##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number: 333-150888
 T3 Motion, Inc.
  Delaware
    
    20-4987549(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)2990 Airway Ave., Suite ACosta Mesa, California
    
    92626(Address of principal executive offices)
    
    (Zip Code)
  
 o þ
 o þ
 þ o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
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TABLE OF CONTENTS
TO ANNUAL REPORT ON FORM 10-K
FOR YEAR ENDED DECEMBER 31, 2008
 Forward-Looking Statements and Certain Terminology
    
    PagePART I
    
    2Item 1. Business
    
    2Item 1A. Risk Factors
    
    10Item 2. Properties
    
    18Item 3. Legal Proceedings
    
    19Item 4. Submission of Matters to a Vote of Security Holders
    
    19PART II
    
    19Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    19Item 6. Selected Financial Data
    
    20Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    21Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    30Item 8. Financial Statements and Supplementary Data
    
    30Item 9. Disagreements With Accountants on Accounting and Financial Disclosure
    
    30Item 9A. Controls and Procedures
    
    30Item 9B. Other Information
    
    32PART III
    
    32Item 10. Directors, Executive Officers and Corporate Governance
    
    32Item 11. Executive Compensation
    
    34Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    38Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    39Item 14. Principal Accounting Fees and Services
    
    42PART IV
    
    43Item 15. Exhibits, Financial Statement Schedules
    
    43Signatures
    
    45EX-10.28EX-10.29EX-10.31EX-10.32EX-10.33EX-10.34EX-10.35EX-31.1EX-31.2EX-32.1EX-32.2
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FORWARD-LOOKING STATEMENTS AND CERTAIN TERMINOLOGY
 This annual report on Form 10-K contains certain statements that may be deemed to be
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other
than statements of historical facts, included in this report are forward-looking statements. When
used in this report, the words may, will, should, would, anticipate, estimate,
possible, expect, plan, project, continuing, ongoing, could, believe, predict,
potential, intend, and similar expressions are intended to identify forward-looking statements.
Forward-looking statements are subject to risks and uncertainties that could cause actual results
to differ materially from those projected. These risks and uncertainties include, but are not
limited to, availability of additional equity or debt financing, changes in sales or industry
trends, competition, retention of senior management and other key personnel, availability of
materials or components, ability to make continued product innovations, casualty or work stoppages
at the Companys facilities, adverse results of lawsuits against the Company and currency exchange
rates. Forward-looking statements are based on assumptions and assessments made by the Companys
management in light of their experience and their perception of historical trends, current
conditions, expected future developments and other factors they believe to be appropriate. Readers
of this report are cautioned not to place undue reliance on these forward-looking statements, as
there can be no assurance that these forward-looking statements will prove to be accurate and speak
only as of the date hereof. Management undertakes no obligation to publically release any revisions
to these forward-looking statements that may reflect events or circumstances after the date hereof
or to reflect the occurrence of unanticipated events. This cautionary statement is applicable to
all forward-looking statements contained in this report.
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PART I
 
 ITEM 1. BUSINESS
 Overview
 
 History and Development of the Company
    Corporate Background
 Vision Financing
 th
  2




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Lock-Up Agreement
 th
 Market and Industry Overview
     Law Enforcement.
 College and University Campuses.
 High Schools.
 3




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Military and Government Agencies.
 Airports.
 Port Security.
 Private Security Companies.
 Manufacturing and Industrial Firms.
 Shopping Malls and Parking Patrol.
 The T3 Motion, Inc. Product Line
 T3 Series ESV
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Power Modules
  Accessories
  Camera System
  Data License
  
    
    EMS/Disaster Planning  The ability to provide an interactive map for
EMS use to understand and secure the area that has been breached.
    
    Local Security  The ability to have an interactive map of all areas
patrolled (including secure areas) for internal training and security.
    
    Advertising  The data can be used to provide interactive tours of any
area along with the ability to place or sell advertising in the mapped
areas.
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CT Series
  
 Future Products
    Growth Strategies and Marketing
 Growth Strategies
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
    
    Increase our leading presence in law
enforcement. We intend
to continue to build on its reputation as the ESV of choice by
aggressively marketing towards the law enforcement community through
trade shows and direct and indirect sales. We have identified
the key accounts within our core market segments of law enforcement,
government and security/private industry that will achieve our primary
sales goals and objectives, including driving key regional market
penetration, product recognition and brand presence.
    
    Capitalize on broader security opportunities. Our success in the law
enforcement market has had a viral effect and led to significant
inbound demand for the T3 Series from other security markets, which
hold equal, if not greater, potential. These markets include airports,
events/promotions, government/military, shopping malls and university
campuses. We believe we will generate significant interest in these
markets with potentially significant orders over the next 12 to
24 months.
    
    Expand the T3 Series product line to address broader enterprise
markets. We intend to leverage the modularity of our sub-systems to
configure additional vehicles that address the needs of the broader
enterprise markets. These needs include delivery services, personnel
transportation and personal mobility.
    
    Leverage brand into the consumer market. As we extend our leading
position in the law enforcement and security markets and continue to
develop our brand name and reputation, we intend to leverage our
strong brand to enter the consumer market for personal transportation.
We have a robust product roadmap of consumer-focused vehicles that
will utilize the same low-cost, high-quality component sourcing and
sub-assembly.
  
    
    Building a strong brand in our strategic market. During 2007 and
2008, we have successfully built strong brand awareness within our
strategic market of law enforcement. As a result, we sold and shipped
over 1,000 vehicles and have garnered interest from numerous customers
for larger orders. Our brand strength and value is evidenced by
increasing numbers of repeat orders in 2008 by law enforcement
customers and the large volume orders from new customers. Our success
has led to interest from new emerging markets such as emergency
medical services, the correctional industry, utility/maintenance
applications and high-profile/high-visibility national security
accounts. By following our strategy, management believes we will see
continued success in both our core strategic market (nationally and
internationally) and emerging markets.
    
    Grow our partnering relationships with key security
companies. Currently, we have built relationships with national
private security providers. In order to see continued success, we have
marketed the T3 Series as an integrated security solution. This
internal sales strategy has positioned our T3 Series as a premier
solution due to its economical and environmentally-friendly benefits.
In particular, it has led to additional trials of our T3 Series
products with customers of these security providers. This strategy has
lead to additional market penetration within the markets for property
management, entertainment/sporting venues, retail department store
chains and high-profile venues.
    
    Expand our distributors and manufacturing representatives
nationwide. We have structured  our distributors and manufacturing
representatives base into six geographic regions within the United
States as well as Canada, Middle East and Mexico. Our sales force has a
comprehensive qualification process that identified the top performing
representative firms. Subsequently, we have put under contract the
leading representative companies and distribution companies
nationwide.
 
    
    Expand our marketing and sales efforts globally. We have
positioned global sales offices in five geographic locations (US,
Korea, China, Middle East and Europe). Included in our global
expansion plans, we are developing service solutions for each
geographic region to maintain our level of customer service.
    
    Expand our products. We intend to continue adding custom and standard
accessories to our T3 Series such as firearm/rifle mounts, trailer,
license plate identification system, vehicle camera, helmets,
clothing, first aid kits, emergency response kits, mirrors, lighting,
etc.
    
    Leveraging T3 Brand. We plan to continue leveraging the
strength of our brand and distribution channels to increase revenue
opportunities and offer related products such as license plate
recognition, global position tracking (commonly known as GPS), asset
tracking, defibrillators, ballistic shields, tires, trailers and other
related products.
    
    Increase our presence in high profile
venues. Our product has been present in some high profile venues such
as the 2008 and 2007 Super Bowl, the 2008 Daytona 500 and the 2008 NBA
finals. We plan to continue to target high profile venues in order to
increase our brand awareness.
    
    Increase residual income on current
customer base. We will offer additional services and products to our
growing customer base such as extended warranties and service
contracts for our products after warranty periods have expired.
    
    Service. During the 2009 calendar year, we plan to roll out
our third party service program, whereby our customers will be able to
take their vehicles to any of the authorized service locations for
warranty and non-warranty service. The program will provide an
efficient and cost effective way for customers to keep their vehicles
running in their optimum condition.
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Marketing and Distribution
 
 Sources and Availability of Raw Materials; Principal Suppliers
  Operating and Manufacturing Strategy
   Competition
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
    
    We evaluate the available budget from the customer, building the value of the
product rather than price. For example, one packaged T3 Series is able to fulfill
the clients needs for a multi-shift deployment related to competing products.
    
    We maintain a manufacturing process that holds lead times to a 4-6 weeks 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.
 Intellectual Property
  Type
    
    Name
    
    Issued by
    
    DescriptionTrademark
    

(T3 MOTION LOGO)
    
    United States
Patent and
Trademark Office
    
    Logo, brand name used on our productsTrademark
    
    

    United States
Patent and
Trademark Office
    
    Logo, brand name used on our productsTrademark
    
    ENABLING PERSONAL
MOBILITY
    
    United States
Patent and
Trademark Office
    
    Logo, brand name used on our products
     Government Approvals and Regulation
  
    
    The T3i Series product has passed EMC testing for EN6100-6-1 and EN61000-6-3
    
    Batteries and chargers  were found to be technically compliant with the EN55022,
EN61000-3-2, EN61000-3-3, and EN55024 requirements.
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Employees
  Corporate Information
 www.T3motion.com.
 
 ITEM 1A. RISK FACTORS
 Risks Related to Our Company and Our Industry
 Our limited operating history may not serve as an adequate basis to judge our future prospects and
results of operations.
   As a recently formed corporation, we have had very limited operations to date and expect to incur
losses in the near future. We may require additional financing to sustain our operations and
without it we may not be able to continue our operations.
   If we are unable to continue as a going concern, our securities will have little or no value.
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Adverse conditions in the global economy and disruption in financial markets could impair our
revenues.
  Our markets are highly competitive, and if we are unable to compete effectively, we will be
adversely affected.
  Our failure to further refine our technology and develop and introduce new personal mobility
products could render our products uncompetitive or obsolete, and reduce our sales and market
share.
  We face risks associated with the marketing, distribution and sale of our personal mobility
products internationally, and if we are unable to effectively manage these risks, they could impair
our ability to expand our business abroad.
 
    
    fluctuations in currency exchange rates;
    
    difficulty in engaging and retaining distributors who are knowledgeable about and, can function effectively in, overseas markets;
    
    increased costs associated with maintaining marketing efforts in various countries;
    
    difficulty and cost relating to compliance with the different commercial and legal requirements of the overseas markets in which
we offer our products; and
    
    inability to obtain, maintain or enforce intellectual property rights.
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Our business depends substantially on the continuing efforts of our executive officers and our
ability to maintain a skilled labor force, and our business may be severely disrupted if we lose
their services.
  The products we sell are inherently risky and could give rise to product liability, product
warranty claims and other loss contingencies, which could adversely affect our business and
financial results.
   Our prospects for sales growth and profitability will be adversely affected if we have product
replacement issues, or if we otherwise fail to maintain product quality and product performance at
an acceptable cost.
  The failure to achieve acceptable manufacturing yields could adversely affect our business.
  From time to time we engage in related party transactions. There are no assurances that these
transactions are fair to our company.
  We are dependent on a few single sourced third party manufacturers. Any interruption in our
relationships with these parties may adversely affect our business.
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Our dependence on third party suppliers for key components of our devices could delay shipment of
our products and reduce our sales.
  Many of our customers have fluctuating budgets, which may cause substantial fluctuations in our
results of operations.
  Our resources may be insufficient to manage the demands imposed by our growth.
  Decreased demand for electric vehicles could cause our products to become obsolete or lose
popularity.
  
