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T3 Motion Prepares to Launch New T3 Vision Series Personal Electric Vehicle 4/11/13
T3 Motion, Inc Filing Form 12b-25 with Securities and Exchange Commission 4/1/13
T3 Motion, Inc. CEO William Tsumpes Enhances Financial Position by Closing $750,000 Credit Facility 3/28/13
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Market and Industry Overview
Personal transportation vehicles in the United States have become a necessity with law enforcement and government agencies, university campuses, airports, shopping malls, events/promotions, military/government, and industrial areas. Personal transportation vehicles provide officers improved response times to areas that were previously unavailable to automated transportation. The security market has experienced a growing need for rapid response along with the need to control costs. Similar needs exist in the international market.

Adding to the substantial market for security in the post-9/11 world, increasing awareness of global warming is creating a rapidly growing market for clean technologies. As a zero-gas emissions electric vehicle, the T3 Series is positioned to take advantage of this trend. In the U.S, the increase in homeland security spending since 9/11 has been substantial. We have an opportunity to capture a portion of this market created by police department purchases of police cars, associated upgrades, bicycles and other security equipment purchased with funds from the U.S. Department of Homeland Security (DHS).

Below is the list of specific markets that we believe will continue to experience growth and we intend to serve.

Law Enforcement. As police and sheriff’s departments nationwide continue to search for cost-effective patrol solutions, T3 Motion will continue to provide solutions to this market. According to the U.S. Bureau of Justice, as of 2007, there were 1,017,984 full-time state and local law enforcement personnel. This is a decrease of 5.5% from 2004.

College and University Campuses. According to the U.S. Department of Education 2007-2008, there were more than 4,200 higher education institutions in the United States.

High Schools. According to the National Center for Educational Statistics: 2008, there are over 20,620 public high schools in the U.S.
According to the 2004 National School Resource Officers Survey, school crimes, violence and safety offenses remain significant issues affecting our education system.

Military and Government Agencies. According to the Department of Defense, there were approximately 5,300 military bases and/or military warehouses globally in 2007, which includes Army, Navy, Air Force, USMC and WHS institutions. The Department of Defense also managed over 577,000 physical plants worldwide located on over 32 million acres in the U.S. and 39 foreign countries as of 2007. At least 1,000 are believed to be bases and or military installations, of which 823 are located worldwide that the U.S. operates or controls. With total military personnel deployed in the U.S. and U.S. overseas territories estimated to be over 1.4 million as of 2007, the need to provide security and other activities, including the need to move people within large areas is significant. The T3 Series is currently patrolling high-profile government facilities and military bases such as Andrews Air Force Base and the Smithsonian Institution.

Airports. According to the U.S. Department of Transportation, in 2008 there were 19,930 airports in the U.S. Of these, there were 5,202 public use airports, 14,451 private use airports and 550 certified airports (Certified airports serve air-carriers operations with aircraft seating more than 30 passengers).

Port Security. In the post-9/11 era, according to DHS, February 2006 press release, funding for port security has increased more than 700%. DHS spent over $1.6 billion in 2005 for port security. Additionally, in 2009, an additional $150 million of funding was approved by the DHS.

Private Security Companies. According to the National Association of Security Companies (NASCO) 2006 Private Security Fact Sheet, private security contracting is an approximately $13 billion industry in the U.S. with 11,000 to 15,000 companies employing 1.2 million contract security officers. Contract security officers are increasingly protecting military bases and installations across the country and around the world, and are required to be first responders to any incident. The President’s National Strategy for Homeland Security estimates that these private security officers protect 85% of the country’s infrastructure, which, according to the NASCO, makes private security companies a top funding priority for the federal government.

Manufacturing and Industrial Firms. According to the 2007 U.S. Census Bureau report there are 293,919 manufacturing establishments in the U.S. that have more than 13.3 million employees.

Shopping Malls and Parking Patrol. According to the CoStar National Research Bureau Shopping Center Database and Statistical Model 2005, there are approximately 48,000 shopping malls in the U.S. covering more than six billion square feet of space. The malls are patrolled by private security companies. In addition to malls, there are numerous parking structures throughout the U.S. that are regularly patrolled.

