<SUBMISSION>
<ACCESSION-NUMBER>0000950153-06-000083
<TYPE>10-Q/A
<PUBLIC-DOCUMENT-COUNT>6
<PERIOD>20050331
<FILING-DATE>20060113
<DATE-OF-FILING-DATE-CHANGE>20060113
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>TASER INTERNATIONAL INC
<CIK>0001069183
<ASSIGNED-SIC>3480
<IRS-NUMBER>860741227
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q/A
<ACT>34
<FILE-NUMBER>001-16391
<FILM-NUMBER>06530552
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>7860 EAST MCLAIN DR.
<STREET2>SUITE 2
<CITY>SCOTTSDALE
<STATE>AZ
<ZIP>85260
<PHONE>4809052000
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>7860 EAST MCLAIN DR.
<STREET2>SUITE 2
<CITY>SCOTTSDALE
<STATE>AZ
<ZIP>85260
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10-Q/A
<SEQUENCE>1
<FILENAME>p71599e10vqza.htm
<DESCRIPTION>10-Q/A
<TEXT>
<HTML>
<HEAD>
<TITLE>e10vqza</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<P align="center" style="font-size: 14pt"><B>United States<BR>
Securities and Exchange Commission</B>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="center" style="font-size: 18pt"><B>Form&nbsp;10-Q/A</B>
<DIV align="left"><FONT size="1">

</FONT></DIV>


<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center" style="font-size: 10pt">(Amendment No. 1)
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>


<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="90%" style="font-size: 12pt">
<TR>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="95%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD><FONT face="Wingdings">&#254;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><B>QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934</B></TD>
</TR>
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">For the quarterly period ended March&nbsp;31, 2005



<P align="center" style="font-size: 10pt">or


<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="90%" style="font-size: 12pt">
<TR>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="95%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><B>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934</B></TD>
</TR>
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">For the transition period from&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to



<P align="center" style="font-size: 10pt">Commission File Number 001-16391


<P align="center" style="font-size: 24pt"><B>TASER INTERNATIONAL, INC.</B>


<DIV align="center" style="font-size: 10pt">(Exact name of registrant as specified in its charter)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>DELAWARE</B><BR>
(State or other jurisdiction<BR>
of incorporation or organization)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>86-0741227</B><BR>
(I.R.S. Employer<BR>
Identification Number)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>17800 N. 85<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> St., SCOTTSDALE, ARIZONA</B><BR>
(Address of principal executive offices)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>85255</B><BR>
(Zip Code)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><B>(480)&nbsp;991-0797</B><BR>
(Registrant&#146;s telephone number, including area code)


<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>


<P align="left" style="font-size: 10pt">Indicate by check mark whether the registrant (1)&nbsp;has filed all reports required to be filed by
Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12&nbsp;months (or for
such shorter period that the registrant was required to file such reports), and (2)&nbsp;has been
subject to such filing requirements for the past 90&nbsp;days. Yes
<FONT face="Wingdings">&#254;</FONT> No <FONT face="Wingdings">&#111;</FONT>



<P align="left" style="font-size: 10pt">Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule&nbsp;12b-2 of
the Exchange Act). Yes <FONT face="Wingdings">&#111;</FONT> No <FONT face="Wingdings">&#254;</FONT>


<P align="left" style="font-size: 10pt">There were 61,326,664 shares of the issuer&#146;s common stock, par value $0.00001 per share,
outstanding as of May&nbsp;16, 2005.



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>TASER INTERNATIONAL, INC.<BR>
QUARTERLY REPORT ON FORM 10-Q<BR>
FOR THE THREE MONTHS ENDED MARCH 31, 2005</B>



