##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the Quarterly Period Ended September 30, 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.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    20-4987549(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 2990 Airway Avenue, Suite ACosta Mesa, California
    
    92626(Address of principal executive offices)
    
    (Zip Code)
 (714) 619-3600
(Registrants telephone number, including area code)
 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)
 o þ




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##### 



T3 MOTION, INC.  INDEX TO FORM 10-Q  SEPTEMBER 30, 2008
 PagePART I. FINANCIAL INFORMATION
    
    3Item 1.
    
    Financial Statements
    
    3Condensed Consolidated Balance Sheets as of September 30, 2008 (unaudited) and December 31, 2007
    
    3Condensed Consolidated Statements of Operations and Other Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2008 and 2007 (unaudited)
    
    4Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2008 and 2007 (unaudited)
    
    5Notes to the Condensed Consolidated Financial Statements (unaudited)
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    17Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    22Item 4.
    
    Controls and Procedures
    
    22Item 4T.
    
    Controls and Procedures
    
    22PART II. OTHER INFORMATION
    
    24Item 1.
    
    Legal Proceedings
    
    24Item 1A.
    
    Risk Factors
    
    24Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    25Item 3.
    
    Defaults upon Senior Securities
    
    25Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    25Item 5.
    
    Other Information
    
    25Item 6.
    
    Exhibits
    
    25Signatures
    
    26EX-31.1EX-31.2EX-32.1EX-32.2
  2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 T3
MOTION, INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 September 30,
    
    
    December 31,2008
    
    
    2007(unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    174,839
    
    
    $
    4,932,272Accounts receivable, net
of reserves of $27,000 and $30,000, respectively
    
    
    1,997,970
    
    
    
    342,185Related party receivable
    
    
    28,951
    
    
    
    24,563Inventories
    
    
    2,183,356
    
    
    
    1,219,094Prepaid expenses and
other current assets
    
    
    477,735
    
    
    
    59,467Total current assets
    
    
    4,862,851
    
    
    
    6,577,581Property and equipment, net
    
    
    1,259,684
    
    
    
    1,005,863Intangible assets, net
    
    
    750,000
    
    
    
    Deposits
    
    
    544,232
    
    
    
    44,782Total assets
    
    $
    7,416,767
    
    
    $
    7,628,226LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    2,186,542
    
    
    $
    1,105,649Accrued expenses
    
    
    1,147,015
    
    
    
    627,237Related party payables
    
    
    
    
    
    
    689,990Related party note
payable, net of debt
discount
    
    
    939,264
    
    
    
    1,514,103Total current liabilities
    
    
    4,272,821
    
    
    
    3,936,979Commitments and contingencies
(Note 9)Stockholders equity:Common stock, $0.001 par value; 100,000,000
shares authorized; 43,552,428
and 39,131,685 shares issued and outstanding at
September 30, 2008 and
December 31, 2007, respectively
    
    
    43,553
    
    
    
    39,132Additional paid-in capital
    
    
    23,388,474
    
    
    
    15,730,922Accumulated deficit
    
    
    (20,285,274
    )
    
    
    (12,078,030
    )Accumulated other
comprehensive loss
    
    
    (2,807
    )
    
    
    (777
    )Total stockholders equity
    
    
    3,143,946
    
    
    
    3,691,247Total liabilities and
stockholders equity
    
    $
    7,416,767
    
    
    $
    7,628,226
 See accompanying notes to condensed consolidated financial statements
 3




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T3 MOTION, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
 OTHER COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
 Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenues
    
    $
    2,234,939
    
    
    $
    456,515
    
    
    $
    5,647,734
    
    
    $
    1,308,845Cost of revenues
    
    
    2,475,956
    
    
    
    931,402
    
    
    
    7,046,001
    
    
    
    2,535,605Gross loss
    
    
    (241,017
    )
    
    
    (474,887
    )
    
    
    (1,398,267
    )
    
    
    (1,226,760
    )Operating Expenses:Sales and marketing
    
    
    669,861
    
    
    
    335,557
    
    
    
    1,657,060
    
    
    
    1,074,130Research and development
    
    
    417,875
    
    
    
    349,490
    
    
    
    1,021,894
    
    
    
    713,793General and administrative
    
    
    1,280,829
    
    
    
    575,667
    
    
    
    3,633,825
    
    
    
    1,701,711Total operating expenses
    
    
    2,368,565
    
    
    
    1,260,714
    
    
    
    6,312,779
    
    
    
    3,489,634Loss from operations
    
    
    (2,609,582
    )
    
    
    (1,735,601
    )
    