    
    continued development of product technology;
    
    the environmental consciousness of customers;
    
    the ability of electric vehicles to successfully compete with vehicles powered by internal combustion engines;
    
    widespread electricity shortages and the resultant increase in electricity prices, especially in our primary
market, California, which could derail our past and present efforts to promote electric vehicles as a
practical solution to vehicles which require gasoline; and
    
    whether future regulation and legislation requiring increased use of nonpolluting vehicles is enacted.
  The failure of certain key suppliers to provide us with components could have a severe and negative
impact upon our business.
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Our success is heavily dependent on protecting our intellectual property rights.
   We may be exposed to liability for infringing intellectual property rights of other companies.
  Our officers and directors own a substantial portion of our outstanding common stock, which will
enable them to influence many significant corporate actions and in certain circumstances may
prevent a change in control that would otherwise be beneficial to our shareholders.
  Risks Relating Ownership of Our Securities
 If a public market for our common stock develops, we expect to experience volatility in the price
of our common stock. This may result in substantial losses to investors if they are unable to sell
their shares at or above their purchase price.
  
    
    our status as a company with a limited operating history and limited revenues to
date, which may make risk-averse investors more inclined to sell their shares on
the market more quickly and at greater discounts than would be the case with the
shares of a seasoned issuer in the event of negative news or lack of progress;
    
    announcements of technological innovations or new products by us or our competitors;
    
    the timing and development of our products;
    
    general and industry-specific economic conditions;
    
    actual or anticipated fluctuations in our operating results;
    
    our capital commitments; and
    
    the loss of any of our key management personnel.
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We do not anticipate paying any cash dividends in the foreseeable future, which may reduce your
return on an investment in our common stock.
  Substantial future sales of our common stock in the public market may depress our stock price.
    We may raise additional capital through a securities offering that could dilute your ownership
interest and voting rights.
   Our incorporation documents and Delaware law may inhibit a takeover that stockholders consider
favorable and could also limit the market price of your stock, which may inhibit an attempt by our
stockholders to change our direction or management.
  
    
    authorize our board of directors to determine the rights, preferences, privileges and restrictions granted to, or imposed
upon, the preferred stock and to fix the number of shares constituting any series and the designation of such series without
further action by our stockholders;
    
    prohibit stockholders from calling special meetings;
    
    prohibit cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to
elect director candidates;
    
    establish advance notice requirements for submitting nominations for election to the board of directors and for proposing
matters that can be acted upon by stockholders at a meeting; and
    
    prohibit stockholder action by written consent, requiring all stockholder actions to be taken at a meeting of our stockholders.
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We will be subject to the penny stock rules once our common stock becomes eligible for trading.
These rules may adversely affect trading in our common stock.
   We will incur increased costs and compliance risks as a result of becoming a public company.
   If our shares are traded on the OTC Bulletin Board, they may be thinly traded, so you may be
unable to sell at or near ask prices or at all if you need to sell your shares to raise money or
otherwise desire to liquidate your shares.
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The market price for our Common Stock may be particularly volatile given our status as a relatively
unknown company with a small and thinly traded public float, limited operating history and lack of
profits which could lead to wide fluctuations in our share price. The price at which you purchase
the Shares may not be indicative of the price of the Common Stock that will prevail in the trading
market. You may be unable to sell your Shares at or above your purchase price, which may result in
substantial losses to you.
  
    
    quarterly variations in our revenues and operating expenses;
    
    announcements of new products or services by us;
    
    fluctuations in interest rates;
    
    significant sales of our Common Stock;
    
    the operating and stock price performance of other companies that investors may deem comparable to us; and
    
    news reports relating to trends in our markets or general economic conditions.
  Our operating results may fluctuate significantly, and these fluctuations may cause our Common
Stock price to fall.
  
    
    market acceptance of our products and those of our competitors;
    
    our ability to attract and retain key personnel;
    
    development of new designs and technologies; and
    
    our ability to manage our anticipated growth and expansion.
 Shares eligible for future sale may adversely affect the market.
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Investors who purchased units of our securities, consisting of common stock and warrants to
purchase common stock, from December 2007 through December 2008, have anti-dilution rights with
respect to the shares of common stock issued in the unit offering. These rights are not available
to other holders of our common stock. If future issuances of our common stock trigger these
anti-dilution rights, holders of our common stock would have their investments diluted.
  Holders of our 10% Bridge Financing have anti-dilution rights that are triggered by a disposition
of our common stock at a price per share that is lower than the conversion price of such notes.
These rights are not available to the holders of our common stock. If future issuances of our
common stock trigger the anti-dilution rights, an investment in our common stock would be diluted
to the extent such convertible notes are converted.
  We are responsible for the indemnification of our officers and directors, which could result in
substantial expenditures.
  
 ITEM 2. PROPERTIES
  Location
    
    Principal Activities
    
    Area (Sq. Meters)
    
    Lease Expiration Date2990 Airway Ave.,
Costa Mesa,
California 92626
    
    Main Office and Manufacturing facility
    
    
    33,520
    
    
    August 31, 20122975 Airway Ave.,
Costa Mesa,
California 92626
    
    Research and Development, warehouse,
and service facility
    
    
    14,000
    
    
    December 31, 2009
  Year Ended December 31
    
    Amount2009
    
    $
    389,0002010
    
    
    299,0002011
    
    
    309,0002012
    
    
    214,000
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ITEM 3. LEGAL PROCEEDINGS
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 PART II
 
 ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES
 Market Information
  Holders
  Dividends
  Securities Authorized for Issuance under Equity Compensation Plans
  Number of SecuritiesWeighted-Average
    
    Remaining AvailableExercise Price of
    
    for Future IssuanceNumber of Securities to be
    
    Outstanding
    
    Under EquityIssued Upon Exercise of
    
    Options,
    
    Compensation PlansOutstanding Options,
    
    Warrants and
    
    (Excluding SecuritiesPlan Category
    
    Warrants and Rights
    
    Rights
    
    Reflected in Column (a))(a)
    
    (b)
    
    (c)Equity
compensation plans
approved by
stockholders
    
    
    6,468,167
    
    
    $
    0.76
    
    
    
    981,833Equity
compensation plans
not approved by
stockholders
    
    
    5,380,408
    
    
    $
    1.48
    
    
    
    Total
    
    
    11,848,575
    
    
    
    
    
    
    
    981,833
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Equity Incentive Plan
  Warrants
  Sales of Unregistered Securities
  
 ITEM 6. SELECTED FINANCIAL DATA
  Statement of Operations Data:
 For thePeriod fromMarch 16,2006 (Inception)Years Ended
    
    
    throughDecember 31,
    
    
    December 31,2008
    
    
    2007
    
    
    2006Total Revenues
    
    $
    7,589,265
    
    
    $
    1,822,269
    
    
    $
    Gross Loss
    
    
    (1,703,611
    )
    
    
    (2,106,256
    )
    
    
    Operating Expenses
    
    
    9,917,111
    
    
    
    6,422,705
    
    
    
    3,466,629Loss from Operations
    
    
    (11,620,722
    )
    
    
    (8,528,961
    )
    
    
    (3,466,629
    )Net Loss
    
    
    (12,297,797
    )
    
    
    (8,577,232
    )
    
    
    (3,500,798
    )Net Loss per
Share - Basic and Diluted
    
    $
    (0.29
    )
    
    $
    (0.24
    )
    
    $
    (0.12
    )
 Statement of Cash Flow Data:
 For thePeriod fromMarch 16,2006 (Inception)Years Ended
    
    throughDecember 31,
    
    December 31,2008
    
    2007
    
    2006Net Cash Used in Operating Activities
    
    $
    (8,775,598
    )
    
    $
    (6,655,226
    )
    
    $
    (3,184,654
    )Net Cash Used in Investing Activities
    
    $
    (2,063,768
    )
    
    $
    (780,867
    )
    
    $
    (216,002
    )Net Cash Provided by Financing Activities
    
    $
    7,584,401
    
    
    $
    12,362,554
    
    
    $
    3,407,244
 Balance Sheet Data:
 December 31,2008
    
    2007
    
    2006Total Assets
    
    $
    7,904,188
    
    
    $
    7,628,226
    
    
    $
    1,116,402Related
Party Note Payable, Net of Debt Discount
    
    $
    1,986,598
    
    
    $
    1,514,103
    
    
    $
    Total Liabilities
    
    $
    7,188,313
    
    
    $
    3,936,979
    
    
    $
    2,322,200Total Stockholders Equity (Deficit)
    
    $
    715,875
    
    
    $
    3,691,247
    
    
    $
    (1,205,798
    )
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Going Concern
   
 ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
 The following discussion and analysis of our results of operations and financial condition for the
years ended December 31, 2008 and 2007 should be read in conjunction with our financial statements
and the notes to those financial statements that are included elsewhere in this Annual Report on
Form 10-K. All statements, other than statements of historical facts, included in this report are
forward-looking statements. When used in this report, the words may, will, should, would,
anticipate, estimate, possible, expect, plan, project, continuing, ongoing,
could, believe, predict, potential, intend, and similar expressions are intended to
identify forward-looking statements. Forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially from those projected. These
risks and uncertainties include, but are not limited to, availability of additional equity or debt
financing, changes in sales or industry trends, competition, retention of senior management and
other key personnel, availability of materials or components, ability to make continued product
innovations, casualty or work stoppages at the Companys facilities, adverse results of lawsuits
against the Company and currency exchange rates. Forward-looking statements are based on
assumptions and assessments made by the Companys management in light of their experience and their
perception of historical trends, current conditions, expected future developments and other factors
they believe to be appropriate. Readers of this report are cautioned not to place undue reliance on
these forward-looking statements, as there can be no assurance that these forward-looking
statements will prove to be accurate and speak only as of the date hereof. Management undertakes no
obligation to publically release any revisions to these forward-looking statements that may reflect
events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
This cautionary statement is applicable to all forward-looking statements contained in this report.
 Overview
   Going Concern
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Critical Accounting Policies and Estimates
 
 
 Concentrations of Credit Risk
 Cash
  Receivables
  Cash and Cash Equivalents
 
 Concentration of Risk
  
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Inventories
 
 Property and Equipment
  Intangible Property
  Impairment of Long-Lived Assets
 Accounting for the Impairment or Disposal of Long-Lived Assets
 Fair Value of Financial Instruments
  Revenue Recognition
 Revenue Recognition
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Share Based Compensation
 Share-Based Payment
  Accounting for Equity
Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling
Goods or Services, Accounting Recognition for Certain Transactions
Involving Equity Instruments Granted to other than Employees.
  Income Taxes
 Accounting for Income Taxes
 Beneficial Conversion Features and Debt Discounts
 Accounting For convertible Securities
with Beneficial Conversion Features or Contingently Adjustable Conversion Ration Application of EITF Issue No. 98-5 To Certain convertible Instruments.
 Loss Per Share
 
 Research and Development
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Advertising
 
 Commitments and Contingencies
 
 Recent Accounting Pronouncements
 Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not
Active Fair Value Measurements,
 Business Combinations
 Determining Whether an Instrument(or an
Embedded Feature) is Indexed to an Entitys Own Stock, The Meaning of
Indexed to a Companys Own Stock, Accounting for Derivative Instruments and Hedging Activities,
 Effective
Date of FASB Statement No. 157 Fair Value Measurements, ,
 Non-controlling Interests in Consolidated Financial Statements,
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Fair Value Measurements
 Business Segments
  Recent Events
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##### Table of Contents



Results of Operations
  For the periodfrom March 16,2006 (inception)throughYears Ended December 31,
    
