50,000 fine. Subsequently, the SEC revised the agreement and dropped the
proposed fine as to Moller International. Neither Moller International nor Dr.
Moller has admitted or denied any violations of federal securities laws. The
Final Judgment evidencing the settlement agreement was filed in the U.S.
District Court for the Eastern District of California on February 12, 2003.



                                      -1-
<PAGE>

Moller International, Inc. is named as a defendant in a lawsuit pending in Yolo
County, California Superior Court captioned Houlihan v. Moller International,
Inc., et al. The Complaint, filed in January of 2004 in Sacramento County
Superior Court and later transferred to Yolo County Superior Court, alleges that
the Company violated certain federal and state securities laws at the time the
plaintiff purchased his shares of common stock in the Company, and later when
the Company offered to repurchase those shares. The plaintiff alleges damages of
$490,000 plus interest. The Company's Answer was filed in September 2004, and
initial discovery commenced in early October 2004.

The Company intends to contest the case vigorously and while it is too early to
assess the likelihood of a favorable outcome or the amount or range of potential
loss, the Company and its counsel currently believe that there exist multiple
viable defenses to the causes of action in the Complaint.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.



                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Moller International common stock is being publicly traded on the OTC
(over-the-counter) stock market. According to Yahoo Financial data, the average
adjusted closing price has ranged from a low of $1.30 to a high of $1.45 per
share during this reporting period and The Motley Fool (www.fool.com) shows the
52-week average trading volume of 8,800 shares per trading day (as of 22
September 2004).

The following table is a summary of Moller International stock performance by
calendar quarter since being listed by the OTC market in August 2002.

                                                High         Low
2002-Q3 (28 Aug to 30 Sep 2002)              $    7.50   $    4.15
2002-Q4 (1 Oct 2002 to Dec 31, 2002)         $    6.50   $    2.00
2003-Q1 (2 Jan 2003 to 31 March 2003)        $    2.20   $    0.70
2003-Q2 (1 Apr 2003 to 27 Jun 2003)          $    1.00   $    0.34
2003-Q3 (1 Jul 2003 to 30 Sep 2003)          $    0.90   $    0.50
2003-Q4 (1 Oct 2003 to 30 Dec 2003)          $    2.30   $    0.65
2004-Q1 (2 Jan 2004 to 31 Mar 2004)          $    1.50   $    0.95
2004-Q2 (1 Apr 2004 to 30 Jun 2004)          $    1.45   $    1.30
2004-Q3 (1 July 2004 to 30 Sep 2004)         $    2.12   $    0.95


Shareholders of Record

As of 18 October 2004 there are 604 shareholders of record for common shares of
Moller International.



                                      -2-
<PAGE>

Dividends

The holders of our common stock have equal ratable rights to dividends from
funds legally available for dividend payments when, as and if declared by the
Board of Directors of the Company.

To date we have not paid or declared any dividends and we have no intention of
declaring or paying any dividends in the foreseeable future.

If we decide to pay dividends, that decision will be made by our Board of
Directors, which will likely consider, among other things, our earnings, our
capital requirements and our financial condition, as well as other relevant
factors. Our Board of Directors may declare and pay dividends to the Company's
shareholders in the form of bonus shares. The shareholders would receive bonus
shares in lieu of cash dividends, if any, declared and paid by the Company.


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Year Ended June 30, 2004

Moller International continues its research and development activities on the
Skycar project with the objective of improving flight duration and range of the
aircraft. These efforts are an extension of successful flights throughout the
previous year and extensive ongoing engine tests, which we believe, will result
in incremental improvements to the existing prototype, future prototypes and/or
production aircraft, should we continue to operate. In addition, the Company
continued its efforts to help Freedom Motors promote the Rotapower engine and
assisted in discussions that resulted in Freedom Motor receiving two contracts
for engine sales and development. Staffing levels dropped in the second half of
the year as available funding fell and costs for general and administrative
functions decreased accordingly.

Year 2004 compared to 2003

Results of operations for the 2004 fiscal year did not vary significantly from
2003. The Company incurred net losses, on a consolidated basis, of $2,007,144
and $1,822,655 in fiscal 2003 and 2004 respectively.

Consolidated loss per share was $.05 and $.04 for the 2003 and 2004 fiscal
years, respectively. The Company generated no significant amount of revenue in
either fiscal year. The Company is currently using cash to fund operations at an
approximate rate of $85,000 per month, net of engineering revenue received, with
the significant non-cash charges being depreciation and amortization of
approximately $45,000 per year, the deferral of certain executive salaries at an
annual rate of $160,000 per year and the deferral of building rent approximately
$200,000 per year.

Salaries and wages, including benefits, remained relatively constant,
representing 45% and 53% of total expenses for the 2003 and 2004 fiscal years,
respectively. As cash on hand dropped, most employees voluntarily consented to
defer pay, resulting in a total of $ 188,044 of accumulated short-term deferred
payroll as of 30 June 2004. Interest expense increased by $144,240 during the


                                      -3-
<PAGE>

2004 year primarily as a result of the accrual of interest on the company's
loans from Milk Farm Associates (Milk Farm), a related entity by virtue of the
fact that Dr. Moller is the general partner in Milk Farm and has a 37.7%
ownership interest. The loan from Milk Farm is unsecured. It is due on demand
and carries a 15% annual interest rate. At the fiscal year-end 2004, the
outstanding principal amount was $516,142. There has been no accrual of interest
on the loan with Pelican Ventures. See Note F to the Financial Statements.

Contract revenues increased by $292,168 in 2004 over 2003, primarily due to
contract revenue received from Freedom Motors. The UC Davis contract was
extended to the end of 2003, and the bulk of the billable contract revenue from
the cost-shared program was reflected in the prior Fiscal Year. Miscellaneous
revenues decreased by $3,342. These decreases are not indicative of any
meaningful revenue trends. Total operating expenses decreased by $328,729.



                                      -4-
<PAGE>

ITEM 7. FINANCIAL STATEMENTS


INDEPENDENT AUDITORS' REPORT




To the Stockholders
Moller International, Inc.
Davis, California

We have audited the accompanying consolidated balance sheet of Moller
International, Inc. and subsidiaries (the Company) as of June 30, 2004 and the
related consolidated statements of operations, deficit in stockholders' equity
and cash flows for each of the years in the two-year period ended June 30, 2004.
These financial statements are the responsibility of Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Moller
International, Inc., and subsidiaries as of June 30, 2004, and the consolidated
results of their operations and cash flows for each of the years in the two-year
period ended June 30, 2004, in conformity with accounting principles generally
accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note B to the
financial statements, the Company has not generated any significant revenue from
operations and is in need of additional infusions of operating capital in order
to complete the development of its Skycar product and other product offerings.
This factor raises substantial doubt about the Company's ability to continue as
a going concern. Management's plans in regard to this matter are also described
in Note B. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.