We believe we have the opportunity to provide a unique security solution for these markets. The T3 Series and the T3i Series meet the patrol needs of officers with the added benefit of reducing costs of operation. The T3 Series and T3i Series cost less than 10 cents a day to charge and allow the officer to patrol a larger area than if they were walking.

Growth Strategy
Our mission is to become the leader in clean energy, personal, professional mobility electric stand-up vehicles, and to continue providing products that are economical, functional, safe, dependable and meet the needs of the professional end user. We plan to pursue the following growth strategies in pursuit of our mission:
  • Capitalize on broader private security opportunities. Our initial focus on the law enforcement market has increased the demand for the T3 Series and T3i Series ESV from other security markets, which may hold equal, if not greater, potential for our products. We plan to focus our marketing efforts to pursue the sale of our products into private security markets, which could include corporate campuses, manufacturing facilities, government facilities, military bases, shopping malls, airports and events/promotions.
  • Increase our branding in law enforcement. We intend to continue to build on our reputation within the law enforcement community and plan to pursue additional branding activities in this regard. We believe that maintaining a strong brand within the law enforcement community will facilitate our expansion into other private security markets.
  • Pursue international expansion. We believe the international markets represent a significant opportunity to expand our current sales. We plan to continue to expand our presence in our existing international markets, and to pursue adding new distributors to increase our sales in Asia and Europe.
  • Expand the T3 Series product line to address broader markets. We believe the modularity of our sub-systems may be used to configure additional vehicles that address the personal transportation and personal mobility requirements in existing and new markets. We plan to evaluate the expansion of our product line to leverage our technologies for additional commercial markets such as for delivery services, property management, utility and maintenance providers, in addition to any other private venue requiring security.
  • Leverage our brand into the consumer market. As we gain additional brand name recognition, we plan to leverage our brand to enter the consumer market for personal transportation. We are currently working on the development of the Electric/Hybrid Vehicle to address the consumer markets and plan to evaluate the expansion of our product line for other consumer applications.
Marketing and Distribution
We market and sell our products through our direct sales force located at our headquarters in Costa Mesa, California. We have agreements with numerous domestic and international distributors and manufacturer’s representatives, adding substantially to our direct sales force. We plan to continue to expand our international sales by engaging additional distributors in new and existing markets, particularly in Asia and Europe. Our standard distribution agreements provide for the right to distribute our vehicle and accessories within defined geographic locations and defined markets. Our distribution agreements allow the distributor to purchase our products at set prices; however, generally there is no requirement that the distributors meet a minimum order quantity. Our distribution agreements usually can be cancelled by either party upon 60 days prior written notice.

We value our customer input as we are a customer-driven company. We generally follow a fundamental approach using the following core customer interests:

  • We evaluate the available budget from the customer, building the value of the product rather than price.
  • Return on Investment (ROI). Our products have demonstrated significant operational savings over gas powered vehicles and allow the end user greater mobility and work efficiencies.
  • We maintain a manufacturing process that generally holds lead times to a 4-6 week timeframe.
  • We have an in-field swappable power system that enables our clients to operate vehicles without downtime for charging. The sustainable engineering and design was specifically tailored for the professional end user in law enforcement and private security
  • Our vehicle has demonstrated that the iconic look and command presence has a crime deterrent ability
  • The T3 Series and T3i Series ESVs allow the user greater mobility to maneuver through crowds and tight areas, effectively increasing the patrol area and granting the user job efficiencies.
Research and Development
We emphasize product research and development (“R&D”). For the years ended December 31, 2010 and 2009, we spent $1,602,961 and $1,395,309, respectively, on R&D for development of products such as the CT-Series, the Hybrid/Electric Vehicle and to ensure that the T3 Series and T3i Series personal mobility vehicles are properly designed to be more effective and useful tools for the public safety and private security market. In addition, we will continue to refine and optimize all aspects of the vehicle design to maintain the high standards of vehicle performance, cost effectiveness and to continue to meet the needs of our customers.
Operation and Manufacturing
We emphasize product research and development (“R&D”). For the years ending December 31, 2010, 2009, 2008 and 2007, we spent $1,602,961, $1,395,309, $1,376,226 and $1,243,430, respectively, on R&D for development of products such as the CT-Series, the Commuter Vehicle and to ensure that the T3 Series and T3i Series personal mobility vehicles are properly designed to be extremely effective and useful tools for the public safety and private security market. In addition, we will continue to refine and optimize all aspects of the vehicle design to maintain the high standards of vehicle performance, cost effectiveness and to continue to meet the needs of our customers.
Raw Materials and Suppliers
Currently, over 70% of our T3 Series suppliers are local suppliers who provide products and services to low volume early stage development companies. As the vehicle design has become stable and sales volumes have increased, we have begun our transition to incorporate a global supply chain. We have made significant progress in establishing relationships with suppliers who service volume production stage companies. In addition, we plan to invest in production tooling that will yield consistent high quality and lower cost parts designed to our specifications. We plan to implement our multi-source supply chain strategy in working directly with established factories within the automotive and motorcycle industry. The supply chain could include materials sourcing and subassembly operations from sources in China, South Korea and Mexico. These components will be shipped to our operations facility in Costa Mesa, California for final assembly, test, inspection, and shipments to our customers. We plan to continue to expand this multiple source supplier base to allow us to utilize both current U.S. based suppliers and newly acquired global suppliers to reduce the risks of our existing single sourced components and reduce product costs.