<P align="center" style="font-size: 10pt"><B>TABLE OF CONTENTS</B>



<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="90%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Page</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#101">PART I &#151; FINANCIAL INFORMATION</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#102">ITEM
1. Financial Statements (unaudited)</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#103">Balance
sheets as of March&nbsp;31, 2005 (as restated) and December&nbsp;31, 2004</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#104">Statements of income for the three months ended March&nbsp;31, 2005 (as restated) and 2004</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#105">Statements of cash flows for the three months ended March&nbsp;31, 2005 (as restated) and 2004</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#106">Notes to financial statements</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#107">ITEM 2. Management&#146;s Discussion and Analysis of Financial Condition and Results of Operation</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#108">ITEM 4. Controls and Procedures</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#109">PART II &#151; OTHER INFORMATION</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#110">ITEM 1. Legal Proceedings</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#111">ITEM 6. Exhibits</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#112">SIGNATURES</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#113">INDEX TO EXHIBITS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="p71599exv31w1.htm">EX-31.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="p71599exv31w2.htm">EX-31.2</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="p71599exv32w1.htm">EX-32.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="p71599exv32w2.htm">EX-32.2</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="p71599exv99w1.htm">EX-99.1</A></FONT></TD></TR>
</TABLE>
</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>EXPLANATORY NOTE</B></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">
This Amendment No. 1 to the Quarterly Report on Form 10-Q of TASER International, Inc. for
the quarter ended March&nbsp;31, 2005 is being filed to reflect a restatement of our financial statements for
the quarter ended March 31, 2005 included in our Quarterly Report on Form 10-Q filed on May 23,
2005 (the &#147;Original Report&#148;). The purpose of the restatement is to correct an error in those
financial statements which resulted from the incorrect accrual of legal and professional fees
and other expenses for that period. Beginning in the first quarter of 2005, we experienced a
significant increase in outside legal and other professional expenses. We determined that
our internal controls surrounding the recording of legal and professional fees in the appropriate accounting
period were not operating effectively. Certain of the invoices relating to the work performed were not
received by our accounting department until after we had closed our books and reported our financial results
for such periods due to delays on the part of third parties in delivering or communicating such invoices to
us. As a result, certain invoices were recorded in the incorrect
period. Correction of these errors resulted in the shifting of expenses among the first three quarters of 2005 with expenses increasing
in the first quarter of 2005 and decreasing in the second quarter of 2005 from the figures included
in the previously filed Form 10-Qs. There was a corresponding decrease/increase in net income for
the first and second quarters resulting from the change in expenses.
The restatement had no impact
on revenues for the periods.  See Note 14 included in &#147;Item 1.
Financial Statements&#148; and &#147;Item 4.
Controls and Procedures&#148; included in this Form 10-Q for additional information regarding the restatement.
References herein to the Form 10-Q refer to our Original Report, as amended by this Amendment No. 1.
</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Except for matters related to the aforementioned
restatement and for changes to financial statement footnotes&nbsp;1, 4, 7 and 12 made in
connection with the material weakness described in Item&nbsp;4 of
this Form&nbsp;10-Q regarding our resources in accounting and
financial statement preparation, this Amendment No. 1 does not modify or update other disclosures in the Original Report, including
the nature and character of such disclosure to reflect events occurring after the filing date of the Original Report.
While we are amending only certain portions of our Form 10-Q, for convenience and ease of reference, we are filing
the entire Form 10-Q. Accordingly, this Form 10-Q should be read in conjunction with our filings made with the
Securities and Exchange Commission subsequent to the Original Report.
</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>


<DIV align="left">
<!-- /TOC -->
</DIV>



<P align="center" style="font-size: 10pt">2
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="101"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>PART I &#151; FINANCIAL INFORMATION</B>


<DIV align="left">
<A name="102"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 1. FINANCIAL STATEMENTS</B>


<DIV align="left">
<A name="103"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>TASER INTERNATIONAL, INC.<BR>
BALANCE SHEETS </B><BR>
<B>March&nbsp;31, 2005 and December&nbsp;31, 2004</B><BR>
(UNAUDITED)


<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="80%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>March 31, 2005</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>December 31, 2004</B></TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