San Jose, California
October 10, 2004




                                      -5-
<PAGE>

                          MOLLER INTERNATIONAL, INC.
                          CONSOLIDATED BALANCE SHEET
                                 JUNE 30, 2004



ASSETS
CURRENT ASSETS
Cash                                                                $ 1,715
Accounts receivable                                                  51,339
                                                               -------------
Total current assets                                                 53,054

PROPERTY AND EQUIPMENT, net of accumulated depreciation              52,258


                                                               -------------
TOTAL ASSETS                                                      $ 105,312
                                                               =============

LIABILITIES AND DEFICIT IN STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable                                                   $ 88,831
Accrued expenses                                                  1,055,011
Notes payable - majority shareholder                              1,312,899
Notes payable - minority shareholders                               106,096
Note payable - related party                                        516,142
Other notes payable                                                 526,235
Customer deposits                                                   422,500
                                                               -------------
Total current liabilities                                         4,027,714
LONG TERM LIABILITIES

Deferred wages                                                    1,369,706
                                                               -------------
Total long term liabilities                                       1,369,706
                                                               -------------
Total liabilities                                                 5,397,420

DEFICIT IN STOCKHOLDERS' EQUITY
Common stock, authorized, 150,000,000 shares, no par value,
       issued and outstanding, 44,020,269 shares                 25,392,447
      Accounts receivable from related party                     (1,210,248)
Accumulated deficit                                             (29,474,307)
                                                               -------------
Total deficit in stockholders' equity                            (5,292,108)
                                                               -------------
TOTAL LIABILITIES AND DEFICIT IN
STOCKHOLDERS' EQUITY                                              $ 105,312
                                                               =============


                 See accompanying notes to financial statements




                                      -6-
<PAGE>

                           MOLLER INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                              YEAR ENDING JUNE 30,


                                                       2004           2003
                                                  -------------  -------------
INCOME
Contract revenues                                 $          -   $    105,393
Freedom Motors Revenue                                 342,417              -
Madami revenues                                         96,749         41,605
Miscellaneous                                           17,443         20,785
                                                  -------------  -------------
Total income                                           456,609        167,783

EXPENSES
Project labor                                          263,013        422,841
Project materials                                       42,566        118,835
Project subcontracted services                          43,119        138,671
Administrative salaries and wages                      681,908        347,259
Other labor                                             18,129         35,329
Employee benefits and payroll taxes                    168,033        183,806
Marketing materials                                      2,308         16,469
Office and shop supplies                                23,393         29,587
Shipping and postage                                    11,493         20,231
Telephone                                                9,277         10,429
Travel, automotive, meals                               22,865         21,115
Legal, accounting, and consulting fees                  79,533         91,955
Patent expense                                          43,030         41,918
Rent expense to majority shareholder                   516,010        450,513
Utilities                                               46,363         43,085
Repairs and maintenance                                  5,085          3,876
Insurance                                               48,849         42,065
Depreciation and amortization expense                   43,148         62,565
Sales and use taxes                                     20,020          8,884
Bank and loan fees                                       1,637          2,401
Other expenses                                           8,055         45,903
                                                  -------------  -------------
Total expenses                                       2,097,834      2,137,737
                                                  -------------  -------------

Loss from operations                                (1,641,225)    (1,969,954)

OTHER EXPENSE
       Interest                                       (181,430)       (37,190)
                                                  ----------------------------
                Total other expenses                  (181,430)       (37,190)
                                                  ----------------------------
NET LOSS                                          $ (1,822,655)  $ (2,007,144)
                                                  =============  =============

Loss per common share, basic and diluted                ($0.04)        ($0.05)
                                                  =============  =============

Weighted average common shares outstanding          43,769,436     43,537,012
                                                  =============  =============


                 See accompanying notes to financial statements



                                      -7-
<PAGE>

                           MOLLER INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                               YEAR ENDED JUNE 30,

                                                          2004          2003
                                                     ------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                             $ (1,822,655) $ (2,007,144)
Adjustments to reconcile net loss to net cash
used in operating activities
Depreciation and amortization                              43,148        62,565
Stock issued for services                                 378,400           478
Deferred wages                                            167,497       166,463
Decrease in accounts receivable
and other assets                                           24,608           548
Increase (decrease) in
Accounts payable                                         (149,608)       58,734
Customer deposits                                        (260,695)      270,661
Accrued expenses                                          642,162       321,586
                                                     ------------- -------------
Net cash used in operating activities                    (977,143)   (1,126,109)

CASH FLOWS FROM FINANCING ACTIVITIES
                                                                              -
      Procceeds from notes payable - related party        516,142             -
Increase (decrease) in notes payable - others            (112,221)      186,471
      Net increase in notes payable from officer          575,141       419,421
      Reduction in notes payable and capital leases        (2,488)       (2,743)
Proceeds from sale of common stock                              -       316,459
                                                     ------------- -------------
Net cash provided by financing activities                 976,574       919,608
                                                     ------------- -------------

CASH FLOWS FROM INVESTING ACTIVITIES
      Customer deposits                                         -         5,000
(Purchase) disposal of equipment                              602        (3,219)
                                                     ------------- -------------
Net cash used in  investing activities                        602         1,781
                                                     ------------- -------------

NET INCREASE (DECREASE) IN CASH                                33      (204,720)

CASH, BEGINNING OF PERIOD                                   1,682       206,402
                                                     ------------- -------------

CASH, END OF PERIOD                                       $ 1,715       $ 1,682
                                                     ============= =============

Cash paid during the period for:
   Interest                                              $ 15,105      $ 86,625
                                                     ============= =============
   Income taxes                                           $ 2,400       $ 2,400
                                                     ============= =============


                 See accompanying notes to financial statements



                                      -8-
<PAGE>

                           MOLLER INTERNATIONAL, INC.
            CONSOLIDATED STATEMENT OF DEFICIT IN STOCKHOLDERS' EQUITY
                          TWO YEARS ENDED JUNE 30, 2004


<TABLE>
<CAPTION>
                                                          Common Stock              Accumulated      Related Party
                                                     Shares          Amount           Deficit          Receivable         Total
                                                 ---------------------------------------------------------------------------------

<S>                                                  <C>              <C>             <C>              <C>             <C>
Balances at July 1, 2002                             43,377,424       23,965,764      (25,641,394)     (1,203,428)     (2,879,058)

