ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

Three Months Ended September 30, 2007 and September 30, 2006

For the three-months ended September 30, 2007, we had a net loss of $81,071 or $0.00 loss per share as compared to a net loss of $631,629 or $0.01 loss per share for the same period of 2006. Contract revenues from an affiliated entity increased by $516,480 this period and was recognized when the cash was received. These increases are not indicative of any meaningful revenue trends. We continue to pursue the development of the Skycar, Rotapower engine and Aerobot products. The Company currently proposes to produce variations of its M200X, an earlier prototype volantor. Although there is no assurance that this vehicle will meet with success in the market place, the Company is actively seeking support for the program and, if found, may choose to move into the production of these vehicles.

Going Concern

As of September 30, 2007, MI has accumulated deficits of $40,567,227 MI currently has limited recurring revenue-producing products and is continuing its development of products in both the Skycar and Rotapower 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 MI's ability to obtain additional financing sufficient to complete product development activities and provide working capital to fund the manufacture and sale of MI's products. These factors raise substantial doubt as to MI's ability to continue as a going concern.

Management is currently pursuing additional sources of capital in quantities sufficient to fund product development and manufacturing and sales activities.