<TD nowrap align="left" colspan="6" style="border-bottom: 0px solid #000000">(As
restated <BR>see Note 14)</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD align="center"><DIV style="margin-left:15px; text-indent:-15px"><B>Assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current Assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash and cash equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$&nbsp;</TD>
    <TD align="right">18,439,045</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">14,757,159</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Short-term investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,044,760</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,201,477</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accounts receivable, net </DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,759,096</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,460,112</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Inventory</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,911,768</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,840,051</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Prepaids and other assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,599,066</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,639,734</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income tax receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">52,973</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">52,973</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current deferred income tax asset</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,694,864</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,083,422</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total Current Assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44,501,572</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60,034,928</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-term investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,555,325</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,071,815</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Property and Equipment, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,554,581</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,756,512</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred income tax asset</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,880,473</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,310,207</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Intangible
assets, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,286,146</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,279,116</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total Assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$&nbsp;</TD>
    <TD align="right">109,778,097</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">109,452,578</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center"><DIV style="margin-left:15px; text-indent:-15px"><B>Liabilities and Stockholders&#146; Equity</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current Liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current portion of capital lease obligations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$&nbsp;</TD>
    <TD align="right">1,870</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,642</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accounts payable and accrued liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,681,643</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,827,132</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Customer deposits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">149,812</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">102,165</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total Current Liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,833,325</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,933,939</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred Revenue</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">620,715</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">607,856</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total Liabilities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,454,040</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,541,795</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Commitments and Contingencies</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stockholders&#146; Equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Preferred Stock, $0.00001 par value per share; 25&nbsp;million shares authorized; 0 shares
issued and outstanding at March&nbsp;31, 2005 and December&nbsp;31, 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Common Stock, $0.00001 par value per share; 200&nbsp;million shares authorized;
61,304,677 and 60,992,156 shares issued and outstanding at March&nbsp;31, 2005 and
December&nbsp;31, 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">613</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">609</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Additional Paid-in Capital</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">77,302,995</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">75,850,810</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Retained Earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,020,449</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,059,364</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total Stockholders&#146; Equity</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">101,324,057</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">99,910,783</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total Liabilities and Stockholders&#146; Equity</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$&nbsp;</TD>
    <TD align="right">109,778,097</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">109,452,578</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left" style="font-size: 10pt">The accompanying notes are an integral part of these financial statements.



<P align="center" style="font-size: 10pt">3
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="104"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>TASER INTERNATIONAL, INC.<BR>
STATEMENTS OF INCOME<BR>
For the three months ended March&nbsp;31, 2005 and 2004</B><BR>
(UNAUDITED)


<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="80%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>For the Three Months Ended</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>March 31, 2005</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>March 31, 2004</B></TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

<TD nowrap align="LEFT" colspan="6" style="border-bottom: 0px solid #000000">(As
restated <BR>see Note 14)</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->

<TR valign="bottom">
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net Sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">10,204,161</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">13,136,553</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cost of Products Sold:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Direct manufacturing expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,110,206</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,172,522</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Indirect manufacturing expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,417,819</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,359,979</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total Cost of Products Sold</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,528,025</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,532,501</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gross Margin</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,676,136</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,604,052</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sales, general and administrative expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,590,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,569,288</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Research and development expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">347,363</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">267,095</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">(Loss) Income from Operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">(261,327</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,767,669</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">198,875</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,005</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(88</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(932</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other income (expense), net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(375</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">297</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">(Loss) income before income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">(62,915</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,807,039</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">(Credit) provision for income tax</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">(24,000</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,256,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net (Loss) Income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">(38,915</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,551,039</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income per common and common equivalent shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.07</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.06</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Weighted average number of common and common equivalent shares outstanding</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">61,101,125</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">52,732,944</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">63,948,784</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60,100,316</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left" style="font-size: 10pt">The accompanying notes are an integral part of these financial statements.



<P align="center" style="font-size: 10pt">4
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="105"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>TASER INTERNATIONAL INC.<BR>
STATEMENTS OF CASH FLOWS<BR>
For the three months ended March&nbsp;31, 2005 and 2004</B><BR>
(UNAUDITED)

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="80%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>For the Three Months Ended</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>March 31, 2005</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>March 31, 2004</B></TD>
    <TD>&nbsp;</TD>
</TR>