Sales of common stock                                     5,333           40,000                -               -          40,000
Exercise of options by conversion of debt               146,448          276,460                -               -         276,460
Conversion of debt into common stock                     61,000          143,200                -               -         143,200
Shares received for services                                 64              478                -               -             478
Proceeds from previously issued shares                        -          588,145                -               -         588,145
Decrease in receivable from related party                     -                -                -         270,761               -
Net loss for the year                                         -                -       (2,007,144)              -      (2,007,144)
                                                 ---------------------------------------------------------------------------------

Balances at June 30, 2003                            43,590,269       25,014,047      (27,648,538)       (932,667)     (3,567,158)

Prior Period Adjustment                                       -                -           (3,114)       (277,581)       (280,695)
                                                 ---------------------------------------------------------------------------------

Balances at June 30, 2003, as restated               43,590,269       25,014,047      (27,651,652)     (1,210,248)     (3,847,853)

Commons Stock issued                                    430,000          378,400                -               -         378,400
Net loss for the year                                         -                -       (1,822,655)              -      (1,822,655)
                                                 ---------------------------------------------------------------------------------

Balances at June 30, 2004                            44,020,269     $ 25,392,447     $(29,474,307)    $(1,210,248)    $(5,292,108)
                                                 =================================================================================
</TABLE>


                 See accompanying notes to financial statements




                                      -9-
<PAGE>

NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Moller International Inc., (the Company), (MI) consolidates the accounts of its
wholly owned, inactive subsidiary, Aerobotics Inc., (AI).

MI is the successor to Moller Corporation (MC), an inactive entity. MC's only
significant asset is its investment in MI as it holds 25,919,909 shares of MI,
representing 58.9% of the outstanding common stock of the Company. Dr. Paul S.
Moller is the sole shareholder of MC, and thus, the majority shareholder of MI.
All significant intercompany transactions and balances have been eliminated.

The Company has historically entered into several lines of revenue-producing
business activities including the design and development of rotary engines,
remotely controlled flying vehicles, automotive mufflers and vertical takeoff
and landing aircraft. The Company has for the past fourteen years devoted most
of its efforts to the design and development of a Vertical Takeoff and Landing
(VTOL) vehicle known as the Skycar. The Skycar program is still in the
development stage at this point.

Research and Development Costs

All research and development costs are expensed as incurred.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments with an initial
maturity date of 90 days or less to be cash equivalents.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenditures/expenses during the reporting
periods. Actual results could differ from those estimates.

Loss Per Share (LPS)

Basic LPS excludes dilution and is computed by dividing the loss attributable to
common stockholders by the weighted average number of common shares outstanding
for the period. Diluted LPS reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted
into common stock or resulted in the issuance of common stock that shared in the
earnings of the entity. Diluted LPS is the same as basic LPS for all periods
presented because all potentially dilutive securities have an anti-dilutive
effect on LPS due to the net losses incurred. At June 30, 2004, the total number
of shares of common stock relating to outstanding stock options and other
potentially dilutive securities that have been excluded from the LPS calculation
because their effect would be anti-dilutive approximated 9,800,000 shares.



                                      -10-
<PAGE>

Income Taxes

Deferred income taxes are computed using the asset and liability approach, which
recognizes a liability or asset, representing the tax effects, based on current
tax law, of future deductible or taxable amounts attributable to events that
have been recognized in the consolidated financial statements. A valuation
allowance is established to reduce the deferred tax asset to a level at which it
is "more likely than not" that the benefit will be realized. Realization of such
benefits of deductible temporary differences and operating loss carryforwards is
dependent upon generating sufficient taxable income in future years and within
the carryforward periods.

Property and Equipment

Property and Equipment is recorded at cost and is depreciated over its estimated
service life on a straight-line basis. Estimated service lives range from five
to fifteen years.


Property and equipment consist of the following at
                                                    June 30:
                                          -------------------------
                                               2004        2003
                                          ------------ ------------

    Production and R&D Equipment            $ 393,158    $ 393,758
    Computer equipment and software           417,876      417,876
    Furniture and fixtures                     75,651       75,651
                                          ------------ ------------
                                              886,685      887,285
       Less accumulated depreciation        (834,427)    (791,278)
                                          ------------ ------------
                                            $  52,258      $96,007
                                          ============ ============


Long-lived Assets

When facts and circumstances indicate the carrying values of long-lived assets
may be impaired, an evaluation of recoverability is performed by comparing the
carrying value of the assets to projected discounted future cash flows as well
as other quantitative and qualitative analyses. Upon indication that the
carrying value of such assets may not be recoverable, the Company recognizes an
impairment loss by a charge to current operations.

Revenue Recognition

Miscellaneous income derived from the sale of t-shirts, model cars, information
packets and other items is recognized at the time of sale. Contract revenues are
primarily from outside parties who engage the Company to configure one of the
company's products for use in an application of their own. The term of such
contracts is typically a year to eighteen months. The revenue is recognized when
invoiced, according to the terms of each contract. Contract revenues also


                                      -11-
<PAGE>

include the leasing of a full-scale Skycar model for various exhibitions.
Revenue from the leasing of the Skycar model is recognized over the term of the
contract period. Both contract revenue sources are considered to be
insignificant and not critical to the goal of achieving profitable operations.

The company performs contract services for its former subsidiary, Freedom Motors
(FM). In accordance with the Technology Development and License Agreement
between Moller International and FM, dated October 28, 1999, the Company
provides FM the personnel and facilities as required to adapt its Rotapower
engine to applications where the potential exists for high volume production.
The Company also handles FM's bookkeeping and other administrative functions.
Prior to the spin-off of FM these charges were eliminated in consolidation
against the corresponding expenses incurred by FM. From the date of the
spin-off, April 1, 2001, forward, due to the uncertainty of FM's ability to pay
amounts owed, the Company does not recognize any revenue related to these
transactions with FM until it receives payment from FM. For the period from
April 1, 2001 to June 30, 2001, contract services billed to FM totaled $185,695.
For the years ended June 30, 2002, 2003 and 2004, contract services billed to FM
totaled $548,906, $432,670 and $585,720, respectively.

During the year ended June 30, 2004, FM received development fees from new
customers, intent on licensing FM's rotary engine technology. FM remitted a
total of $64,838 in payments to MI for such services. In addition, in prior
years, FM had remitted a total of $277,579 in payments to MI. Those amounts had
been previously classified as a reduction in the inter-company receivable
between the two companies. This receivable is reflected as a reduction in
stockholders' equity in MI's financial statements. For the year ended June 30,
2004, MI has recorded a prior period adjustment to reflect these payments as
customer deposits as of June 30, 2003. For the year ended June 30, 2004 the
customer deposit amounts have been credited to revenue as they are being treated
as payments by FM to MI for contract services previously rendered.

