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{copy of } Letter from the President: November 2001 from http://www.moller.com/news/

 Dear Friends,

The Skycar continues to show progress as we perform tests both on the ground and in tethered airborne flights. As with the M200X, the stability of the aircraft can only be addressed once the mechanical systems are all perfectly tuned and running. We have been able to lift the Skycar off the tether with all engines operating at 6,500 RPM. Since the engines are able to operate at over 7,000 RPM we are very comfortable with the reserve power available. We have been “dialing in” the redundant digital stability system over the past few weeks. Our goal is to achieve the easy stable flights we performed with the M200X's analog system after it was dialed in. With daily, and frequently multiple tests per day, we are making steady but cautious progress. Once this step is complete, we will be able to demonstrate the extended stable and controllable hover flight we have all been anxiously awaiting.

We also are very pleased to announce the award of an Aerobot® procurement contract. The California Department of Transportation (CALTRANS) has given us a contract to built and deliver an Aerobot® to be used for bridge inspections. The Aerobot®, our small Unmanned Aerial Vehicle (UAV) is another offshoot of the ducted fan technologies used on the Skycar. This Aerobot® will be set up for remote piloting under and around structures, and will have data gathering capabilities with an on-board TV camera. With all the recent concerns about the safety of our bridges, it may become a common sight at some Bay Area locations.

The Rotapower® engine continues to generate considerable interest as well. We have recently been host to a number of new companies and private entrepreneurs visiting us and seeking information about the engine. Our sister company, Freedom Motors, has completed another demonstration vehicle and we hope to be able to post some very impressive performance numbers with this personal water craft sporting its new 3-rotor engine. Watch for information on this at the Freedom Motors web site ( www.freedom-motors.com )

On business issues, we continue our quiet period mandated by the SEC and are unable to discuss the status or possible outcome of our application to become a publicly reporting company. I hope in some future issue of this letter that we will be free to discuss it more fully.

I appreciate the on-going support and kind comments that you have been providing and I am looking forward to giving you the news that you so patiently have been waiting for…that the Skycar is now easy to hover and maneuver. We are so very close now, so I am confident it will be soon.

Sincerely,

Paul S. Moller
President