    
    (7,711,046
    )
    
    
    (4,716,394
    )Other income (expense):Interest income
    
    
    7,144
    
    
    
    280
    
    
    
    54,824
    
    
    
    939Other income (expense)
    
    
    1,506
    
    
    
    4,360
    
    
    
    (31
    )
    
    
    4,360Interest expense
    
    
    (94,251
    )
    
    
    (15,003
    )
    
    
    (550,191
    )
    
    
    (47,898
    )Total other expense, net
    
    
    (85,601
    )
    
    
    (10,363
    )
    
    
    (495,398
    )
    
    
    (42,599
    )Loss before provision for income
tax
    
    
    (2,695,183
    )
    
    
    (1,745,964
    )
    
    
    (8,206,444
    )
    
    
    (4,758,993
    )Provision for income tax
    
    
    
    
    
    
    
    
    
    
    (800
    )
    
    
    (800
    )Net loss
    
    
    (2,695,183
    )
    
    
    (1,745,964
    )
    
    
    (8,207,244
    )
    
    
    (4,759,793
    )Other comprehensive income
(loss):Foreign currency translation
income (loss)
    
    
    (1,236
    )
    
    
    255
    
    
    
    (2,030
    )
    
    
    195Comprehensive loss
    
    $
    (2,696,419
    )
    
    $
    (1,745,709
    )
    
    $
    (8,209,274
    )
    
    $
    (4,759,598
    )Net loss per share:Basic
    
    $
    (0.06
    )
    
    $
    (0.05
    )
    
    $
    (0.20
    )
    
    $
    (0.14
    )Diluted
    
    $
    (0.06
    )
    
    $
    (0.05
    )
    
    $
    (0.20
    )
    
    $
    (0.14
    )Weighted average number of
common shares outstanding:Basic
    
    
    43,443,732
    
    
    
    34,646,150
    
    
    
    41,987,614
    
    
    
    34,510,568Diluted
    
    
    43,443,732
    
    
    
    34,646,150
    
    
    
    41,987,614
    
    
    
    34,510,568
 See accompanying notes to condensed consolidated financial statements
 4




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T3 MOTION, INC.
 
 CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
 Nine Months Ended September 30,2008
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (8,207,244
    )
    
    $
    (4,759,793
    )Adjustments to reconcile net loss to net cash used in operating activities:Bad debt expense
    
    
    3,000
    
    
    
    30,000Warranty expense
    
    
    314,462
    
    
    
    282,855Depreciation and amortization
    
    
    505,098
    
    
    
    119,834Loss on sale of fixed asset
    
    
    1,607
    
    
    
    Stock compensation expense
    
    
    992,810
    
    
    
    Amortization of debt discount
    
    
    425,161
    
    
    
    Change in operating assets and liabilities:Accounts and other receivables, net
    
    
    (1,658,784
    )
    
    
    (315,559
    )Inventories
    
    
    (964,262
    )
    
    
    (754,466
    )Prepaid expenses and other current assets
    
    
    (418,268
    )
    
    
    40,495Deposits
    
    
    (3,146
    )
    
    
    (44,807
    )Accounts payable and accrued expenses
    
    
    1,286,208
    
    
    
    414,581Net cash used in operating activities
    
    
    (7,723,358
    )
    
    
    (4,986,860
    )CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of data license
    
    
    (1,000,000
    )
    
    
    Purchases of property and equipment
    
    
    (512,726
    )
    
    
    (488,005
    )Deposit on fixed assets
    
    
    (496,304
    )
    
    
    Loans/advances to related parties
    
    
    (77,297
    )
    
    
    (56,954
    )Repayment of loans/advances to related parties
    
    
    2,909
    
    
    
    Proceeds from sale of assets
    
    
    2,200
    
    
    
    Net cash used in investing activities
    
    
    (2,081,218
    )
    
    
    (544,959
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from the sale of common stock and contributions from
stockholder, net
    
    
    6,669,163
    
    
    
    4,598,000Payment of loans from related parties
    
    
    (1,819,990
    )
    
    
    (3,540,195
    )Loans/advances from related parties
    
    
    200,000
    
    
    
    4,236,778Proceeds from related party note receivable
    
    
    
    
    
    
    300,000Net cash provided by financing activities
    
    
    5,049,173
    
    
    
    5,594,583Effect of exchange rate on cash
    
    
    (2,030
    )
    
    
    195NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    (4,757,433
    )
    
    
    62,959CASH AND CASH EQUIVALENTS  beginning of period
    
    
    4,932,272
    
    
    