In summary, MI has billed FM $1,752,991 for contract services post spin-off. Of
that amount, a total of $342,417 has been recognized as revenue, leaving a
balance of $1,410,574. These amounts will be recognized as revenue when payment
is received from FM.


NOTE B - GOING CONCERN

The Company has recorded a net loss of $1,822,655 for the year ended June 30,
2004 and has a deficit equity of $5,292,108. The Company currently has no
revenue-producing products and is continuing its development of products in both
the Skycar and Rotary 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 the Company's ability to obtain additional financing sufficient
to complete product development activities and provide working capital to fund
the manufacture and sale of the Company's products. These factors raise
substantial doubt as to the Company's ability to continue as a going concern.



                                      -12-
<PAGE>

Management is currently pursuing additional sources of capital in quantities
sufficient to fund product development and manufacturing and sale activities.
The Company's affiliate, Freedom Motors, recently entered into contracts to
manufacture and supply rotary engines to certain customers. Concurrent with the
signing of these contracts, FM typically receives up front engineering and
license fees which is, in turn, paid to MI, (see above note). FM expects to
generate further funding from this activity which will be used to fund ongoing
activities at MI. However, there is no assurance that FM will continue to be
successful in securing additional fees from potential new customers.

Dr. Moller, the majority shareholder of the Company, is providing funds received
from the refinance of, both, real property owned by him personally and real
property owned by a limited partnership of which Dr. Moller is the general
partner, in the form of short-term, interest-bearing demand loans to the
Company. During the current year ended June 30, 2004, a total of $1,070,187 has
been loaned to the Company from these transactions. Of that amount, $575,141 in
borrowings came form properties owned personally by Dr. Moller. In addition, Dr.
Moller has deferred payment of current year building rent owed by MI of
approximately $200,000.

There can be no assurance that Dr. Moller will continue to have the ability to
continue to make such short-term loans to the Company in the future. In the
event that Dr. Moller cannot continue to make such loans, or that the Company
does not receive funds from other sources, the Company may be unable to continue
to operate as a going concern.

There is no assurance that the funds generated from these activities or other
sources will be sufficient to provide the Company 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.


NOTE C - CUSTOMER DEPOSITS

Customer deposits are payments made to the Company, generally at $5,000 per
unit, for the purpose of reserving specific delivery positions for Skycars when
they become available for sale to the public. Deposits are refundable at any
time upon request, with interest at 10% on the deposit amount from the date of
the request.


NOTE D - DEFERRED WAGES

The annual salary of the majority shareholder ($160,000) and the annual salary
of the Vice President of Administration ($30,000) are being deferred until the
Company has reached a consistent level of profitability. Both individuals have
indicated their willingness to defer such payments until profitable operations
commence. As such, the deferred wages are being reflected as a non-current
liability.




                                      -13-
<PAGE>

NOTE E - NOTE PAYABLE MAJORITY SHAREHOLDER

Notes payable to the majority shareholder, Dr. Paul S. Moller (Moller) are
unsecured, and due on demand. There are two separate notes, one for $1,042,099
which bears interest at $10% per annum, and another note for $270,800 that is
non-interest bearing. During the year ended June 30, 2004, Moller loaned the
Company an additional $575,141, representing an increase in the interest bearing
loan balance. Accrued interest on this loan aggregated $109,020 at June 30,
2004.

NOTE F - NOTES PAYABLE

Minority Shareholders

Notes payable to minority shareholders, at June 30, 2004 consisted of short-term
borrowings, all due on demand with an interest rate of 10% per annum. Certain of
the loans, including accrued interest, are convertible in common stock at $2.50
per share. The aggregate balance outstanding at June 30, 2004, was $106,096.

Related Party

During the year ended June 30, 2004, the Company borrowed $516,142 from Milk
Farm Associates (Milk Farm), a limited partnership, and a related entity. Dr.
Moller is the general partner in Milk Farm and has a 37.7% ownership interest.
The note is unsecured and bears interest at 15% per annum. Accrued interest on
this loan aggregated $44,677 at June 30, 2004.

Pelican Ventures

In January, 2001, the Company and its then majority owned subsidiary, FM,
entered into an agreement with Pelican Ventures LLC, (Pelican), wherein Pelican
agreed to provide funds to FM for the development of a diesel powered rotary
engine. The total funding was for $500,000. The funding is in the form of a
promissory note, with an interest rate of 9%. Interest payments are due monthly.
The note is collateralized by substantially all assets of the Company and FM.
The original due date of the loan was January 19, 2002. This due date was
extended by verbal agreement between the parties on a month-to-month basis.

Upon the successful completion of certain development and manufacturing
milestones, which includes the delivery of ten production quality engines within
6 months of the signing of the agreement, and the acceptance of the product by
Pelican, the loan balance was to be reduced by $200,000 and the maturity date on
the remaining loan balance would be extended by one year. FM delivered one
production engine for evaluation to Pelican within the milestone period, and
additional development work continued through June 2002. The 10 production
engines referred to above have not been delivered.

On June 24, 2002, Pelican notified the Company that it had cancelled the project
in which the company's engine was to be used and requested repayment of the
$500,000. The Company responded with a claim for reduction of the loan balance
because the engine appeared to meet the performance goals and Pelican had
approved continued work on the project. The Company and Pelican have not
resolved the matter and the Company is seeking resolution through arbitration or
litigation.



                                      -14-
<PAGE>

The Company ceased accruing interest payments to Pelican in August of 2002, and
has not accrued any interest payments due to Pelican from July 31, 2002,
forward.