<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

<TD nowrap align="Left" colspan="6" style="border-bottom: 0px solid #000000">(As
restated <BR>see Note 14)</TD>
    <TD>&nbsp;</TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash Flows from Operating Activities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net (loss) income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">(38,915</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,551,039</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Adjustments to reconcile net income to net cash provided by operating activities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Depreciation and amortization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">266,777</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">121,700</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Provision for doubtful accounts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,082</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Provision for warranty</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">71,932</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">267,146</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Compensatory stock options </DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">326,159</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(85,556</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">594,554</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stock option tax benefit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">70,072</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,661,446</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Change in assets and liabilities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accounts receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,701,016</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,203,138</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Inventory</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,071,717</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(774,418</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Prepaids and other assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,668</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">62,014</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accounts payable and accrued liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,594,037</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">148,138</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Customer deposits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47,647</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(76,306</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net cash provided by operating activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,407,887</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,718,416</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash Flows from Investing Activities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Purchases of investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">(12,511,725</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds from investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,184,932</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Purchases of property and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,665,590</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(502,884</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Purchases of intangible assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(16,811</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net cash provided by (used in) investing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,990,806</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(502,884</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash Flows from Financing Activities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Payments under capital leases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,772</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6,302</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Payments on notes payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(250,000</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds from warrants exercised</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,242,952</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds from options exercised</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">285,965</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,623,123</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net cash provided by financing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">283,193</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,609,773</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net Increase in Cash and Cash Equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,681,886</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,825,305</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash and Cash Equivalents, beginning of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,757,159</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,878,326</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash and Cash Equivalents, end of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">18,439,045</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24,703,631</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Supplemental Disclosure:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash paid for interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">88</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">918</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non Cash
Transactions&#150;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Increase to
deferred tax asset related to tax benefits, realized from the exercise of stock
options (with a related increase to additional paid in capital of $1,166,224 and $8,880,898)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,096,152</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">7,219,452</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Increase to
property and equipment with a corresponding increase in accounts payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,389,475</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left" style="font-size: 10pt">The accompanying notes are an integral part of these financial statements.



<P align="center" style="font-size: 10pt">5
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="106"></A>
</DIV>
<P align="left" style="font-size: 10pt"><B>TASER INTERNATIONAL, INC.<BR>
NOTES TO FINANCIAL STATEMENTS (unaudited)</B>



<P align="left" style="font-size: 10pt"><B>NOTE 1 &#151; GENERAL</B>


<P align="left" style="font-size: 10pt">The accompanying unaudited financial statements of TASER International, Inc. (the &#147;Company&#148;)
include all adjustments (consisting only of normal recurring accruals) which management considers
necessary for the fair presentation of the Company&#146;s operating results, financial position and cash
flows as of March&nbsp;31, 2005 and March&nbsp;31, 2004. Certain information and note disclosures normally
included in financial statements prepared in accordance with accounting principles generally
accepted in the United States of America (&#147;GAAP&#148;) have been omitted from these unaudited financial
statements.


<P align="left" style="font-size: 10pt">The results of operations for the three month periods are not necessarily indicative of the results
to be expected for the full year (or any other period) and should be read in conjunction with the
financial statements and notes thereto included in the Company&#146;s Annual Report on Form 10-KSB/A as
filed on May 23, 2005.

<P align="left" style="font-size: 10pt">The Company develops and manufactures non-lethal self-defense devices. Our products are often used
in aggressive confrontations that may result in serious, permanent bodily injury or death to those
involved. A person injured in a confrontation or otherwise in connection with the use of our
products may bring legal action against us to recover damages on the basis of theories including
personal injury, wrongful death, negligent design, dangerous product or inadequate warning. We are
currently subject to a number of such lawsuits. We may also be subject to lawsuits involving
allegations of misuse of our products. We have seen and expect to continue to see an increased
number of complaints filed against the Company alleging injuries resulting from the use of a TASER
device. If successful, personal injury, misuse and other claims could have a material adverse
effect on our operating results and financial condition. Although we carry product liability
insurance, significant litigation could also result in a diversion of management&#146;s attention and
resources, negative publicity and an award of monetary damages in excess of our insurance coverage.
The outcome of any litigation is inherently uncertain and there can be no assurance that our
existing or any future litigation will not have a material adverse effect on our revenues, our
financial condition or financial results.