    6,588CASH AND CASH EQUIVALENTS  end of period
    
    $
    174,839
    
    
    $
    69,547
 See accompanying notes to condensed consolidated financial statements
 5




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##### Table of Contents



T3 MOTION, INC.
 CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)  Continued
 Nine Months Ended September 30,2008
    
    
    2007SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:Cash paid during the period for:Interest
    
    $
    66,003
    
    
    $
    1,370Income taxes
    
    $
    1,600
    
    
    $
    SUPPLEMENTAL DISCLOSURE OF NON-CASH
INFORMATION:Issuance of common stock for note receivable
    
    $
    
    
    
    $
    2,000,000
 See accompanying notes to condensed consolidated financial statements
 6




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T3 MOTION, INC.
 
 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 NOTE 1  DESCRIPTION OF BUSINESS
  Public Offering of Equity Securities
  Interim Unaudited Condensed Consolidated Financial Statements
  Going Concern
   7




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T3 MOTION, INC.
 NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)  Continued
 Use of Estimates
  Concentration of Risk
   Revenue Recognition
 Revenue Recognition.
     Intangible Assets
  8




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T3 MOTION, INC.
 NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)  Continued
  Fair Value of Financial Instruments
  Segments
  Recent Accounting Pronouncements
 Fair Value Measurements Effective Date of FASB Statement No. 157
 NOTE 2  INVENTORIES
  September 30,
    
    
    December 31,2008
    
    
    2007(unaudited)Raw materials
    
    $
    1,781,516
    
    
    $
    1,033,680Work-in-process
    
    
    311,580
    
    
    
    60,892Finished goods
    
    
    90,260
    
    
    
    124,522$
    2,183,356
    
    
    $
    1,219,094
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##### Table of Contents



T3 MOTION, INC.
 NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)  Continued
 NOTE 3  PREPAID EXPENSES AND OTHER CURRENT ASSETS
  September 30,
    
    
    December 31,2008
    
    
    2007(unaudited)Prepaid inventory
    
    $
    308,001
    
    
    $
    28,240Prepaid expenses and
other current assets
    
    
    169,734
    
    
    
    31,227$
    477,735
    
    
    $
    59,467
 NOTE 4  INTANGIBLE ASSETS
   Estimated
    
    
    September 30,
    
    
    December 31,Useful Life
    
    
    2008
    
    
    2007(unaudited)Geolmmersive License Agreement
    
    2 Years
    
    $
    1,000,000
    
    
    $
    Less: Accumulated amortization
    
    
    
    
    
    
    (250,000
    )
    
    
    $
    750,000
    
    
    $
    
 NOTE 5  INCOME TAXES
  10




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T3 MOTION, INC.
 NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)  Continued
   Accounting for Uncertainty in
Income Taxes,
  NOTE 6  LOSS PER SHARE
  NOTE 7  EQUITY
   11




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T3 MOTION, INC.
 NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)  Continued
  NOTE 8  STOCK OPTIONS AND WARRANTS
 Common Stock Options
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Stock compensation expense 
cost of revenue
    
    $
    36,572
    
    
    $
    
    
    
    $
    109,801
    
    
    $
    Stock compensation expense 
sales and marketing
    
    
    75,933
    
    
    
    
    
    
    
    217,795
    
    
    
    Stock compensation expense 
research and development
    
    
    23,699
    
    
    
    
    
    
    
    74,704
    
    
    
    Stock compensation expense 
general and administrative
    
    
    194,970
    
    
    
    
    
    
    
    590,510
    
    
    
    Total stock compensation expense
    
    $
    331,174
    
    
    $
    
    
    
    $
    992,810
    
    
    $
    
  12




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##### Table of Contents



T3 MOTION, INC.
 NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)  Continued
 Weighted AverageNumber of
    
    
    Weighted Average
    
    
    Remaining Contractual
    
    
    AggregateShares
    
    
    Exercise Price
    
    
    Life (in years)
    
    
    Intrinsic ValueOptions outstanding as of
January 1, 2008
    
    
    5,391,500
    
    
    $
    0.63Options granted
    
    
    445,000
    
    
    $
    1.09Options exercisedOptions forfeited
    
    
    (143,333
    )
    
    $
    0.60Options cancelledOptions outstanding as of
September 30, 2008
    
    
    5,693,167
    
    
    $
    0.67
    
    
    
    9.23
    
    
    $
    7,581,934Options exercisable as of
September 30, 2008
    
    
    3,035,191
    
    
    $
    0.64
    
    
    
    9.19
    
    
    $
    4,139,476Options vested and expected to
vest as of September 30, 2008
    
    
    5,561,758
    
    
    $
    0.67
    
    
    