The following is a summary of the notes outstanding by period ending:

                                                        June 30,
                                              ---------------------------
                                                  2004           2003
                                              ------------  -------------

   Minority Shareholders -
       convertible, 1 year term, 10%          $    40,750       $ 45,750
   Minority Shareholders - demand, 10%,            65,346        151,471
   Milk Farm Associates                           516,142              -
   Pelican Ventures                               500,000        500,000
   Other                                           26,235         47,331
                                              ------------  -------------
                                              $ 1,148,473       $744,552
                                              ============  =============


NOTE G- TECHNOLOGY AND LICENSE DEVELOPMENT AGREEMENT

On October 28,1999 FM and MI entered into a Technology Development and License
Agreement (the Agreement). FM issued 7,000,000 shares of its Common Stock to MI
in exchange for the right, title and interest to certain Tangible Assets and
Products, as defined in the Agreement, relating to the manufacture of certain
rotary engines. In addition, MI granted FM an exclusive license to use certain
rotary engine related intellectual property of MI, for all uses except for those
as defined in the Agreement. The Agreement also called for MI to perform
research and development services on behalf of FM relating to the product
development of MI's Model 530cc single rotor engine and for MI to be compensated
for such services at cost rates defined in the Agreement. FM granted MI a
royalty of 5% of net revenues received from the sale of products developed
pursuant to this Agreement. The initial term of this royalty arrangement shall
mean the period during which the products are covered by a valid, unexpired
patent. The royalty period will extend beyond this period for an additional five
years but the royalty percentage shall be reduced to 2% of net revenues
received.

NOTE H - COMMON STOCK TRANSACTIONS

During the year ended June 30, 2004, the Company issued 430,000 shares of common
stock to certain individuals in recognition of various contributions made by
these individuals to the Company. The Company received no consideration for the
shares. The Company recorded a charge to operations for the issuance of these
shares in the amount of $378,400, based on an estimated fair market value per
share of $.88. The fair value was determined by taking the latest bid price for
the stock at the date the shares were issued, and discounting that amount by a
35% factor.



                                      -15-
<PAGE>

During the year ended June 30, 2003, the company sold 5,333 shares of its common
stock to outside investors in private sales transactions, raising a total of
$40,000. The shares were sold at $7.50 per share. In addition the Company
converted short-term debt of $143,200 into 61,000 shares of common stock, issued
64 shares in exchange for commissions of $478 owed, and issued 146,448 shares
upon the exercise of outstanding stock options at exercise prices ranging from
$.81 to $3.82 per share, for a total of $276,460.


NOTE I - LEASE COMMITMENT

The Company's operations are housed in one 34,500 square foot building, which is
leased from majority shareholder Paul S. Moller. The initial operating lease
expired on November 13, 2002. The facility was being leased on a month-to-month
basis. The monthly base rental was $37,524, which included base rent of $27,165
plus a monthly interest payment of $10,359. The interest payment represented the
monthly debt service on a second mortgage on the building (See Note J). The
mortgage was the responsibility of Dr. Moller. The Company paid the interest as
a form of additional rent on the facility. The Company is also liable for
property taxes and insurance assessed against the leased property.

On July 1, 2003 the Company and Dr. Moller entered into a new lease on the
property. The term of the lease is for ten years ending June 30, 2013. The new
rent is $41,400 per month with a provision for an adjustment in the monthly rent
after 5 years. The Company remains liable for all property taxes and insurance
on the leased property. The minimum rental commitment remaining on the leased
property is $496,800 for each of the ten years remaining on the lease.

Rent expense charged to operations under this lease, including property taxes,
aggregated $516,010 and $450,513 for the years ended June 30, 2004 and 2003,
respectively.


NOTE J - RE-FINANCE OF SHAREHOLDER LEASED PROPERTY

In August 2000, Dr. Moller borrowed $975,000 from a financial institution to
refinance the debt on the facility that is leased to the Company. Excess
proceeds from that re-finance were loaned to the Company. The Company received
$71,933 in funds from this transaction and the amount was reflected as an
additional loan payable to Moller. The $975,000 loan was a personal obligation
of Moller. It carried an interest rate of 12.75% and was payable interest only
monthly from September 1, 2000 through August 1, 2003. The monthly interest
payment was $10,359. The note was due in full on August 1, 2003 and was
collateralized by deeds of trust and an assignment of rents on the property
leased to the Company by Moller.



                                      -16-
<PAGE>

On September 12, 2003, Moller completed a second re-financing of the building.
The new debt is $3,294,000 at an interest rate of 6.25%. The refinancing paid
off existing debt totaling $2,670,000, including the aforementioned $975,000,
plus accrued interest, unpaid property taxes, and other fees and costs
aggregating $192,000. Net proceeds from the refinance totaled $432,000 of which
$275,000 was loaned to the Company by Moller. The debt service requirements on
the refinanced debt aggregate $21,889 per month with a final payment of
$2,560,271 due in August 2013. This contrasts with the combined old monthly debt
service payments of $25,718.


NOTE K - FREEDOM MOTORS SPIN-OFF

In March 2001, the Company spun off its subsidiary Freedom Motors. Freedom
Motors was formed in 1997 with the purpose of putting the Company's Rotapower
engine into volume production for non-aircraft applications. Since the Company's
activities are limited to research and development, and since its main focus is
on aircraft, management's view was that the long-term interest of both companies
would best be served by separating them.

Accordingly, on March 30, 2001, the Company's Board of Directors approved an
Agreement and Plan of Reorganization (Agreement) with Freedom Motors, Inc. (FM)
and Vertol, Inc. (VI). According to the terms of the Agreement, the Company
transferred all of its assets and liabilities (except its MI and VI stock) to VI
in exchange for 100% of the VI common stock. Thereafter, the Company's
shareholders exchanged (subject to statutory dissenters' rights) all of the
outstanding shares of the Company for an identical number of shares of VI common
stock and a proportionate number of shares of FM common stock via a distribution
from the Company. Subsequently, VI was merged with the Company. The effect of
the reorganization is that the FM shares owned by the Company are now instead
owned by the Company's shareholders. The reorganization is intended to qualify
as a tax-free exchange reorganization pursuant to sections 311, 355 and 368 of
the Internal Revenue Code. On April 14, 2001, the Agreement was ratified at a
special meeting of the shareholders of the Company, duly noticed and accompanied
by a proxy statement. The Company ceased consolidating the results of operations
of FM effective March 31, 2001. Net assets transferred to the new FM
shareholders aggregated $111,718 and this amount has been reflected as a
shareholder distribution in the accompanying consolidated statement of deficit
in stockholders' equity. The intercompany receivable balance at the date of the
spin-off of $1,210,248, which includes $500,000 for the Pelican Ventures loan
(See Note F), was reflected as a reduction of stockholders' equity in the
accompanying consolidated balance sheets.

On April 16, 2003, Freedom Motors (FM) and Madami International of Russellville,
AR (Madami) entered into a contract to provide Rotapower engines for Madami
International's new All Terrain Vehicle. In support of this effort, Freedom
Motors contracted with the Company to provide engineering services to assist
with the transfer of documentation and manufacturing process details to Madami.
The Company recognized $250,000 in revenue from this contract during the year
ended June 30, 2004. The agreement between FM and Madami calls for FM to provide
rotors for any engines required by Madami. The Company will receive a 5% royalty
on all Freedom Motors sales of products to Madami. No rotors have been delivered
to Madami as of June 30, 2004, thus no royalty revenue has been accrued to date.