<P align="left" style="font-size: 10pt">Further, since late 2004, as a result of on-going negative press coverage and increased litigation
concerning the Company&#146;s products and their use, the Company has experienced a decline in sales and
profits for the three months ended March&nbsp;31, 2005 compared to the three months ended March&nbsp;31,
2004. In particular, these events have resulted in longer sales cycles and delays in orders from
prospective customers. The Company has also experienced significant increases in selling, general
and administrative expenses for the three months ended March&nbsp;31, 2005 compared to the three months
ended March&nbsp;31, 2004 as additional resources have been devoted to legal, public relations and
consulting activities. The Company&#146;s deferred tax asset includes $26.0&nbsp;million in net operating
loss carryforwards. The amount of the deferred tax asset realizeable could be reduced if future
taxable income is not sufficient to utilize the loss carryforwards before their expiration, as
discussed in Note 7 below.


<P align="left" style="font-size: 10pt"><B>NOTE 2 &#151; NET SALES</B>


<P align="left" style="font-size: 10pt">The components of net sales for the three months ended March&nbsp;31, 2005 and 2004 were as follows
(amounts in thousands):


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="60%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Sales by Product Line</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>March 31, 2005</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>March 31, 2004</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">TASER X26</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,563</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">64</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8,787</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">67</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ADVANCED TASER</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">698</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">7</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,340</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">10</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">AIR TASER</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">57</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Single Cartridges</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,433</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">24</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,846</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">22</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">483</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">5</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">107</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">10,204</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">13,137</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt"><B>NOTE 3 &#151; INTANGIBLE ASSETS</B>


<P align="left" style="font-size: 10pt">The Company values purchased intangible assets at cost less accumulated amortization. Amortization
is calculated using the useful life of the asset acquired. The components of net intangible assets
as of March&nbsp;31, 2005 and December&nbsp;31, 2004 were as follows:


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="70%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Useful Life</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>March 31, 2005</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>December 31, 2004</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">TASER.com Domain Name</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">5 Years</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">60,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">60,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">U.S. Patents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">6.5 to 14 Years</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">128,360</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">128,360</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Patents Pending</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">17 Years</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">248,958</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">232,147</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-Compete Agreement</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">7 Years</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">TASER Trademark</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Indefinite</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">900,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">900,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total Cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,387,318</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,370,507</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Less: Accumulated Amortization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">101,172</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">91,391</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net Intangible Assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,286,146</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,279,116</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<P align="left" style="font-size: 10pt">Estimated amortization
expense for intangible assets with finite lives for the next five years is as follows:


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="90%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2005</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">34,129</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2006</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31,125</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,126</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,126</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,267</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">6
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt"><B>TASER INTERNATIONAL, INC.<BR>
NOTES TO FINANCIAL STATEMENTS (unaudited) &#150; Continued</B>



<P align="left" style="font-size: 10pt"><B>NOTE 4 &#150; INVESTMENT SECURITIES</B>


<P align="left" style="font-size: 10pt">Investment securities are accounted for in accordance with Statement of Financial Accounting
Standards (&#147;SFAS&#148;) No.&nbsp;115, <I>Accounting for Certain Investments in Debt and Equity Securities.</I>
The Company has included its investments in auction rate securities in short term investments,
and has classified them as available-for-sale. At March&nbsp;31, 2005, the Company had $2.0&nbsp;million of
these auction rate securities that were recorded at fair value. The cost of these investments
approximates fair value due to their variable interest rates, which typically reset every 7 to 28
days despite the long-term nature of their stated contractual maturities. The remaining short-term
and long-term investments are invested in governmental debt securities, and are classified as held
to maturity. These investments are recorded at amortized cost, which approximates fair value. The
Company intends to hold these securities until maturity. The short-term investments, other than the
auction rate securities mentioned above, have maturities of less than one year. At March&nbsp;31, 2005,
the Company had $25.6&nbsp;million of long-term investments. All of the long-term investments have
maturities between one and three years. The Company&#146;s cash and investment accounts earned interest
at an approximate rate of 1.6% and 0.8% during the three months ended
March 31, 2005 and 2004, respectively.