    9.26
    
    
    $
    7,404,080Options available for grant
under the Plan as of September
30, 2008
    
    1,756,833
  Options Outstanding
    
    
    Options ExercisableWeighted AverageExercise
    
    Number of
    
    
    Remaining Contractual
    
    
    Weighted Average
    
    
    Number of
    
    
    Weighted AveragePrices
    
    Shares
    
    
    Life (in years)
    
    
    Exercise Price
    
    
    Shares
    
    
    Exercise Price$
    0.60
    
    
    4,448,167
    
    
    
    9.2
    
    
    $
    0.60
    
    
    
    2,389,358
    
    
    $
    0.60$
    0.77
    
    
    1,000,000
    
    
    
    9.2
    
    
    $
    0.77
    
    
    
    645,833
    
    
    $
    0.77$
    1.40
    
    
    170,000
    
    
    
    9.7
    
    
    $
    1.40
    
    
    
    
    
    
    $
    $
    1.70
    
    
    75,000
    
    
    
    9.9
    
    
    $
    1.70
    
    
    
    
    
    
    $
    5,693,167
    
    
    
    
    
    
    $
    0.67
    
    
    
    3,035,191
    
    
    $
    0.64
  13




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T3 MOTION, INC.
 NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)  Continued
  Warrants
  Weighted AverageNumber of
    
    
    Weighted Average
    
    
    Remaining Contractual
    
    
    AggregateShares
    
    
    Exercise Price
    
    
    Life (in years)
    
    
    Intrinsic ValueWarrants outstanding as of
January 1, 2008
    
    
    697,639
    
    
    $
    1.08Warrants granted
    
    
    4,016,103
    
    
    
    1.61Warrants exercisedWarrants forfeitedWarrants cancelledWarrants outstanding and
exercisable as of September 30,
2008
    
    4,713,742
    
    
    $
    1.53
    
    
    
    4.53
    
    
    $
    1,891,135
 NOTE 9  COMMITMENTS AND CONTINGENCIES
 Warranties
    14




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T3 MOTION, INC.
 NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)  Continued
  Beginning balance, January 1, 2008
    
    $
    296,000Charged to cost of revenues
    
    
    314,462Usage
    
    
    (235,871
    )Ending balance, September 30, 2008
    
    $
    374,591
 Indemnities and Guarantees
  NOTE 10  RELATED PARTY TRANSACTIONS
     15




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T3 MOTION, INC.
 NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)  Continued
   NOTE 11- SUBSEQUENT EVENTS
   16




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 This quarterly report on Form 10-Q 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,
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.
Management undertakes no obligation to update any forward-looking statements. This cautionary
statement is applicable to all forward-looking statements contained in this report. Readers should
carefully review the risks described in other documents we file from time to time with the
Securities and Exchange Commission (SEC), including the amended Registration Statement on Form
S-1 filed on August 6, 2008 and declared effective by the SEC on August 12, 2008.
 OVERVIEW
   CRITICAL ACCOUNTING POLICIES AND ESTIMATES
  17




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Going Concern
   Concentration of Risk
   Intangible Assets
  Loss Per Share
  Commitments and Contingencies
  18




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Recent Accounting Pronouncements
 Fair Value Measurements. Effective Date of FASB Statement No. 157
 Business Segments
  RESULTS OF OPERATIONS
 Three and Nine Months Ended September 30, 2008 and 2007
  19




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Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenues
    
    $
    2,234,939
    
    
    $
    456,515
    
    
    $
    5,647,734
    
    
    $
    1,308,845Cost of revenues
    
    
    2,475,956
    
    
    
    931,402
    
    
    
    7,046,001
    
    
    
    2,535,605Gross loss
    
    
    (241,017
    )
    
    
    (474,887
    )
    
    
    (1,398,267
    )
    
    
    (1,226,760
    )Operating Expenses:Sales and marketing
    
    
    669,861
    
    
    
    335,557
    
    
    
    1,657,060
    
    
    
    1,074,130Research and development
    
    
    417,875
    
    
    
    349,490
    
    
    
    1,021,894
    
    
    
    713,793General and administrative
    
    
    1,280,829
    
    
    
    575,667
    
    
    
    3,633,825
    
    
    
    1,701,711Total operating expenses
    
    
    2,368,565
    
    
    
    1,260,714
    
    
    
    6,312,779
    
    
    
    3,489,634Loss from operations
    
    
    (2,609,582
    )
    
    
    (1,735,601
    )
    
    
    (7,711,046
    )
    