    
    December 31,2008
    
    
    2007
    
    
    2006Revenues
    
    $
    7,589,265
    
    
    $
    1,822,269
    
    
    $
    Cost of revenues
    
    
    9,292,876
    
    
    
    3,928,525
    
    
    
    Gross loss
    
    
    (1,703,611
    )
    
    
    (2,106,256
    )
    
    
    Operating Expenses:Sales and marketing
    
    
    2,290,253
    
    
    
    1,724,779
    
    
    
    Research and development
    
    
    1,376,226
    
    
    
    1,243,430
    
    
    
    1,251,169General and administrative
    
    
    6,250,632
    
    
    
    3,454,496
    
    
    
    2,215,460Total operating expenses
    
    
    9,917,111
    
    
    
    6,422,705
    
    
    
    3,466,629Loss from operations
    
    
    (11,620,722
    )
    
    
    (8,528,961
    )
    
    
    (3,466,629
    )Other income (expense):Interest income
    
    
    55,091
    
    
    
    3,239
    
    
    
    826Other (expense) income
    
    
    (73,783
    )
    
    
    12,426
    
    
    
    Interest expense
    
    
    (657,583
    )
    
    
    (63,136
    )
    
    
    (34,195
    )Total other expense, net
    
    
    (676,275
    )
    
    
    (47,471
    )
    
    
    (33,369
    )Loss before provision for
income tax
    
    
    (12,296,997
    )
    
    
    (8,576,432
    )
    
    
    (3,499,998
    )Provision for income tax
    
    
    800
    
    
    
    800
    
    
    
    800Net loss
    
    
    (12,297,797
    )
    
    
    (8,577,232
    )
    
    
    (3,500,798
    )Other comprehensive
income (loss):Foreign currency
translation income (loss)
    
    
    5,434
    
    
    
    (777
    )
    
    
    Comprehensive loss
    
    $
    (12,292,363
    )
    
    $
    (8,578,009
    )
    
    $
    (3,500,798
    )Net loss per share:Basic and diluted
    
    $
    (0.29
    )
    
    $
    (0.24
    )
    
    $
    (0.12
    )Weighted average number
of common shares
outstanding:Basic and diluted
    
    
    42,387,549
    
    
    
    35,223,795
    
    
    
    30,126,980
 27




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##### Table of Contents



Revenues.
 Cost of revenues.
 Gross loss.
 Sales and marketing expense.
 Research and development.
 General and administrative.
 Total other expense
 Net loss.
 LIQUIDITY AND CAPITAL RESOURCES
  28




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##### Table of Contents



Cash Flows
 For the Years Ended December 31, 2008 and 2007 and the period from March 16, 2006 (inception)
through December 31, 2006
    Contractual Obligations and Off-Balance Sheet Arrangements
 Contractual Obligations
   Less thanContractual Obligation
    
    Total
    
    
    1 year
    
    
    1-3 yearsNote payable
    
    $
    3,200,000
    
    
    $
    2,200,000
    
    
    $
    1,000,000Stockholder payable
    
    
    2,034,734
    
    
    
    2,034,734
    
    
    
    Operating lease
    
    
    1,211,000
    
    
    
    389,000
    
    
    
    822,000Total Contractual Obligations
    
    $
    6,445,734
    
    
    $
    4,623,734
    
    
    $
    1,822,000
 Off-Balance Sheet Arrangements
    29




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##### Table of Contents



ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Interest Rates
 
 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  
 ITEM 9. DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
  
 ITEM 9A. CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
   Internal Control over Financial Reporting
 (a)
    
    Managements annual report on internal control over financial reporting
  
    
    Pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of
the assets of the Company;
    
    Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that
receipts and expenditures of the Company are being made only in
accordance with authorizations of management and directors of the
Company; and
    
    Provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the
Companys assets that could have a material effect on the
financial statements.
  30




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##### Table of Contents



Internal
ControlIntegrated Framework
        (b)
    
    Changes in internal control over financial reporting
  
    
    We have hired additional professional accounting resources to assist
with the review of accounting policies and procedures and financial
reporting with knowledge, experience and training in the application
of GAAP.
  
    
    We are in the process of further enhancing, our internal finance and
accounting organizational structure, which includes hiring additional
resources.
    
    We are in the process of further enhancing, the supervisory procedures
that will include additional levels of analysis and quality control
reviews within the accounting and financial reporting functions.
    
    We are in the process of strengthening our internal policies and
enhancing our processes for ensuring consistent treatment and
recording of reserve estimates and that validation of our conclusions
regarding significant accounting policies and their application to our
business transactions are carried out by personnel with an appropriate
level of accounting knowledge, experience and training.
    
    We converted our accounting software platform to a platform that has
inherent controls to assist with the increase of controls and reviews.
 31




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##### Table of Contents



ITEM 9B. OTHER INFORMATION
  
 PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
 Executive Officers and Directors
 
 Name
    
    Age
    
    Positions Held
    
    Officer/Director SinceKi Nam
    
    49
    
    Chief Executive Officer and Chairman
    
    2006Kelly J. Anderson
    
    41
    
    Executive Vice President, Chief Financial Officer  and Director
    
    2008Jason Kim
    
    42
    
    Chief Operations Officer
    
    2007David Snowden
    
    65
    
    Director
    
    2007Mary S. Schott
    
    48
    
    Director
    
    2009Steven Healy
    
    48
    
    Director
    
    2007
 Biographical Information
 Ki Nam,
 Kelly J. Anderson,
 Jason Kim
 David Snowden
 Mary S. Schott
 32




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##### Table of Contents



Steven Healy
 Family Relationships
  Involvement in Certain Legal Proceedings
  (a)
    
    Has had a petition under the federal bankruptcy laws or any state
insolvency law filed by or against, or a receiver, fiscal agent or
similar officer was appointed by a court for the business or property
of such person, or any partnership in which he was a general partner
at or within two years before the time of such filing, or any
corporation or business association of which he was an executive
officer at or within two years before the time of such filing;(b)
    
    Been convicted in a criminal proceeding or is a named subject of a
pending criminal proceeding (excluding traffic violations and other
minor offenses);(c)
    
    Been the subject of any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining him from, or
otherwise limiting, the following activities:
 i.
    
    Acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker,
leverage transaction merchant, any other person regulated by the
Commodity Futures Trading Commission, or an associated person of any
of the foregoing, or as an investment adviser, underwriter, broker or
dealer in securities, or as an affiliated person, director or employee
of any investment company, bank, savings and loan association or
insurance company, or engaging in or continuing any conduct or
practice in connection with such activity;ii.
    
    Engaging in any type of business practice; oriii.
    
    Engaging in any activity in connection with the purchase or sale
of any security or commodity or in connection with any violation of
federal or state securities laws or federal commodities laws;
 (d)
    
    Been the subject of any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any federal or state authority
barring, suspending or otherwise limiting for more than 60 days the
right of such person to engage in any activity described in paragraph
I(i) above, or to be associated with persons engaged in any such
activity;(e)
    
    Been found by a court of competent jurisdiction in a civil action or
by the Commission to have violated any federal or state securities
law, and the judgment in such civil action or finding by the
Commission has not been subsequently reversed, suspended, or vacated;
or(f)
    
    Been found by a court of competent jurisdiction in a civil action or
by the Commodity Futures Trading Commission to have violated any
federal commodities law, and the judgment in such civil action or
finding by the Commodity Futures Trading Commission has not been
subsequently reversed, suspended or vacated.
 Compliance with Section 16(a) of the Exchange Act
  33




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##### Table of Contents



Code of Ethics
 
 Material Changes to the Procedures by which Security Holders May Recommend Nominees to the Board of
Directors
  Audit Committee; Audit Committee Financial Expert
  
 ITEM 11. EXECUTIVE COMPENSATION
 Compensation Discussion and Analysis
  Compensation Committee
 Committee Members and Independence
  Role of the Compensation Committee in Establishing Compensation
 
 Executive Compensation Program
 
 
    
    attract and retain talented senior management to ensure our future success; and
    
    structure a compensation program that appropriately rewards our executive
officers for their skills and contributions to our company based on
competitive market practice.
  34




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##### Table of Contents




    
    Base salary;
    
    Annual incentive compensation (discretionary bonuses);
    
    Equity-based awards;
    
    Perquisites; and
    
    Other benefits.
 Base Salary.
 Annual Incentive Compensation.
 Equity Compensation.
  
   Perquisites.
 Other Benefits.
 35




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##### Table of Contents



Executive Compensation
  Executive Compensation  Summary Compensation Table:
 Stock
    
    
    Option
    
    
    All OtherSalary
    
    
    Bonus
    
    
    Awards
    
    
    Awards
    
    
    Compensation
    
    
    TotalName and Principal Position
    
    Year
    
    
    ($)(1)
    
    
    ($)(1)
    
    
    ($)
    
    
    ($)(2)
    
    
    ($)(3)
    
    
    ($)Ki Nam,
    
    
    2008
    
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    240,263
    
    
    
    
    
    
    
    390,263Chief Executive Officer
    
    
    2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    426,667
    
    
    
    37,000
    
    
    
    463,667and Chairman (4)
    
    
    2006
    (5)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,690
    
    
    
    24,690Kelly J. Anderson,
    
    
    2008
    
    
    
    131,923
    
    
    
    
    
    
    
    
    
    
    
    45,142
    
    
    
    
    
    
    
    177,065Executive Vice President,
Chief Financial Officer(6)Jason Kim
    
    
    2008
    
    
    
    166,076
    
    
    
    
    
    
    
    
    
    
    
    237,804
    
    
    
    
    
    
    
    403,880Chief Operations Officer
    
    
    2007
    
    
    
    156,025
    
    
    
    
    
    
    
    
    
    
    
    346,354
    
    
    
    
    
    
    
    502,3792006
    (5)
    
    
    61,346
    
    
    
    2,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    63,346Neil Brooker,
    
    
    2008
    
    
    
    136,200
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    136,200Chief Designer (7)
    
    
    2007
    
    
    
    189,269
    
    
    
    
    
    
    
    
    
    
    
    84,444
    
    
    
    9,000
    
    
    
    282,7132006
    (5)
    
    
    135,192
    
    
    
    500
    
    
    
    
    
    
    
    
    
    
    
    6,577
    
    
    
    142,269Kenneth Cao,
    
    
    2008
    
    
    
    117,503
    
    
    
    
    
    
    
    
    
    
    
    52,053
    
    
    
    
    
    
    
    169,556VP Engineering
    
    
    2007
    
    
    
    128,213
    
    
    
    
    
    
    
    
    
    
    
    84,444
    
    
    
    
    
    
    
    212,6572006
    (5)
    
    
    87,896
    
    
    
    2,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    89,896Brian Buccella,
    
    
    2008
    
    
    
    130,743
    
    
    
    
    
    
    
    
    
    
    
    123,075
    
    
    
    
    
    
    
    253,818VP Sales
    
    
    2007
    
    
    
    112,219
    
    
    
    
    
    
    
    
    
    
    
    210,122
    
    
    
    
    
    
    
    322,3412006
    (5)
    
    
    73,077
    
    
    
    3,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    76,077
 
 (1)
    
    Salary and bonuses for fiscal year 2006 for all employees, including our named executive officers, were paid from My Ventures, LLC, a corporation owned by our majority shareholder and Chief
Executive Officer, Ki Nam. We reimbursed My Ventures for these payments monthly as they occurred.(2)
    
    The amounts shown in this column represent the dollar amount recognized for financial statement reporting purposes for the years ended December 31, 2008 and 2007 with respect to stock options
granted, as determined pursuant to SFAS 123(R). See Note 10 to the audited consolidated financial statements included in this annual report for a discussion of the relevant assumptions used in
calculating grant date fair value pursuant to SFAS 123(R).(3)
    