                                      -17-
<PAGE>

NOTE L- STOCK OPTION PLANS

Effective 21 January 2004, Moller International, Inc. submitted a Form S-8
Registration Statement describing its 2004 Stock, Option and Restricted Stock
Benefit Plan. The statement requested immediate registration of 7,500,000 shares
of Moller International, Inc common stock (no par value) at the proposed maximum
offering price of $1.55 per share for a proposed maximum aggregate offering
price of $11,625,000. This figure represents the maximum number of shares that
may be issued under the above-named Benefit Plan, including shares issued
pursuant to the exercise of options issued under the Plan. This Registration
Statement also covers any additional shares of Common Stock which become
issuable pursuant to this Registration Statement by reason of any stock
dividend, stock split, recapitalization or any other similar transaction
effected without the receipt of consideration which results in an increase in
the number of the Registrant's outstanding shares of Common Stock. The total
shares available for grant under the plan aggregate 7,500,000 of which 430,000
are outstanding at June 30, 2004.

Previously, the Company had in effect a 1991 Stock Option Plan that allowed for
the granting of Nonqualified Stock Options (NSO's) to employees and consultants
and Incentive Stock Options (ISO's) to employees. The total shares available for
grant under the plan were 7,500,000 of which 1,066,552 are reserved for future
issuance for stock options granted as of June 30, 2004. The 7,500,000 available
share amount excludes 6,000,000 in options granted to the Company's founder and
CEO, Dr. Paul Moller, which options were granted independently of the plan, and
also excludes 2,463,829 in options granted to certain non-employees.

The term of granted options shall be a maximum of ten years. Options granted
under the Plan generally vest at the rate of 25% per year beginning on December
31st of the option grant year. The option prices for NSO's and ISO's issued to
employees who own less than 10% of the outstanding common stock of the Company
shall be 85% and 100% of fair market value, respectively. In the case of
shareholders who own more than 10% of the Company's common stock, those
percentages are adjusted to 100% and 110% of fair market value. Fair market
value is determined by the Board of Directors of the Company.



                                      -18-
<PAGE>

Option activity for the years ended June 30, 2004, 2003,and 2002, is as follows:

<TABLE>
<CAPTION>
                                                                                            Weighted
                                                         Range of                           Average
                                   Total granted       Option Prices      Total vested   Exercise Price
                                   -------------       -------------      ------------   --------------

    Balance at June 30, 2001           9,904,052                                             $1.71
     Vested at June 30, 2001                                                 9,273,736       $1.54
                                                                          =============
                     Granted              50,000          $5.50                              $5.50
                   Exercised                   -
                   Forfeited                   -
                                     ------------

 Balance at June 30, 2002              9,954,052                                             $1.73
 Vested at June 30, 2002                                                     9,366,970       $1.57
                                                                          =============
                   Granted                     -
                   Exercised            (146,448)     $.81 to $3.82                          $1.89
                   Forfeited            (139,581)     $1.21 to$1.34                          $1.27
                                     ------------


 Balance at June 30, 2003              9,668,023                                             $1.74
 Vested at June 30, 2003                                                     9,144,555       $1.59
                                                                          =============
                   Granted                     -
                   Exercised                   -
                   Forfeited            (137,642)     $1.34 to $4.58                         $3.64
                                     ------------

 Balance at June 30, 2004              9,530,381                                             $1.71
                                     ============
 Vested at June 30, 2004                                                     9,182,324       $1.61
                                                                          =============
<S>     <C>
</TABLE>




                                      -19-
<PAGE>

Additional option information for the year ended June 30, 2004, is as follows:

<TABLE>
<CAPTION>
                                                                    Weighted
                                                                    Average
                                                   Weighted        Remaining                             Weighted
                                                   Average          Life in                              Average
        Price Range            Outstanding          Price            Years         Exercisable           Price
----------------------------------------------------------------------------------------------------------------------

       $.81 to $1.34         6,107,955              $1.14            4.17          6,107,955              $1.14
      $1.72 to $2.67         2,459,008              $2.15            0.33          2,459,008              $2.15
      $3.24 to $5.50           963,418              $4.16            6.50            615,361              $4.04
                          --------------                                        -------------

                             9,530,381              $1.71                          9,182,324              $1.61
                          ================================                      ================================
<S>     <C>
</TABLE>




The Company applies Accounting Principles Board Opinion 25, Accounting for Stock
Issued to Employees, and related Interpretations in determining compensation
cost for options issued to employees. Accordingly, no compensation cost has been
recognized upon issuance of the option. The Company has adopted the disclosure
only provisions FASB Statement No. 123, Accounting for Stock-based Compensation.
Had compensation cost for the Company's stock option plan been determined based
on the fair value at the grant dates for awards under this plan consistent with
the method of Statement No. 123, the Company's net loss and net loss per common
share would have been reduced to the pro forma amounts indicated below for the
years ended June 30:

<TABLE>
<CAPTION>
                                           2004             2003            2002
                                    ------------------------------------------------

<S>                                      <C>              <C>               <C>
 Additional Compensation cost            32,322           32,323            $32,323
 Net loss as reported                 1,822,655        2,007,144          2,159,940
                                    ------------------------------------------------

 Pro forma net loss                   1,854,977        2,039,467         $2,192,263
                                    ================================================

 Pro forma loss per share                 $0.04            $0.05              $0.05
                                    ================================================
</TABLE>



The pro forma compensation cost was recognized for the fair value of the stock
options granted, which was estimated using the minimum-value method, including a
risk-free interest rate of 3%, an estimated life of the options of ten years and
no dividend rate or volatility on the stock. The weighted average fair value of
stock options granted was $.47, in 2002, respectively. No options were granted
for the years ended June 30, 2003 or 2004.



                                      -20-
<PAGE>

NOTE M - INCOME TAXES

The Company currently has approximately $25,500,000 in net operating loss (NOLs)
carryforwards to offset future federal taxable income. In view of the
uncertainty over the Company's ability to generate sufficient taxable income in
future years to utilize the NOLs, a full valuation allowance of approximately
$7.9 million has been recorded to offset the deferred tax asset, resulting in no
net deferred tax asset or liability. The valuation allowance increased by
approximately $400,000 for the year ended June 30, 2004. Current IRS regulations
limit the ability of a Company to offset net operating loss carryforwards
against future federal taxable income when a change in control of the Company,
as defined by IRS regulations, has occurred. The Company has not performed any
analysis to determine if such a change in control has occurred. Income tax
expense for the years presented consists solely of the minimum State franchise
tax and is included in other expense in the accompanying statements of
operations.