We do not manufacture the CT Micro Car. Fully-built versions are delivered to us from the developer and manufacturer, CT&T, a Korean electric car manufacturer. We outfit the CT Micro Car with our power management and battery technologies.

We currently compete with other providers of in personal mobility vehicle design, manufacturing and marketing including, without limitation, Segway, California Motors-Ride Vehicles and Gorilla Vehicles, but also compete with other forms of transportation such as bicycles, horses and standard police cars.

Some of our competitors are larger than we are and may have significantly greater name recognition and financial, sales and marketing, technical, manufacturing and other resources. These competitors may also be able to respond rapidly to new or emerging technologies and changes in customer requirements or devote greater resources to the development, promotion and sale of their products. Our competitors may enter our existing or future markets with products that may provide additional features or that may be introduced earlier than our products.

We attempt to differentiate ourselves from our competitors by working to provide superior customer service and developing products with appealing functions targeted to our core markets of professional end users in law enforcement, private security, and government.

Risk Factors
This website contains “forward-looking statements” that are based on current information and expectations, and involve risks and uncertainties, many of which are beyond the Company’s control. The Company’s actual results could differ materially and adversely from those anticipated in such forward-looking statements as a result of certain factors, including those set forth below, in the “Risk Factors” section in the S-filing of the prospectus, when available. Important factors that may cause actual results to differ from projections include the following, among others:

• Adverse economic conditions;
• Inability to raise sufficient additional capital on a timely basis, on acceptable terms, or at all;
• Unexpected costs and operating deficits, and lower than expected sales and revenues;
• Adverse results of any legal proceedings;
• Inability to enter into acceptable relationships with one or more contract manufacturers and suppliers for our key components and the failure of such contract manufacturers to produce components of an acceptable quality on a cost-effective basis;
• The volatility of our operating results and financial condition;
• Inability to attract or retain qualified senior management personnel, including sales and marketing personnel; and
• Other specific risks that may be alluded to referred to in our Prospectus.

All statements, other than statements of historical facts, included in this website regarding the Company’s growth strategy, expansion and development plans, future operations, financial position, estimated revenue or losses, projected costs, prospects and plans and objectives of management are forward-looking statements. When used in this website, the words “will,” “may,” “should,” “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” “plan” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. All forward-looking statements speak only as of the date of the formulation of our S-1 prospectus. The Company undertakes no obligation to update any forward-looking statements or other information contained herein, unless otherwise required by law. Potential investors should not place undue reliance on these forward-looking statements. Although T3 Motion believes that its plans, intentions and expectations reflected in or suggested by the forward-looking statements in this website are reasonable, the Company cannot guarantee future results or that these plans, intentions or expectations will be achieved. The Company discloses important factors that could cause the Company’s actual results to differ materially from its expectations under “Risk Factors” section of our S-1 filing and elsewhere in this website. These cautionary statements qualify all forward-looking statements attributable to the Company or persons acting on its behalf. See “Risk Factors” section of the S-1 filing on the SEC website for a more detailed discussion of uncertainties and risks that may have an impact on future results.

The market data included in this website concerning our business and markets, is estimated and based on data available from independent market research firms, industry trade associations or other publicly available information.

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