    Perquisites and other personal benefits are valued at actual amounts paid to each provider of such perquisites and other personal benefits. The compensation earned represents the automobile
allowance.(4)
    
    Prior to January 1, 2008, Mr. Nam did not draw a salary.(5)
    
    The compensation information provided for 2006 represents the period from March 16, 2006 (date of inception) through December 31, 2006.(6)
    
    Ms. Anderson was hired on March 17, 2008, and prior to her tenure, Mr. Kim was acting as CFO.(7)
    
    Mr. Brooker resigned on August 1, 2008, effective August 15, 2008. 36




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##### Table of Contents



Employment Agreements
  Plan-Based Awards
 
 All OtherStock
    
    All OtherAwards:
    
    Option
    
    ExerciseEstimated Future Payouts
    
    Estimated Future Payouts
    
    Number
    
    Awards:
    
    or Base
    
    Grant DateUnder Non-Equity Incentive
    
    Under Equity Incentive
    
    of Shares
    
    Number of
    
    Price of
    
    Fair ValuePlan Awards
    
    Plan Awards
    
    of Stock
    
    Securities
    
    Option
    
    of OptionThreshold
    
    Target
    
    Maximum
    
    Threshold
    
    Target
    
    Maximum
    
    or Units
    
    Underlying
    
    Awards
    
    AwardsName
    
    Grant Date
    
    ($)
    
    ($)
    
    ($)
    
    (#)
    
    (#)
    
    (#)
    
    (#)
    
    Options (#)
    
    ($/Sh)
    
    ($/Sh)(2)Ki Nam
    
    
    12/10/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,000,000
    
    
    $
    0.77
    
    
    $
    960,000Kelly J. Anderson(1)
    
    
    3/17/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200,000
    
    
    $
    0.60
    
    
    $
    190,00011/13/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200,000
    
    
    $
    1.40
    
    
    $
    261,000Jason Kim
    
    
    12/10/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,000,000
    
    
    $
    0.60
    
    
    $
    950,000Neil Brooker(3)
    
    
    12/10/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200,000
    
    
    $
    0.60
    
    
    $
    190,000Brian Buccella
    
    
    12/10/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    500,000
    
    
    $
    0.60
    
    
    $
    475,00011/13/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100,000
    
    
    $
    1.40
    
    
    $
    130,000Ken Cao
    
    
    12/10/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200,000
    
    
    $
    0.60
    
    
    $
    190,00011/13/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100,000
    
    
    $
    1.40
    
    
    $
    130,000
 
 (1)
    
    Ms. Anderson commenced employment on March 17,
2008, and prior to her employment, Mr. Kim was the acting CFO.(2)
    
    The grant date fair value is the value of awards granted in 2008 and 2007 as determined in accordance
with FAS 123(R), which is recognized for financial reporting purposes, over the service period of the
awards.(3)
    
    Mr. Brooker resigned on August 1, 2008, effective August 15, 2008.  OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
 Option Awards

  
    Stock AwardsEquityIncentiveEquity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Equity
    
    Plan Awards:Incentive Plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Incentive
    
    Market orAwards:
    
    
    
    
    
    
    
    
    
    
    
    
    
    Market
    
    Plan Awards:
    
    Payout ValueNumber of
    
    Number of
    
    Number of
    
    
    
    
    
    
    
    
    
    Number
    
    Value of
    
    Number of
    
    of UnearnedSecurities
    
    Securities
    
    Securities
    
    
    
    
    
    
    
    
    
    of Shares
    
    Shares or
    
    Unearned
    
    Shares, UnitsUnderlying
    
    Underlying
    
    Underlying
    
    
    
    
    
    
    
    
    
    or Units of
    
    Units of
    
    Shares, Units
    
    or OtherUnexercised
    
    Unexercised
    
    Unexercised
    
    Option
    
    Option
    
    Stock that
    
    Stock that
    
    or Other
    
    Rights thatOptions (#)
    
    Options (#)
    
    Unearned
    
    Exercise
    
    Expiration
    
    Have Not
    
    Have Not
    
    Rights that
    
    Have NotName
    
    Exercisable
    
    Unexercisable
    
    Options (#)
    
    Price ($)
    
    Date
    
    Vested (#)
    
    Vested ($)
    
    Have Not Vested (#)
    
    Vested ($)Ki Nam
    
    
    687,500
    
    
    
    
    
    
    
    312,500
    
    
    
    0.77
    
    
    
    12/10/2017Kelly J. Anderson(1)
    
    
    
    
    
    
    
    
    
    
    200,000
    
    
    
    0.60
    
    
    
    3/17/2018200,000
    
    
    
    1.40
    
    
    
    11/13/2018Jason Kim
    
    
    604,167
    
    
    
    
    
    
    
    395,833
    
    
    
    0.60
    
    
    
    12/10/2017Neil Brooker(2)
    
    
    116,667
    
    
    
    
    
    
    
   
    
    
    
    0.60
    
    
    
    2/10/2018
 
 (1)
    
    Ms. Anderson commenced employment on March 17,
2008, and prior to employment, Mr. Kim was the acting CFO.(2)
    
    Mr. Brooker resigned on August 1, 2008, effective August 15, 2008. Option Exercises and Stock Vested
 
 Option Exercises and Stock VestedOption Awards
    
    Stock AwardsNumber of Shares
    
    
    
    
    
    Number of SharesAcquired
    
    Value Realized
    
    Acquired
    
    Value Realizedon Exercise
    
    on Exercise
    
    on Vesting
    
    on VestingName
    
    (#)
    
    ($)
    
    (#)
    
    ($)Ki Nam
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    Kelly J. Anderson(1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Jason Kim
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Neil Brooker(2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Brian Buccella
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ken Cao
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    Ms. Anderson commenced employment on March 17,
2008, and prior to her employment, Mr. Kim was the  acting CFO.(2)
    
    Mr. Brooker resigned on August 1, 2008, effective August 15, 2008. 37




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##### Table of Contents



Director Compensation
 
 Change inNon-
    
    
    PensionEquity
    
    
    Value andIncentive
    
    
    NonqualifiedFees Earned
    
    
    
    
    
    
    
    
    
    
    Plan
    
    
    Deferredor Paid in
    
    
    Stock
    
    
    
    
    
    
    Compen-
    
    
    Compensation
    
    
    All OtherCash
    
    
    Awards
    
    
    Options
    
    
    sation
    
    
    Earnings
    
    
    Compensation
    
    
    TotalName
    
    ($)
    
    
    ($)
    
    
    ($)(2)
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)Ki Nam
    
    
    
    
    
    
    
    
    
    
    
    (1)
    
    
    
    
    
    
    
    
    
    
    
    (1)
    
    
    David Snowden
    
    
    20,000
    
    
    
    
    
    
    
    11,949
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,949Steven Healy
    
    
    20,000
    
    
    
    
    
    
    
    11,916
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,916
 
 (1)
    
    Mr. Nam compensation as a director is reflected in the table titled Summary Compensation Table above.(2)
    
    The amounts shown in this column represent the dollar amount recognized for financial statement
reporting purposes for the years ended December 31, 2008 with respect to stock options granted, as
determined pursuant to SFAS 123(R). See Note 10 to the audited consolidated financial statements
included in this annual report for a discussion of the relevant assumptions used in calculating grant
date fair value pursuant to SFAS 123(R). 
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
 Securities Authorized for Issuance under Equity Compensation Plans or Individual Compensation
Arrangements
  Security Ownership of Certain Beneficial Owners and Management
   38




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##### Table of Contents



Number of Shares of
    
    Percent of Shares ofCommon Stock
    
    Common StockName of Beneficial Owner and Address
    
    Beneficially Owned(1)
    
    Beneficially Owned(2)Executive Officers and/or Directors:Ki Nam, Chairman and Chief Executive Officer
    
    
    29,684,397
    (3)
    
    
    65.6
    %(3)Kelly J. Anderson, Chief Financial Officer
    
    
    
    
    
    
    Jason Kim, Chief Operations Officer
    
    
    645,833
    
    
    
    1.4
    (4)Steven Healy, Director
    
    
    20,833
    
    
    
    0.1
    %(5)David
Snowden, Director
    
    
    25,000
    
    
    
    0.1
    %(6)Mary Schott,
Director
    
    
    
    
    
    
    5% Security Holders:Immersive Media Corp.
    
    
    2,549,491
    
    
    
    5.6
    %(7)Choon Sun Cho
    
    
    2,298,851
    
    
    
    5.2
    %Vision Opportunity Master Fund, Ltd.
    
    
    8,458,874
    
    
    
    17.2
    %(8)All Executive Officers and Directors as a Group (9 persons)
    
    
    30,376,063
    
    
    
    66.1
    %(9)
 
 (1)
    
    Under Rule 13d-3, a beneficial owner of a security includes any person
who, directly or indirectly, through any contract, arrangement,
understanding, relationship, or otherwise has or shares: (i) voting
power, which includes the power to vote, or to direct the voting of
shares; and (ii) investment power, which includes the power to dispose
or direct the disposition of shares. Certain shares may be deemed to
be beneficially owned by more than one person (if, for example,
persons share the power to vote or the power to dispose of the
shares). In addition, shares are deemed to be beneficially owned by a
person if the person has the right to acquire the shares (for example,
upon exercise of an option) within 60 days of the date as of which the
information is provided. In computing the percentage ownership of any
person, the amount of shares outstanding is deemed to include the
amount of shares beneficially owned by such person (and only such
person) by reason of these acquisition rights. As a result, the
percentage of outstanding shares of any person as shown in this table
does not necessarily reflect the persons actual ownership or voting
power with respect to the number of shares of common stock actually
outstanding.(2)
    
    As of March 15, 2009, there were 44,563,460 common shares issued and outstanding.(3)
    
    This number includes 27,155,230 shares of common stock held by The Nam
Family Trust Dated 02/17/07, Ki Nam and Yeong Hee Nam as Trustees.
This number also includes 900,000 shares of common stock held by
Justin Nam, who is the son of this stockholder. Further, this number
includes 900,000 shares of common stock held by Michelle Nam, who is
the daughter of this stockholder. These include 729,167 shares subject
to an option to purchase common stock. Thus, the percentage of common
stock beneficially owned by Mr. Nam is based on a total of
45,292,627 shares of common stock.(4)
    
    This number includes options to purchase 645,833 shares of common
stock held by Mr. Kim. Thus, the percentage of common stock
beneficially owned by Mr. Kim is based on a total of 45,209,293 shares
of common stock.(5)
    
    This number includes options to purchase 20,833 shares of
common stock held by Mr. Healy. Thus the  percentage of common stock
beneficially owned by Mr. Healy is based on a total of 44,584,293
shares of common stock.(6)
    
    This number includes options to purchase 25,000 shares of
common stock held by Mr. Snowden. Thus the percentage of common stock
beneficially owned by Mr. Snowden is based on a total of 44,588,460
shares of common stock.(7)
    
    This number includes warrants to purchase 697,639 shares of common
stock held by Immersive Media Corp. Thus, the percentage of common
stock beneficially owned by Immersive Media Corp. is based on a total
of 45,261,099 shares of common stock. The address for Immersive Media
Corp. is Immersive Media Corp. is 224  15th Avenue SW, Calgary, AB
T2R 0P7 Canada.(8)
    
    This number includes warrants to purchase 3,896,103 and 666,666 shares
of common stock held by Vision Opportunity Master Fund. Thus, the
percentage of common stock beneficially owned by Vision Opportunity
Master Fund is 49,126,230. The address for Vision Opportunity Master
Fund is 20 West 55th Street, Fifth Floor, New York, New York, 10019.(9)
    