NOTE N - SEC SETTLEMENT

In August 2001, the Ft. Worth, Texas office of the Securities and Exchange
Commission ("SEC") initiated an investigation into certain prior activities of
Moller International Inc. and Dr. Paul Moller individually. Rather than face the
prospect of a lengthy SEC lawsuit, Dr. Moller and the Company each made a
determination to settle the matter by engaging in early resolution discussions
with the SEC staff. As a result, Moller International, Inc. and Dr. Moller have
each stipulated to an injunction against future violation of the federal
securities laws and have agreed to pay a $50,000 fine. Moller International,
Inc. and Dr. Moller have neither admitted nor denied any violations of federal
securities laws. The Company's $50,000 fine was accrued as of June 30, 2002, but
was reversed during the year ended June 30, 2003.


NOTE O - LEGAL PROCEEDINGS

Moller International, Inc. is named as a defendant in a lawsuit pending in Yolo
County, California Superior Court captioned Houlihan v. Moller International,
Inc., et al. The Complaint, filed in January of 2004 in Sacramento County
Superior Court and later transferred to Yolo County Superior Court, alleges that
the Company violated certain federal and state securities laws at the time the
plaintiff purchased his shares of common stock in the Company, and later when
the Company offered to repurchase those shares. The plaintiff alleges damages of
$490,000 plus interest. The Company's Answer was filed in September 2004, and
initial discovery commenced in early October 2004.

The Company intends to contest the case vigorously and while it is too early to
assess the likelihood of a favorable outcome or the amount or range of potential
loss, the Company and its counsel currently believe that there exist multiple
viable defenses to the causes of action in the Complaint.




                                      -21-
<PAGE>

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

Not applicable.


ITEM 8A. CONTROLS AND PROCEDURES

Our President, who also serves as Acting Chief Financial Officer (the
"Certifying Officer"), is responsible for establishing and maintaining
disclosure controls and procedures for the Company. 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
the Company's disclosure controls and procedures as of the date of this report
and believes that the disclosure controls and procedures are effective based on
the required evaluation.

There have been no significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent to the date of
their evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.


                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(A) OF THE EXCHANGE ACT

In October 2003, Mr. Robert Davis chose not to run for a second term as a
Director, stating that he had insufficient time in his schedule to devote to the
required duties.

Effective 5 February 2004, Moller International accepted the voluntary
resignation of Mr. Elliot Axelband. Mr. Axelband resigned stating that he was
uncomfortable with the level of Director & Officers Liability Insurance that the
Company felt it could afford at this time.

The following information is provided for current members of the Board of
Directors who served during this reporting period:


<TABLE>
<CAPTION>
         Director          Age         Current Term of Office        Director/Officer in any
                                                                   other SEC-reporting Company
----------------------- ----------- ------------------------------ -----------------------------
<S>                         <C>           <C>                                  <C>
Paul Moller                 67            10/2004 - 10/2005                     No
Umesh Khimji                41            10/2004 - 10/2005                     No
A. Gordon Vette             71            10/2004 - 10/2005                     No
Faulkner White              53            10/2004 - 10/2005                     No
Monty Lee                   59            10/2004 - 10/2005                     No
</TABLE>




                                      -22-
<PAGE>

Resumes of Board of Directors

Paul Moller, Chairman of the Board--Dr. Moller founded the Company and has
served as the company's President since its formation. He holds a Masters in
Engineering and Ph.D. from McGill University. Dr. Moller was a professor of
Mechanical and Aeronautical Engineering at the University of California, Davis,
from 1963 to 1975, where he developed the Aeronautical Engineering program. In
1972 he founded SuperTrapp Industries and was Chief Executive Officer as
SuperTrapp became the most recognized international name in high-performance
engine silencing systems. SuperTrapp Industries was sold in 1988. In 1983 he
founded Moller International to develop powered lift aircraft. Under his
direction Moller International completed contracts with NASA, NOSC, DARPA, NRL,
Harry Diamond Labs, Hughes Aircraft Company, California Department of
Transportation and the U.S. Army, Navy, and Air force. These contracts included
the development and deployment of numerous unmanned aerial vehicles and Wankel
based engines. Dr. Moller has received 43 patents including the first U.S.
patent on a fundamentally new form of powered lift aircraft. In 1980 he
developed the Davis Research Park, a 38-acre industrial-research complex within
the city of Davis, CA in which Moller International is located.

A. Gordon Vette, Far East Liaison, Director --Mr. Vette has served as a Moller
director since 1987. He was a pilot and Flight Instructor for Air New Zealand
from 1958 to 1981. From 1982 until the present he has been a founder and
director of Aviation Consultants, Inc. During the same period he was an Airline
Inspector and Flight Testing Officer with the Ministry of Transport, New Zealand
as well as Chief Flying Instructor with Taupo Air Services. Mr. Vette received
his MBA (Distinction) from Massey University in 1993 and concurrently completed
a MA in Psychology from the University of Auckland where he specialized in Human
Factors. He has just completed his DSc. from Massey University specializing in
Human Factors in relation to Virtual Reality and Intelligence Augmentation and
its application to flight and flight simulators.

Faulkner White, Director--Mr. White received his B.A. in Psychology
(Distinction) with a minor in Computer Science from Dartmouth College in 1972.
He has consulted for Apple Computer, Motorola and McDonnell Douglas. In 1995 Mr.
White collaborated in the development of a new type of breast biopsy gun for
Biopsys Medical Inc., developing software to track the efficacy of the new
design for the FDA, and subsequently for the customers themselves. He is
currently developing Customer Relationship Management software for the laser eye
surgery and cosmetic surgery markets. Mr. White is also a certified DBA in
Oracle database technology.

Umesh Khimji, Director--Mr. Khimji is the Chief Executive Officer of the Ajit
Khimji Group of Companies, LLC, Muscat in the Sultanate of Oman. He is a member
of the Board of Directors for a total of seven companies in the Sultanate of
Oman, three companies in France, two in India, one in the United Kingdom and two
here in the United States. He has been instrumental in the start up and
direction of private and public companies since 1986. Mr. Khimji's experience
includes management, public and private finance, investment planning,
development and operations. His firms are actively involved in a variety of
market segments including travel & tourism, hotels, resorts; commercial and
industrial banking, advertising, construction, contract services, computer
software and other types of research and development activities. Mr. Khimji
holds a Bachelor of Business Administration from University of San Diego, and is
fluent in English, French and several Indian languages. He is experienced in
working with people with diverse cultural backgrounds. He was selected as a
candidate MI Director when his father, Ajit Khimji, resigned from his position
on the Board earlier this year.