    
    (4,716,394
    )Other income (expense):Interest income
    
    
    7,144
    
    
    
    280
    
    
    
    54,824
    
    
    
    939Other income (expense)
    
    
    1,506
    
    
    
    4,360
    
    
    
    (31
    )
    
    
    4,360Interest expense
    
    
    (94,251
    )
    
    
    (15,003
    )
    
    
    (550,191
    )
    
    
    (47,898
    )Total other expense, net
    
    
    (85,601
    )
    
    
    (10,363
    )
    
    
    (495,398
    )
    
    
    (42,599
    )Loss before provision for
income tax
    
    
    (2,695,183
    )
    
    
    (1,745,964
    )
    
    
    (8,206,444
    )
    
    
    (4,758,993
    )Provision for income tax
    
    
    
    
    
    
    
    
    
    
    (800
    )
    
    
    (800
    )Net loss
    
    
    (2,695,183
    )
    
    
    (1,745,964
    )
    
    
    (8,207,244
    )
    
    
    (4,759,793
    )Other comprehensive loss:Foreign currency translation
income (loss)
    
    
    (1,236
    )
    
    
    255
    
    
    
    (2,030
    )
    
    
    195Comprehensive loss
    
    $
    (2,696,419
    )
    
    $
    (1,745,709
    )
    
    $
    (8,209,274
    )
    
    $
    (4,759,598
    )Net loss per share:Basic and diluted
    
    $
    (0.06
    )
    
    $
    (0.05
    )
    
    $
    (0.20
    )
    
    $
    (0.14
    )Weighted average number of
common shares outstanding:Basic and diluted
    
    
    43,443,732
    
    
    
    34,646,150
    
    
    
    41,987,614
    
    
    
    34,510,568
 Revenues.
 20




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##### Table of Contents



Cost of revenues.
 Gross loss.
 Sales and marketing expense.
 Research and development.
 General and administrative.
 Total other expense
 Net Loss.
 LIQUIDITY AND CAPITAL RESOURCES
  21




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##### Table of Contents



Cash Flows
 For the Nine Months Ended September 30, 2008 and 2007
    
 Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  Interest Rates
 
 Item 4. Controls and Procedures.
  
 Item 4T. Controls and Procedures.
  22




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23




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Remediation of Material Weaknesses
  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 are in the process of converting our accounting software platform to a platform that
has inherent controls to assist with the increase of controls and reviews.
  
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 1A. Risk Factors.
  If we are unable to continue as a going concern, our securities will have little or no value.
  24




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##### Table of Contents



Further deteriorating economic conditions will have a material adverse effect on our operations
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
 None
 
 Item 3. Defaults Upon Senior Securities.
 None
 
 Item 4. Submission of Matters to a Vote of Security Holders.
 None
 
 Item 5. Other Information.
 None
 
 Item 6. Exhibits.
 3.1
    
    Amended and Restated Certificate of Incorporation, as currently in effect (incorporated by
reference to Exhibit 3.1 to Registration Statement onForm S-1filed July 14, 2008, Registration
No. 333-150888)3.2
    
    Bylaws of the registrant, as currently in effect (incorporated by reference to Exhibit 3.2 to
Registration Statement onForm S-1filed July 14, 2008, Registration No. 333-150888)
 25




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##### Table of Contents



31.1
    
    Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *31.2
    
    Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *32.1
    
    Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002*32.2
    
    Certification of Chief Financial Officer Pursuant to 18 U.S. C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002*
 
 *
    
    Filed herewith. 
   Date: November 14, 2008
    T3 MOTION, INC.(Registrant)By:
    /s/ Ki NamKi NamChairman of the Board and Chief Executive OfficerDate: November 14, 2008
    T3 MOTION, INC.(Registrant)By:
    /s/ Kelly AndersonKelly AndersonExecutive Vice President and Chief Financial Officer 26




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Exhibit No.
    
    Description3.1
    
    Amended and Restated Certificate of Incorporation, as
currently in effect (incorporated by reference to Exhibit 3.1
to Registration Statement on Form S-1 filed July 14, 2008,
Registration No. 333-150888)3.2
    
    Bylaws of the registrant, as currently in effect (incorporated
by reference to Exhibit 3.2 to Registration Statement on Form
S-1 filed July 14, 2008, Registration No. 333-150888)31.1
    
    Certification of Chief Executive Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002 *31.2
    
    Certification of Chief Financial Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002 *32.1
    
    Certification of Chief Executive Officer Pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002*32.2
    
    Certification of Chief Financial Officer Pursuant to 18 U.S.
C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002*
 
 *
    
    Filed herewith. 27