    This number includes options to purchase 1,420,833 shares of common
stock held by the executive officers and directors. Thus, the
percentage of common stock beneficially owned by the executive
officers and directors is based on a total of 45,984,293 shares of
common stock. 
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
 Transactions with Related Parties
  Notes
    
    
    Relatedreceivable/
    
    
    party
    
    
    Notesadvances
    
    
    payables
    
    
    Payable2006 ActivityBorrowings
    
    $
    300,000
    
    
    $
    2,756,549
    
    
    $
    Interest accrued on balance of payables
    
    
    
    
    
    
    34,195
    
    
    
    Fixed asset contribution
    
    
    
    
    
    
    276,471
    
    
    
    Payments
    
    
    
    
    
    
    (384,500
    )
    
    
    Conversion to equity
    
    
    
    
    
    
    (994,000
    )
    
    
    Balance at December 31, 2006
    
    
    300,000
    
    
    
    1,688,715
    
    
    
    Borrowings
    
    
    2,024,563
    
    
    
    4,174,205
    
    
    
    2,000,000Interest accrued on balance of payables
    
    
    
    
    
    
    62,573
    
    
    
    Payments
    
    
    (2,300,000
    )
    
    
    (3,562,224
    )
    
    
    Discount on debt
    
    
    
    
    
    
    
    
    
    
    (485,897
    )Conversion to equity
    
    
    
    
    
    
    (1,673,279
    )
    
    
    Balance at December 31, 2007
    
    
    24,563
    
    
    
    689,990
    
    
    
    1,514,103Borrowings
    
    
    11,685
    
    
    
    715,000
    
    
    
    2,200,000Payments
    
    
    (3,000
    )
    
    
    (999,762
    )
    
    
    (1,000,000
    )Sooner agreement
    
    
    
    
    
    
    1,536,206Correction
of prior year related-party conversion of debt to equity
    
    
    
    
    
    
    93,300
    
    
    
    Amortization of discount on debt
    
    
    
    
    
    
    
    
    
    
    488,133Discount on debt
    
    
    
    
    
    
    
    
    
    
    (1,215,638
    )Balance at December 31, 2008
    
    $
    33,248
    
    
    $
    2,034,734
    
    
    $
    1,986,598
 39




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##### Table of Contents



Accounts Receivable
   Prepaid Expenses
  Notes Receivable
  Related Party Payables
        Fixed Assets
  Intangible Asset
  40




---



##### Table of Contents



Notes Payable
 Immersive Note
    Debtors Accounting for a Modification or Exchange of Debt Instruments
 Vision Opportunity Master Fund, Ltd. Bridge Financing
 th
   41




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##### Table of Contents



Share-Based Payment
 Accounting for Derivative Instruments and Hedging Activities Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a
Companys Own Stock Accounting for Convertible Securities with
Beneficial Conversion Features or Contingently Adjustable Conversion Ratios Application of Issue No. 98-5 to Certain Convertible Instruments.
 Equity
  Director Independence
 
 
 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
  Years Ended December 312008
    
    2007Audit Fees
    
    $
    221,180
    
    
    $
    106,500Audit Related Fees
    
    
    
    
    
    
    1,000Tax Fees
    
    
    2,800
    
    
    
    2,126All Other Fees
    
    
    
    
    
    
    600Total
    
    $
    223,980
    
    
    $
    110,226
 
 (1)
    
    Audit Fees This category includes the audit of our annual financial
statements and registration statement filed on Form S-1, review of
financial statements included in our Quarterly Reports on Form 10-Q,
and services that are normally provided by independent auditors in
connection with the engagement for fiscal years.(2)
    
    Audit-Related Fees This category consists of fees reasonably related
to the performance of the audit or review of our financial statements
that are not reported as Audit Fees. 42




---



##### Table of Contents



(3)
    
    Tax Fees This category consists of tax compliance, tax advice and tax planning work.(4)
    
    All Other Fees This category consists of fees for other miscellaneous items. Pre-Approval Policies and Procedures of the Audit Committee
 
 
 
 PART IV
 
 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
 Financial Statements
  Exhibits
 INDEX TO EXHIBITS
 ExhibitNumber
    
    Description3.1
    
    Amended and Restated Certificate of Incorporation, as currently in effect (1)3.2
    
    Bylaws (1)3.3
    
    Amendment to Bylaws, dated January 16, 2009 (5)10.1
    
    Standard Industrial/Commercial Multi-Tenant Lease between Land Associates Trust, E.C. Alsenz, Trustee and T3
Motion, Inc., for 2990 Airway Avenue, Costa Mesa, CA 92626, dated February 14, 2007 (1)10.2
    
    Rent Adjustment, Standard Lease Addendum between Land Associates Trust, E.C. Alsenz, Trustee and T3 Motion,
Inc., for 2990 Airway Avenue, Costa Mesa, CA 92626, dated February 14, 2007 (1)10.3
    
    Option to Extend, Standard Lease Addendum between Land Associates Trust, E.C. Alsenz, Trustee and T3 Motion,
Inc., for 2990 Airway Avenue, Costa Mesa, CA 92626, dated February 14, 2007 (1)10.4
    
    Addendum to the Air Standard Industrial/Commercial Multi-Tenant Lease between Land Associates Trust, E.C.
Alsenz, Trustee and T3 Motion, Inc., for 2990 Airway Avenue, Costa Mesa, CA 92626, dated February 14, 2007 (1)10.5
    
    Standard Sublease Agreement between Delta Motors, LLC and T3 Motion, Inc. for 2975 Airway Avenue, Costa Mesa,
CA 92626, dated November 1, 2006 (1)10.6
    
    Form of Distribution Agreement (1)10.7
    
    Director Agreement between David L. Snowden and T3 Motion, Inc., dated February 28, 2007 (1)10.8
    
    Director Agreement between Steven J. Healy and T3 Motion, Inc., dated July 1, 2007 (1)
 43




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##### Table of Contents



ExhibitNumber
    
    Description10.9
    
    Director Indemnification Agreement between Steven J. Healy and T3 Motion, Inc., dated July 1, 2007 (1)10.10
    
    Securities Purchase Agreement between T3 Motion, Inc. and Immersive Media Corp., dated December 31, 2007 (1)10.11
    
    Promissory Note issued to Immersive Media Corp., dated December 31, 2007 (1)10.12
    
    Common Stock Purchase Warrant issued to Immersive Media Corp., dated December 31, 2007 (1)10.13
    
    Investor Rights Agreement between T3 Motion, Inc. and Immersive Media Corp., dated December 31, 2007 (1)10.14
    
    Securities Purchase Agreement between T3 Motion, Inc. and certain Purchasers, dated March 28, 2008 (1)10.15
    
    Registration Rights Agreement between T3 Motion, Inc. and certain Purchasers, dated March 28, 2008 (1)10.16
    
    Series A Common Stock Purchase Warrant issued to Vision Opportunity Master Fund, Ltd., dated March 28, 2008 (1)10.17
    
    Series B Common Stock Purchase Warrant issued to Vision Opportunity Master Fund, Ltd., dated March 28, 2008 (1)10.18
    
    Series C Common Stock Purchase Warrant issued to Vision Opportunity Master Fund, Ltd., dated March 28, 2008 (1)10.19
    
    GeoImmersive Image Data & Software Licensing Agreement dated July 9, 2008 (2)10.20
    
    Amendment to Promissory Note dated as of December 19, 2008 (3)10.21
    
    Securities Purchase Agreement, dated December 30, 2008 (4)10.22
    
    Form of 10% Secured Convertible Debenture (4)10.23
    
    Form of Series D Common Stock Purchase Warrant (4)10.24
    
    Subsidiary Guarantee, dated December 30, 2008 (4)10.25
    
    Security Agreement, dated December 30, 2008 (4)10.26
    
    Form of Lock-up Agreement, dated December 30, 2008 (4)10.27
    
    Director Offer Letter to Mary S. Schott from Registrant, dated January 16, 2009 (5)10.28
    
    Distribution Agreement, dated November 24, 2008 by and between the Registrant and CT&T*10.29
    
    Settlement Agreement dated as of February 20, 2009 by and between the Registrant on the one hand, and Sooner Cap, Albert Lin and Maddog Executive Services on the other.*10.30
    
    Distribution Agreement dated as of March 20, 2009 by and between the Registrant and Spear International, Ltd.(6)10.31
    
    Amendment to GeoImmersive Image Data and Software License Agreement by and between the Registrant and Immersive Media dated as of March 16, 2009.*10.32
    
    Securities Purchase Agreement dated as of March 31, 2009 by and between the Registrant and Ki Nam.*10.33
    
    Form of Convertible Promissory Note granted to Ki Nam.*10.34
    
    Form of Warrant granted to Ki Nam.*10.35
    
    Amendment to Debenture, Warrant and Securities Purchase Agreement.*21.1
    
    List of Subsidiaries (1)31.1
    
    Section 302 Certificate of Chief Executive Officer *31.2
    
    Section 302 Certificate of Chief Financial Officer *32.1
    
    Section 906 Certificate of Chief Executive Officer *32.2
    
    Section 906 Certificate of Chief Financial Officer *
 
 *
    
    Filed herewith.(1)
    
    Filed with the Companys Registration Statement on Form S-1 filed on May 13, 2008.(2)
    
    Filed with the Companys Amendment No. 1 to the Registration Statement on Form S-1 filed on July 14, 2008.(3)
    
    Filed with the Companys Current Report on Form 8-K filed on December 31, 2008.(4)
    
    Filed with the Companys Current Report on Form 8-K filed on January 12, 2009.(5)
    
    Filed with the Companys Current Report on Form 8-K filed on January 20, 2009.(6)
    
    Filed with the Companys Current Report on Form 8-K filed on March 26, 2009 44




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##### Table of Contents



T3 MOTION, INC.
FINANCIAL INFORMATION TABLE OF CONTENTS
 PageAUDITED CONSOLIDATED FINANCIAL STATEMENTSReport of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Balance Sheets as of December 31, 2008 and 2007
    
    
    F-3Consolidated Statements of Operations and Other Comprehensive Loss
    
    
    F-4for the years ended December 31, 2008
and 2007 and period from March 16, 2006 (date of inception)
through December 31, 2006Consolidated Statements of Changes in Stockholders (Deficit) Equity
    
    
    F-5for the years ended December 31, 2008 and
2007 and the period from March 16, 2006 (date of inception)
through December 31, 2006Consolidated Statements of Cash Flows for the years ended
    
    
    F-6 - F-7December 31, 2008 and 2007 and the period from March 16,
2006 (date of inception) through December 31, 2006Notes to Consolidated Financial Statements
    
    
    F-8 - F-24
 F-1




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 
 
 F-2




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##### Table of Contents



T3 MOTION, INC.
 