                                      -23-
<PAGE>

E. Monty Lee, CFA, Director--Mr. Lee is a private investor trading listed
equities and commodities for family accounts. Previously, he was an executive
officer, portfolio manager and Corporate Secretary for a private investment
management firm with clients drawn from major domestic corporations,
foundations, and high net-worth individuals. His experience includes senior
investment management responsibilities with a large public pension fund and
several Fortune 500 industrial companies. Additionally, he has held
controllership, treasury and auditing positions. Mr. Lee received his B.S.
degree from Golden Gate University and attended the University of California,
Berkeley MBA program. He is a licensed private pilot.

Adoption of Code of Ethics

On 18 October 2004, Moller International formally adopted a Code of Ethics
governing the action of all Officers, Directors, and Employees of the Company.
(A copy is attached as Exhibit 16)

ITEM 10. EXECUTIVE COMPENSATION

The following table sets forth a summary of compensation received by each of our
officers and directors who received compensation from the Company during the
past fiscal year.

<TABLE>
<CAPTION>
----------------- ------- -------------------------------------- ---------------------------------------------------------
    Name and
   principal
    position       Year            Annual Compensation                            Long-term Compensation
----------------- ------- -------------------------------------- ---------------------------------------------------------
                             Salary      Bonus    Other Annual              Awards               Payouts     All other
                                                  Compensation                                              compensation

                              ($)         ($)         ($)                                                       ($)
----------------- ------- ------------- -------- --------------- -------------- --------------- ---------- ---------------
                                                                  Restricted      Securities    LTIP
                                                                     Stock        underlying     payouts
                                                                   Award(s)      options/SARs
                                                                      ($)            (#)           ($)
----------------- ------- ------------- -------- --------------- -------------- --------------- ---------- ---------------
                   2004   $160,000(1)     $0           $0             $0              0            $0            $0
Paul Moller,      ------- ------------- -------- --------------- -------------- --------------- ---------- ---------------
President          2003   $160,000(1)     $0           $0             $0              0            $0            $0
                  ------- ------------- -------- --------------- -------------- --------------- ---------- ---------------
                   2002   $160,000(1)     $0           $0             $0              0            $0            $0
----------------- ------- ------------- -------- --------------- -------------- --------------- ---------- ---------------
(1) The entire amount shown is deferred at the election of the Executive, not as part of any plan.
--------------------------------------------------------------------------------------------------------------------------
<S>     <C>
</TABLE>


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS

The following are all of the individuals or groups known by the company to be
the beneficial owner of more than five (5) percent of any class of the issuer's
securities:



                                      -24-
<PAGE>

================================================================================
                    Name and Address of       Amount & Nature of      Percent
 Title of Class      Beneficial Owner        Beneficial Ownership     of Class
--------------------------------------------------------------------------------

 Common Stock        Paul S. Moller             33,619,606(1)(2)       56.0%
                     9350 Currey Rd
                     Dixon, CA  95620

--------------------------------------------------------------------------------
(1)  Total includes options to purchase 6,000,000 shares.
(2)  Total includes 25,919,909 shares beneficially owned by Moller Corp., a
     California corporation contolled by Paul S. Moller.
================================================================================


The following are all of our officers and directors who held office during the
fiscal year ending June 30, 2004 and who are beneficial owners of our
securities:

===============================================================================
                     Name and Address of      Amount & Nature of       Percent
Title of Class         BeneficialOwner       Beneficial Ownership      of Class
-------------------------------------------------------------------------------

 Common Stock        Paul S. Moller               33,619,606(1)(2)      56.0%
                     9350 Currey Rd
                     Dixon, CA  95620
-------------------------------------------------------------------------------
 Common Stock        Officers and Directors       33,619,606            56.0%
                     as a group
-------------------------------------------------------------------------------
(1)  Total includes options to purchase 6,000,000 shares.
(2)  Total includes 25,919,909 shares beneficially owned by Moller Corp., a
     California corporation contolled by Paul S. Moller.
===============================================================================


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.


We currently lease and occupy a 34,500 square foot building located in Davis,
California, which is owned by Dr. Paul S. Moller, the majority shareholder of
Moller International. (see Note I to the financial statements)

Notes payable to the majority shareholder, Dr. Paul S. Moller (Moller)are
unsecured, and due on demand. There are two separate notes, one for $1,042,099
which bears interest at $10% per annum, and another note for $270,800 that is
non-interest bearing. (see Note E to the financial statements)

During the year ended June 30, 2004, the Company borrowed $516,142 from Milk
Farm Associates (Milk Farm), a limited partnership, and a related entity. Dr.
Moller is the general partner in Milk Farm and has a 37.7% ownership interest.
(see Note F to the financial statements)




                                      -25-
<PAGE>

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

Exhibit 14 - Moller International Code of Ethics
Exhibit 31 - Certification of CEO / CFO
Exhibit 32 - Certification of CEO / CFO



ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

--------------------------------------------------------------------------
                                               Year ended June 30,
                                        ----------------------------------
                                              2004             2003
--------------------------------------------------------------------------

Audit and Quarterly Review Fees         $          27,785$         20,010
--------------------------------------------------------------------------
Audit-related Fees                                      0               0
--------------------------------------------------------------------------
Tax Fees                                                0               0
--------------------------------------------------------------------------
All Other Fees                                          0               0
--------------------------------------------------------------------------
Total Fees                              $          27,785$         20,010
--------------------------------------------------------------------------


                                   SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                              MOLLER INTERNATIONAL, INC.

November 3, 2004                              /s/ Dr. Paul S. Moller
-------------------                           ---------------------------
Date                                          President, Director




                                      -26-
<PAGE>

Pursuant to the requirements of the Securities Exchange Act of 1934 this report
is signed below by the following persons on behalf of the Company and in the
capacities and on the dates indicated.


     SIGNATURE                      TITLE                         DATE
     ---------                      -----                         ----


/s/ Dr. Paul S. Moller        President, Director               11/03/04
-----------------------       Acting Chief Financial
                              Officer


/s/ Brett Kihara                  Controller                    11/03/04
-----------------------


/s/ A. Gordon Vette           Director                          11/03/04
-----------------------


/s/ Faulkner White            Director                          11/03/04
-----------------------


/s/ Umesh Khimji              Director                          11/03/04
-----------------------


/s/ Monty Lee                 Director                          11/03/04
-----------------------




                                      -27-