 CONSOLIDATED BALANCE SHEETS
 December 31,2008
    
    
    2007AssetsCurrent assets:Cash and cash equivalents
    
    $
    1,682,741
    
    
    $
    4,932,272Accounts receivable, net of reserves of $27,000 and $30,000, respectively
    
    
    1,447,004
    
    
    
    342,185Related party receivable
    
    
    33,248
    
    
    
    24,563Inventories
    
    
    1,814,469
    
    
    
    1,219,094Prepaid expenses and other current assets
    
    
    612,795
    
    
    
    59,467Total current assets
    
    
    5,590,257
    
    
    
    6,577,581Property and equipment, net
    
    
    1,197,170
    
    
    
    1,005,863Intangible asset, net
    
    
    625,000
    
    
    
    Deposits
    
    
    491,761
    
    
    
    44,782Total assets
    
    $
    7,904,188
    
    
    $
    7,628,226Liabilities and Stockholders EquityCurrent liabilities:Accounts payable
    
    $
    2,381,487
    
    
    $
    1,105,649Accrued expenses
    
    
    785,494
    
    
    
    627,237Related party payables
    
    
    2,034,734
    
    
    
    689,990Related party note payable, net of debt discount
    
    
    986,598
    
    
    
    1,514,103Total current liabilities
    
    
    6,188,313
    
    
    
    3,936,979Long-term liabilities:Related party note payable
    
    
    1,000,000
    
    
    
    Total liabilities
    
    
    7,188,313
    
    
    
    3,936,979Commitments and contingenciesStockholders equity:Common
stock, $0.001 par value; 100,000,000 shares authorized; 43,592,428 and 39,131,685 shares issued and outstanding, respectively
    
    
    43,593
    
    
    
    39,132Additional paid-in capital
    
    
    25,043,452
    
    
    
    15,730,922Accumulated deficit
    
    
    (24,375,827
    )
    
    
    (12,078,030
    )Accumulated other comprehensive income (loss):Foreign currency translation adjustments
    
    
    4,657
    
    
    
    (777
    )Total stockholders equity
    
    
    715,875
    
    
    
    3,691,247Total liabilities and stockholders equity
    
    $
    7,904,188
    
    
    $
    7,628,226
 See accompanying notes to consolidated financial statements
 F-3




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##### Table of Contents



T3 MOTION, INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE LOSS
 For the PeriodFrom March16, 2006(Inception)Years Ended
    
    ThroughDecember 31,
    
    December 31,2008
    
    
    2007
    
    
    2006Revenues
    
    $
    7,589,265
    
    
    $
    1,822,269
    
    
    $
    Cost of revenues
    
    
    9,292,876
    
    
    
    3,928,525
    
    
    
    Gross loss
    
    
    (1,703,611
    )
    
    
    (2,106,256
    )
    
    
    Operating expenses:Sales and marketing
    
    
    2,290,253
    
    
    
    1,724,779
    
    
    
    Research and development
    
    
    1,376,226
    
    
    
    1,243,430
    
    
    
    1,251,169General and administrative
    
    
    6,250,632
    
    
    
    3,454,496
    
    
    
    2,215,460Total operating expenses
    
    
    9,917,111
    
    
    
    6,422,705
    
    
    
    3,466,629Loss from operations
    
    
    (11,620,722
    )
    
    
    (8,528,961
    )
    
    
    (3,466,629
    )Other income (expense):Interest income
    
    
    55,091
    
    
    
    3,239
    
    
    
    826Other (expense) income
    
    
    (73,783
    )
    
    
    12,426
    
    
    
    Interest expense
    
    
    (657,583
    )
    
    
    (63,136
    )
    
    
    (34,195
    )Total other expense, net
    
    
    (676,275
    )
    
    
    (47,471
    )
    
    
    (33,369
    )Loss before provision for income taxes
    
    
    (12,296,997
    )
    
    
    (8,576,432
    )
    
    
    (3,499,998
    )Provision for income taxes
    
    
    800
    
    
    
    800
    
    
    
    800Net loss
    
    
    (12,297,797
    )
    
    
    (8,577,232
    )
    
    
    (3,500,798
    )Other comprehensive loss:Foreign currency translation income (loss)
    
    
    5,434
    
    
    
    (777
    )
    
    
    Comprehensive loss
    
    $
    (12,292,363
    )
    
    $
    (8,578,009
    )
    
    $
    (3,500,798
    )Net loss per share:Basic
    
    $
    (0.29
    )
    
    $
    (0.24
    )
    
    $
    (0.12
    )Diluted
    
    $
    (0.29
    )
    
    $
    (0.24
    )
    
    $
    (0.12
    )Weighted average common shares outstanding:Basic
    
    
    42,387,549
    
    
    
    35,223,795
    
    
    
    30,126,980Diluted
    
    
    42,387,549
    
    
    
    35,223,795
    
    
    
    30,126,980
 See accompanying notes to consolidated financial statements
 F-4




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##### Table of Contents



T3 MOTION, INC.
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS (DEFICIT) EQUITY
 OtherComprehensiveCommon
    
    
    
    
    
    
    Additional
    
    
    Income
    
    
    Accumulated
    
    
    StockholdersStock Shares
    
    
    Amount
    
    
    Paid-in Capital
    
    
    (Loss)
    
    
    Deficit
    
    
    (Deficit) EquityBalance, March 16, 2006 (Date of Inception)
    
    
    30,000,000
    
    
    $
    30,000
    
    
    $
    (29,000
    )
    
    $
    
    
    
    $
    
    
    
    $
    1,000Issuance of common stock for notes
receivable
    
    
    909,090
    
    
    
    909
    
    
    
    299,091
    
    
    
    
    
    
    
    
    
    
    
    300,000Capital contributed by the majority
stockholder
    
    
    
    
    
    
    
    
    
    
    1,000,000
    
    
    
    
    
    
    
    
    
    
    
    1,000,000Converstion of related-party debt for
shares of common stock
    
    
    3,012,122
    
    
    
    3,012
    
    
    
    990,988
    
    
    
    
    
    
    
    
    
    
    
    994,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,500,798
    )
    
    
    (3,500,798
    )Balance, December 31, 2006
    
    
    33,921,212
    
    
    
    33,921
    
    
    
    2,261,079
    
    
    
    
    
    
    
    (3,500,798
    )
    
    
    (1,205,798
    )Issuance of common stock for cash, net
of issuance costs of $210,000
    
    
    2,911,622
    
    
    
    2,912
    
    
    
    3,385,088
    
    
    
    
    
    
    
    
    
    
    
    3,388,000Issuance of common stock for a note
receivable
    
    
    2,298,851
    
    
    
    2,299
    
    
    
    1,997,701
    
    
    
    
    
    
    
    
    
    
    
    2,000,000Capital contributed by the majority
stockholder
    
    
    
    
    
    
    
    
    
    
    4,000,000
    
    
    
    
    
    
    
    
    
    
    
    4,000,000Conversion of related-party debt to equity
    
    
    
    
    
    
    
    
    
    
    1,673,279
    
    
    
    
    
    
    
    
    
    
    
    1,673,279Value of warrants issued with debt
    
    
    
    
    
    
    
    
    
    
    485,897
    
    
    
    
    
    
    
    
    
    
    
    485,897Share-based compensation expense
    
    
    
    
    
    
    
    
    
    
    1,927,878
    
    
    
    
    
    
    
    
    
    
    
    1,927,878Foreign currency translation loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (777
    )
    
    
    
    
    
    
    (777
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,577,232
    )
    
    
    (8,577,232
    )Balance, December 31, 2007
    
    
    39,131,685
    
    
    
    39,132
    
    
    
    15,730,922
    
    
    
    (777
    )
    
    
    (12,078,030
    )
    
    
    3,691,247Issuance of common stock for cash, net
of issuance costs of $240,240
    
    
    4,420,743
    
    
    
    4,421
    
    
    
    6,664,742
    
    
    
    
    
    
    
    
    
    
    
    6,669,163Foreign currency translation income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,434
    
    
    
    
    
    
    
    5,434Issuance of common stock for outside
services
    
    
    40,000
    
    
    
    40
    
    
    
    79,960
    
    
    
    
    
    
    
    
    
    
    
    80,000Value of warrants issued with debt
    
    
    
    
    
    
    
    
    
    
    1,215,638
    
    
    
    
    
    
    
    
    
    
    
    1,215,638Value of debt issuance costs
    
    
    
    
    
    
    
    
    
    
    79,000
    
    
    
    
    
    
    
    
    
    
    
    79,000Correction of prior year related-party conversion
of debt to equity
    
    
    
    
    
    
    
    
    
    
    (93,300
    )
    
    
    
    
    
    
    
    
    
    
    (93,300
    )Share-based compensation expense
    
    
    
    
    
    
    
    
    
    
    1,366,490
    
    
    
    
    
    
    
    
    
    
    
    1,366,490Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,297,797
    )
    
    
    (12,297,797
    )Balance, December 31, 2008
    
    
    43,592,428
    
    
    
    43,593
    
    
    $
    25,043,452
    
    
    $
    4,657
    
    
    $
    (24,375,827
    )
    
    $
    715,875
 See accompanying notes to consolidated financial statements
 F-5




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##### Table of Contents



T3 MOTION, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 For thePeriodFromMarch 16,2006(Inception)Years Ended
    
    
    ThroughDecember 31,
    
    
    December2008
    
    
    2007
    
    
    31, 2006Cash flows from operating activities:Net loss
    
    $
    (12,297,797
    )
    
    $
    (8,577,232
    )
    
    $
    (3,500,798
    )Adjustments to reconcile net loss to net cash used in
operating activities:Bad debt expense
    
    
    3,000
    
    
    
    30,000
    
    
    
    Depreciation and amortization
    
    
    720,206
    
    
    
    191,736
    
    
    
    51,178Loss on disposal of property and equipment
    
    
    74,516
    
    
    
    
    
    
    
    Warranty expense
    
    
    417,857
    
    
    
    410,795
    
    
    
    Share based compensation expense
    
    
    1,366,490
    
    
    
    1,927,878
    
    
    
    Investor relations expense
    
    
    1,406,206Amortization of debt discount
    
    
    488,133
    
    
    
    
    
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    (1,107,819
    )
    
    
    (372,185
    )
    
    
    Inventories
    
    
    (595,375
    )
    
    
    (929,387
    )
    
    
    (289,707
    )Prepaid expenses and other current assets
    
    
    (474,328
    )
    
    
    19,345
    
    
    
    (78,812
    )Security deposits
    
    
    (2,925
    )
    
    
    (44,782
    )
    
    
    Accounts payable and accrued liabilities
    
    
    1,226,238
    
    
    
    688,606
    
    
    
    633,485Net cash used in operating activities
    
    
    (8,775,598
    )
    
    
    (6,655,226
    )
    
    
    (3,184,654
    )Cash flows from investing activities:Loans/advances to related parties
    
    
    (11,685
    )
    
    
    (24,563
    )
    
    
    Deposits on fixed assets
    
    
    (444,054
    )
    
    
    
    
    
    
    Purchases of property and equipment
    
    
    (619,929
    )
    
    
    (756,304
    )
    
    
    (216,002
    )Repayment of loans/advances to related parties
    
    
    3,000
    
    
    
    
    
    
    
    Purchase of data license from related party
    
    
    (1,000,000
    )
    
    
    
    
    
    
    Proceeds from the sale of property and equipment
    
    
    8,900
    
    
    
    
    
    
    
    Net cash used in investing activities
    
    
    (2,063,768
    )
    
    
    (780,867
    )
    
    
    (216,002
    )Cash flows from financing activities:Notes payable from related parties
    
    
    2,200,000
    
    
    
    2,000,000
    
    
    
    Loans/advances from related parties
    
    
    715,000
    
    
    
    4,236,778
    
    
    
    2,790,744Payment of loans from related parties
    
    
    (1,999,762
    )
    
    
    (3,562,224
    )
    
    
    (384,500
    )Proceeds from related party note receivable
    
    
    
    
    
    
    2,300,000
    
    
    
    Proceeds from the sale of common stock and
contributions from stockholder
    
    
    6,669,163
    
    
    
    7,388,000
    
    
    
    1,001,000Net cash provided by financing activities
    
    
    7,584,401
    
    
    
    12,362,554
    
    
    
    3,407,244Effect of exchange rates on cash
    
    
    5,434
    
    
    
    (777
    )
    
    
    Net (decrease) increase in cash and cash equivalents
    
    
    (3,249,531
    )
    
    
    4,925,684
    
    
    
    6,588Cash and cash equivalents, beginning of year
    
    
    4,932,272
    
    
    
    6,588
    
    
    
    Cash and cash equivalents, end of year
    
    $
    1,682,741
    
    
    $
    4,932,272
    
    
    $
    6,588
 See accompanying notes to consolidated financial statements
 F-6




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##### Table of Contents



T3 MOTION, INC.
 CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
 For thePeriodFromMarch 16,2006(Inception)Years Ended
    
    
    ThroughDecember 31,
    
    
    December2008
    
    
    2007
    
    
    31, 2006Supplemental disclosure of cash flow information:Interest paid during the period
    
    $
    158,382
    
    
    $
    
    
    
    $
    Income taxes paid during the period
    
    $
    1,600
    
    
    $
    800
    
    
    $
    800Supplemental disclosure of non cash investing
and financing activities:Issuance of common stock for note receivable
    
    $
    
    
    
    $
    2,000,000
    
    
    $
    300,000Conversion of accrued liability to related-party payable
    
    $
    210,000
    
    
    $
    
    
    
    $
    Fair value of stock warrants issued with debt
    
    $
    1,215,638
    
    
    $
    485,897
    
    
    $
    Fair value of loan issuance costs
    
    $
    79,000
    
    
    $
    
    
    
    $
    Transfer of property and equipment from related parties
    
    $
    
    
    
    $
    
    
    
    $
    276,471Conversion of related party debt to equity
    
    $
    (93,300
    )
    
    $
    1,673,279
    
    
    $
    994,000
 See accompanying notes to consolidated financial statements
 F-7




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##### Table of Contents



T3 MOTION, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 2008 and 2007
 NOTE 1  DESCRIPTION OF BUSINESS
 Organization
 Going Concern
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Principles of Consolidation
  Use of Estimates
  Foreign Currency Translation
  Concentrations of Credit Risk
 F-8




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##### Table of Contents



T3 MOTION, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 Cash
  Accounts Receivable
 
 Accounts Payable
  Inventories
  Property and Equipment
  Impairment of Long-Lived Assets
 Accounting for the Impairment or Disposal of Long-Lived Assets
 F-9




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##### Table of Contents



T3 MOTION, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 Fair Value of Financial Instruments
  Revenue Recognition
 Revenue Recognition
    Share Based Compensation
 Share-Based Payment.
 Accounting for Equity
Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling
Goods or Services, Accounting Recognition for Certain Transactions
Involving Equity Instruments Granted to other than Employees.
  Beneficial Conversion Features and Debt Discounts
 Accounting For convertible Securities
with Beneficial Conversion Features or Contingently Adjustable Conversion Ration Application of EITF Issue No. 98-5 To Certain convertible Instruments.
 F-10




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##### Table of Contents



T3 MOTION, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 Income Taxes
 Accounting for Income
Taxes
 Loss Per Share
  Research and Development
  Advertising
  Business Segments
  Recent Accounting Pronouncements
 Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not
Active Fair Value Measurements,
 Determining Whether an Instrument(or an
Embedded Feature) is Indexed to an Entitys Own Stock, The Meaning of
Indexed to a Companys Own Stock, Accounting for Derivative Instruments and Hedging Activities,
 F-11




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##### Table of Contents



T3 MOTION, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 Effective
Date of FASB Statement No. 157 Fair Value Measurements, ,
 Non-controlling Interests in Consolidated Financial Statements,   Business Combinations
 Fair Value Measurements
 NOTE 3  INVENTORIES
  2008
    
    
    2007Raw materials
    
    $
    1,170,278
    
    
    $
    1,033,680Work-in-process
    
    
    540,260
    
    
    
    60,892Finished goods
    
    
    103,931
    
    
    
    124,522$
    1,814,469
    
    
    $
    1,219,094
 F-12




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##### Table of Contents



T3 MOTION, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 NOTE 4  PREPAID EXPENSES AND OTHER CURRENT ASSETS
  2008
    
    
    2007Prepaid inventory
    
    $
    355,720
    
    
    $
    28,240Prepaid expenses and other current assets
    
    
    257,075
    
    
    
    31,227$
    612,795
    
    
    $
    59,467
 NOTE 5  INTANGIBLE ASSETS
    EstimatedUseful Life
    
    
    2008Geolmmersive License Agreement
    
    2 Years
    
    $
    1,000,000Less: Accumulated amortization
    
    
    
    
    
    
    (375,000
    )$
    625,000
 NOTE 6  PROPERTY AND EQUIPMENT
  2008
    
    
    2007Office and computer equipment
    
    $
    290,760
    
    
    $
    150,791Demonstration vehicles
    
    
    368,685
    
    
    
    352,124Manufacturing equipment
    
    
    976,735
    
    
    
    637,197Leasehold improvements
    
    
    113,765
    
    
    
    108,6651,749,945
    
    
    
    1,248,777Less accumulated depreciation
    
    
    (552,775
    )
    
    
    (242,914
    )$
    1,197,170
    
    
    $
    1,005,863
  F-13




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##### Table of Contents



T3 MOTION, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 For the PeriodFrom March 16,2006 (Inception)ThroughFor the Years Ended December 31,
    
    
    December 31,2008
    
    
    2007
    
    
    2006Cost of revenues
    
    $
    176,818
    
    
    $
    119,355
    
    
    $
    General and administrative
    
    
    168,388
    
    
    
    72,381
    
    
    
    51,178$
    345,206
    
    
    $
    191,736
    
    
    $
    51,178
 NOTE 7  INCOME TAXES
  2008
    
    
    2007
    
    
    2006Current:Federal
    
    $
    
    
    
    $
    
    
    
    
    State
    
    
    800
    
    
    
    800
    
    
    
    800Foreign
    
    
    
    
    
    
    
    
    
    
    800
    
    
    
    800
    
    
    
    800Deferred:Federal
    
    
    (3,799,565
    )
    
    
    (2,228,726
    )
    
    
    (1,187,457
    )State
    
    
    (1,108,919
    )
    
    
    (591,164
    )
    
    
    (305,575
    )Foreign
    
    
    (54,227
    )
    
    
    (30,529
    )(4,962,711
    )
    
    
    (2,850,419
    )
    
    
    (1,493,032
    )Less change in valuation allowance
    
    
    4,962,711
    
    
    
    2,850,419
    
    
    
    1,493,032$
    800
    
    
    $
    800
    
    
    
    800
  2008
    
    
    2007
    
    
    2006Taxes calculated at federal rate
    
    $
    (4,183,747
    )
    
    $
    (2,915,987
    )
    
    
    (1,189,999
    )State tax, net of federal benefit
    
    
    528
    
    
    
    528
    
    
    
    528Exclusion of certain meals and entertainment
    
    
    4,033
    
    
    
    1,170
    
    
    
    308Foreign losses  not benefitted
    
    
    61,458
    
    
    
    34,600
    
    
    
    Incentive stock options
    
    
    453,197
    
    
    
    638,725
    
    
    
    Research credits
    
    
    (135,710
    )
    
    
    
    
    
    
    Other, net
    
    
    1,496
    
    
    
    5,428
    
    
    
    2,778Valuation allowance  federal
    
    
    3,799,545
    
    
    
    2,236,336
    
    
    
    1,187,185Net deferred tax asset
    
    $
    800
    
    
    $
    800
    
    
    
    800
 F-14




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##### Table of Contents



T3 MOTION, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
  2008
    
    
    2007Accruals and reserves
    
    $
    227,081
    
    
    $
    202,523Basis difference in fixed assets
    
    
    (102,525
    )
    
    
    (60,426
    )Stock options
    
    
    21,109
    
    
    
    21,109Tax credits
    
    
    278,458
    
    
    
    Net operating loss carryforward
    
    
    8,882,039
    
    
    
    4,180,2459,306,162
    
    
    
    4,343,451Valuation allowance  federal
    
    
    (9,306,162
    )
    
    
    (4,343,451
    )Net deferred tax asset
    
    $
    
    
    
    $
    
    Accounting for Uncertainty
in Income Taxes, Accounting for Income Taxes.
 F-15




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##### Table of Contents



T3 MOTION, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
  Accounting for Uncertainty in
Income Taxes,
  NOTE 8  RELATED PARTY NOTES PAYABLE
  2008
    
    
    2007Note payable to Immersive Media Corp.,
12% interest rate, net of discount of
$0 and $485,897, respectively
    
    $
    1,000,000
    
    
    $
    1,514,103Note payable to Vision Opportunity
Master Fund, Ltd., 10% interest rate,
net of discount of $1,213,402 and $0,
respectively
    
    
    986,598
    
    
    
    $
    1,986,598
    
    
    $
    1,514,103
  NotesYear
    
    payable2009
    
    $
    2,200,0002010
    
    $
    1,000,000
 Immersive Note
    F-16




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##### Table of Contents



T3 MOTION, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
  Debtors Accounting for a Modification or Exchange of Debt Instruments
 Vision Opportunity Master Fund, Ltd. Bridge Financing
 th
  Share-Based Payment
 Accounting for Derivative Instruments and Hedging Activities, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a
Companys Own Stock, Accounting for Convertible Securities with
Beneficial Conversion Features or Contingently Adjustable Conversion
Ratios Application of Issue No. 98-5 to
Certain Convertible Instruments.
 F-17




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##### Table of Contents



T3 MOTION, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
  NOTE 9  EQUITY
    th
    NOTE 10- STOCK OPTIONS AND WARRANTS
 Common Stock Options
  F-18




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##### Table of Contents



T3 MOTION, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
  Weighted-Weighted-
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateNumber of
    
    
    Exercise
    
    
    Contractual
    
    
    IntrinsicShares
    
    
    Price
    
    
    Life
    
    
    ValueOptions outstanding-August 15, 2007
    
    
    
    
    
    $
    Options granted
    
    
    5,391,500
    
    
    
    0.63Options exercised
    
    
    
    
    
    
    Options cancelled
    
    
    
    
    
    
    Options outstanding  January 1, 2008
    
    
    5,391,500
    
    
    
    0.63Options granted
    
    
    1,220,000
    
    
    
    1.29Options exercised
    
    
    
    
    
    
    Options forfeited
    
    
    (143,333
    )
    
    
    .60Options cancelled
    
    
    
    
    
    
    Total options outstanding  December 31, 2008
    
    
    6,468,167
    
    
    $
    0.76
    
    
    
    9.08
    
    
    $
    5,781,825Options exercisableDecember 31, 2008
    
    
    3,256,924
    
    
    $
    0.64
    
    
    
    8.94
    
    
    $
    3,302,895Options vested and expected to vestDecember 31, 2008
    
    
    6,358,519
    
    
    $
    0.75
    
    
    
    9.08
    
    
    $
    5,695,729Options available for grant under the Plan at December 31, 2008
    
    
    981,833
  Options Outstanding
    
    Options ExercisableWeighted Average
    
    WeightedRemaining
    
    AverageExercise
    
    
    
    
    
    Contractual
    
    Exercise
    
    
    
    
    
    Weighted AveragePrices
    
    Number of shares
    
    Life
    
    Price
    
    Number of shares
    
    Exercise Price(in years)$ 0.60
    
    
    4,448,167
    
    
    
    9.0
    
    
    $
    0.60
    
    
    
    2,569,424
    
    
    $
    0.60$ 0.77
    
    
    1,000,000
    
    
    
    8.9
    
    
    $
    0.77
    
    
    
    687,500
    
    
    $
    0.77$ 1.40
    
    
    925,000
    
    
    
    9.8
    
    
    $
    1.40
    
    
    
    
    
    
    $ 1.70
    
    
    95,000
    
    
    
    9.7
    
    
    $
    1.70
    
    
    
    
    
    
    6,468,167
    
    
    
    9.1
    
    
    $
    0.76
    
    
    
    3,256,924
    
    
    $
    0.64
 F-19




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##### Table of Contents



T3 MOTION, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 Summary of Assumptions and Activity
   Years Ended December31,2008
    
    
    2007Expected term (in years)
    
    
    6.1
    
    
    
    5.0Expected volatility
    
    
    93%  100
    %
    
    
    114.0
    %Risk-free interest rate
    
    
    2.2%  3.4
    %
    
    
    3.45
    %Expected dividends
    
    
    
    
    
    
    Forfeiture rate
    
    
    2.80
    %
    
    
    2.80
    %Weighted-average grant date fair value per share
    
    $
    1.33
    
    
    $
    0.95
   Warrants
  F-20




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##### Table of Contents



T3 MOTION, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 Weighted-
    
    
    Weighted-AverageExercise
    
    
    Contractual
    
    
    Aggregate IntrinsicNumber of Shares
    
    
    Price
    
    
    Life
    
    
    Value(in years)Warrants outstanding -
January 1, 2007
    
    
    
    
    
    
    Warrants granted
    
    
    697,639
    
    
    $
    1.08Warrants exercised
    
    
    
    
    
    
    Warrants cancelled
    
    
    
    
    
    
    Warrants outstanding -
January 1, 2008
    
    
    697,639
    
    
    
    1.08Warrants granted (See
Notes 8 and 9)
    
    
    4,682,769
    
    
    
    1.54Warrants exercised
    
    
    
    
    
    
    Warrants cancelled
    
    
    
    
    
    
    Warrants outstanding and
exercisableDecember 31,
2008
    
    
    5,380,408
    
    
    $
    1.48
    
    
    
    4.39
    
    
    $
    1,150,416
 NOTE 11  COMMITMENTS AND CONTINGENCIES
 Operating Leases
    YearsEndingDecember 31,
    
    Total2009
    
    
    $     389,0002010
    
    
    299,0002011
    
    
    309,0002012
    
    
    214,000$ 1,211,000
 Indemnities and Guarantees
  F-21




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##### Table of Contents



T3 MOTION, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
  Warranties
     2008
    
    
    2007Beginning balance, January 1,
    
    $
    296,000
    
    
    $
    Charged to cost of revenues
    
    
    417,857
    
    
    
    410,795Usage
    
    
    (351,388
    )
    
    
    (114,795
    )Ending balance, December 31,
    
    $
    362,469
    
    
    $
    296,000
 Legal Contingency
  F-22




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##### Table of Contents



T3 MOTION, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 NOTE 12  RELATED PARTY TRANSACTIONS
  Notes
    
    
    Relatedreceivable/
    
    
    partyadvances
    
    
    payables
    
    
    Notes Payable2006 ActivityBorrowings
    
    $
    300,000
    
    
    $
    2,756,549
    
    
    $
    Interest accrued on balance of payables
    
    
    
    
    
    
    34,195
    
    
    
    Fixed asset contribution
    
    
    
    
    
    
    276,471
    
    
    
    Payments
    
    
    
    
    
    
    (384,500
    )
    
    
    Conversion to equity
    
    
    
    
    
    
    (994,000
    )
    
    
    Balance at December 31, 2006
    
    
    300,000
    
    
    
    1,688,715
    
    
    
    Borrowings
    
    
    2,024,563
    
    
    
    4,174,205
    
    
    
    2,000,000Interest accrued on balance of payables
    
    
    
    
    
    
    62,573
    
    
    
    Payments
    
    
    (2,300,000
    )
    
    
    (3,562,224
    )
    
    
    Discount on debt
    
    
    
    
    
    
    
    
    
    
    (485,897
    )Conversion to equity
    
    
    
    
    
    
    (1,673,279
    )
    
    
    Balance at December 31, 2007
    
    
    24,563
    
    
    
    689,990
    
    
    
    1,514,103Borrowings
    
    
    11,685
    
    
    
    715,000
    
    
    
    2,200,000Payments
    
    
    (3,000
    )
    
    
    (999,762
    )
    
    
    (1,000,000
    )Sooner agreement
    
    
    
    
    
    
    1,536,206
    
    
        Correction of prior year related-party conversion of debt to equity
    
    
    
    
    
    
    93,300
    
    
    
    Amortization of discount on debt
    
    
    
    
    
    
    
    
    
    
    488,133Discount on debt
    
    
    
    
    
    
    
    
    
    
    (1,215,638
    )Balance at December 31, 2008
    
    $
    33,248
    
    
    $
    2,034,734
    
    
    $
    1,986,598
 Accounts Receivable
 
 Prepaid Expenses
 
 Notes Receivable
 
 Related Party Payables
       F-23




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##### Table of Contents



T3 MOTION, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
  Fixed Assets
  Intangible Asset  see Note 5
 Notes Payable  see Note 8   Equity
  NOTE
13  SUBSEQUENT EVENTS
    F-24




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##### Table of Contents



SIGNATURES
  T3 MOTION, INC.Dated: March 31, 2009
    
    By:
    
    /s/ Ki NamKi Nam,President, Chief Executive Officer and Chief Operating Officer
  Name
    
    Position
    
    Date/s/ Ki Nam
    
    Chairman and Chief Executive
Officer (principal executive
officer)
    
    March 31, 2009Ki Nam/s/ Kelly J. Anderson
    
    Director and Chief Financial
Officer (principal financial
officer)
    
    March 31, 2009David Snowden/s/ David Snowden
    
    Director
    
    March 31, 2009Steven
J. Healy/s/
Steven J. Healy
    
    Director
    
    March 31, 2009Mary S. Schott/s/ Mary S. Schott
    
    Director
    
    March 31, 2009
 45




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##### Table of Contents



INDEX TO EXHIBITS
 ExhibitNumber
    
    Description3.1
    
    Amended and Restated Certificate of Incorporation, as currently in effect (1)3.2
    
    Bylaws (1)3.3
    
    Amendment to Bylaws, dated January 16, 2009 (5)10.1
    
    Standard Industrial/Commercial Multi-Tenant Lease between Land Associates Trust, E.C. Alsenz, Trustee and T3
Motion, Inc., for 2990 Airway Avenue, Costa Mesa, CA 92626, dated February 14, 2007 (1)10.2
    
    Rent Adjustment, Standard Lease Addendum between Land Associates Trust, E.C. Alsenz, Trustee and T3 Motion,
Inc., for 2990 Airway Avenue, Costa Mesa, CA 92626, dated February 14, 2007 (1)10.3
    
    Option to Extend, Standard Lease Addendum between Land Associates Trust, E.C. Alsenz, Trustee and T3 Motion,
Inc., for 2990 Airway Avenue, Costa Mesa, CA 92626, dated February 14, 2007 (1)10.4
    
    Addendum to the Air Standard Industrial/Commercial Multi-Tenant Lease between Land Associates Trust, E.C.
Alsenz, Trustee and T3 Motion, Inc., for 2990 Airway Avenue, Costa Mesa, CA 92626, dated February 14, 2007 (1)10.5
    
    Standard Sublease Agreement between Delta Motors, LLC and T3 Motion, Inc. for 2975 Airway Avenue, Costa Mesa,
CA 92626, dated November 1, 2006 (1)10.6
    
    Form of Distribution Agreement (1)10.7
    
    Director Agreement between David L. Snowden and T3 Motion, Inc., dated February 28, 2007 (1)10.8
    
    Director Agreement between Steven J. Healy and T3 Motion, Inc., dated July 1, 2007 (1)10.9
    
    Director Indemnification Agreement between Steven J. Healy and T3 Motion, Inc., dated July 1, 2007 (1)10.10
    
    Securities Purchase Agreement between T3 Motion, Inc. and Immersive Media Corp., dated December 31, 2007 (1)10.11
    
    Promissory Note issued to Immersive Media Corp., dated December 31, 2007 (1)10.12
    
    Common Stock Purchase Warrant issued to Immersive Media Corp., dated December 31, 2007 (1)10.13
    
    Investor Rights Agreement between T3 Motion, Inc. and Immersive Media Corp., dated December 31, 2007 (1)10.14
    
    Securities Purchase Agreement between T3 Motion, Inc. and certain Purchasers, dated March 28, 2008 (1)10.15
    
    Registration Rights Agreement between T3 Motion, Inc. and certain Purchasers, dated March 28, 2008 (1)10.16
    
    Series A Common Stock Purchase Warrant issued to Vision Opportunity Master Fund, Ltd., dated March 28, 2008 (1)10.17
    
    Series B Common Stock Purchase Warrant issued to Vision Opportunity Master Fund, Ltd., dated March 28, 2008 (1)10.18
    
    Series C Common Stock Purchase Warrant issued to Vision Opportunity Master Fund, Ltd., dated March 28, 2008 (1)




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##### Table of Contents



ExhibitNumber
    
    Description10.19
    
    GeoImmersive Image Data & Software Licensing Agreement dated July 9, 2008 (2)10.20
    
    Amendment to Promissory Note dated as of December 19, 2008 (3)10.21
    
    Securities Purchase Agreement, dated December 30, 2008 (4)10.22
    
    Form of 10% Secured Convertible Debenture (4)10.23
    
    Form of Series D Common Stock Purchase Warrant (4)10.24
    
    Subsidiary Guarantee, dated December 30, 2008 (4)10.25
    
    Security Agreement, dated December 30, 2008 (4)10.26
    
    Form of Lock-up Agreement, dated December 30, 2008 (4)10.27
    
    Director Offer Letter to Mary S. Schott from Registrant, dated January 16, 2009 (5)10.28
    
    Distribution Agreement, dated November 24, 2008 by and between the Registrant and CT&T*10.29
    
    Settlement Agreement dated as of February 20, 2009 by and between the Registrant on the one hand, and Sooner Cap, Albert Lin and Maddog Executive Services on the other.*10.30
    
    Distribution Agreement dated as of March 20, 2009 by and between the Registrant and Spear International, Ltd.(6)10.31
    
    Amendment to GeoImmersive Image Data and Software License Agreement by and between the Registrant and Immersive Media dated as of March 16, 2009.*10.32
    
    Securities Purchase Agreement dated as of March 31, 2009 by and between the Registrant and Ki Nam.*10.33
    
    Form of Convertible Promissory Note granted to Ki Nam.*10.34
    
    Form of Warrant granted to Ki Nam.*10.35
    
    Amendment to Debenture, Warrant and Securities Purchase Agreement.*21.1
    
    List of Subsidiaries (1)31.1
    
    Section 302 Certificate of Chief Executive Officer *31.2
    
    Section 302 Certificate of Chief Financial Officer *32.1
    
    Section 906 Certificate of Chief Executive Officer *32.2
    
    Section 906 Certificate of Chief Financial Officer *
 
 *
    
    Filed herewith.(1)
    
    Filed with the Companys Registration Statement on Form S-1 filed on May 13, 2008.(2)
    
    Filed with the Companys Amendment No. 1 to the Registration Statement on Form S-1 filed on July 14, 2008.(3)
    
    Filed with the Companys Current Report on Form 8-K filed on December 31, 2008.(4)
    
    Filed with the Companys Current Report on Form 8-K filed on January 12, 2009.(5)
    
    Filed with the Companys Current Report on Form 8-K filed on January 20, 2009.(6)
    
    Filed with the Companys Current Report on Form 8-K filed on March 26, 2009