<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At March&nbsp;31, 2005, the Company had unrealized losses attributable to its investments which
aggregated approximately $306,000. These unrealized losses have not been recorded as the
investments are held to maturity. None of the investments have been in an unrealized loss position
for more than twelve months.
</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left" style="font-size: 10pt"><B>NOTE 5 &#151;INVENTORIES</B>


<P align="left" style="font-size: 10pt">Inventories are stated at the lower of cost or market. Cost is determined using the most
recent acquisition cost which approximates the first-in, first-out (FIFO)&nbsp;method. Inventories as
of March&nbsp;31, 2005 and December&nbsp;31, 2004 consisted of the following:


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="80%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>March 31, 2005</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>December 31, 2004</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Raw materials and work-in-process</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,327,338</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,198,716</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Finished goods</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,584,430</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,641,335</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total Inventory</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8,911,768</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,840,051</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<P align="left" style="font-size: 10pt"><B>NOTE 6 &#151;EARNINGS PER SHARE</B>


<P align="left" style="font-size: 10pt">The following table reconciles average common shares outstanding &#150; basic, to average common shares
outstanding &#150; diluted, that are used in the calculation of earnings per share.

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="80%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>Earnings Per Share</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>For the Three Months Ended</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>March 31, 2005</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>March 31, 2004</B></TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

<TD nowrap align="LEFT" colspan="6" style="border-bottom: 0px solid #000000">(As
restated <BR>see Note 14)</TD>
    <TD>&nbsp;</TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Numerator for basic and diluted earnings per share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net (Loss) Income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">(38,915</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,551,039</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Denominator for basic earnings per share &#151; weighted average shares outstanding</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">61,101,125</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">52,732,944</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dilutive effect of shares issuable under stock options outstanding</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,847,659</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,367,372</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Denominator for diluted earnings per share &#151; adjusted weighted average shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">63,948,784</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60,100,316</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net Income per common share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.07</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.06</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left" style="font-size: 10pt">For the three months ended
March&nbsp;31, 2005, the effects of 268,494 stock options were
excluded from the calculation of diluted loss per share, as their
effect would have been anti-dilutive and decreased the loss per
share. For the three months ended March&nbsp;31, 2004, there were no
options that would have been anti-dilutive.

<P align="left" style="font-size: 10pt"><B>NOTE 7 &#150; INCOME TAXES</B>



<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The deferred income tax asset at March&nbsp;31, 2005 is comprised primarily of a net operating loss
carryforward, which resulted from the compensation expense the Company recorded, for income tax
purposes, when employees exercised stock options. For the three months ended March&nbsp;31, 2005, the
Company recognized additional tax benefits related to stock option transactions totaling $1,166,224
of which $70,072 was used to offset income taxes otherwise payable and $1,096,152 was recorded as
an increase in the deferred tax asset. For the three months ended March&nbsp;31, 2004, the Company
recognized tax benefits related to these stock transactions totaling $8,880,898 of which $1,661,446
was used to offset federal income taxes otherwise payable, and $7,219,452 was recorded as a
deferred tax asset. The total tax benefit of $1,166,224 was credited to additional paid-in capital
in 2005 and the total tax benefit of $8,880,898 was credited to additional paid-in capital in 2004.
Additionally, warranty and inventory reserves, accrued vacation and other items have contributed to
the deferred income tax asset.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s total current and long term deferred tax asset at March&nbsp;31, 2005 is $27.6&nbsp;million.
SFAS No.&nbsp;109 requires the reduction of deferred tax assets by a valuation allowance if, based on
the weight of all available evidence, it is more likely than not that some or all of the deferred
tax asset may not be realized. The Company has determined that no such valuation allowance is
necessary. The deferred tax asset reflects primarily the benefit of $26.0&nbsp;million in loss
carryforwards. Federal loss carryforwards expire in 2024 and state loss carryforwards expire in
2009. Realization of these loss carryforwards is dependent on the Company&#146;s ability to generate
sufficient taxable income to utilize the loss carryforwards. Although realization is not assured,
management believes that the deferred tax asset will be utilized. However, the amount of the
deferred tax asset realizable could be reduced if future taxable income is not sufficient to
utilize the loss carryforwards before their expiration.
</DIV>


<DIV align="left"><FONT size="1">

</FONT></DIV>


<P align="center" style="font-size: 10pt">7
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt"><B>TASER INTERNATIONAL, INC.<BR>
NOTES TO FINANCIAL STATEMENTS (unaudited) &#150; Continued</B>



<P align="left" style="font-size: 10pt"><B>NOTE 8 &#150; STOCK OPTIONS</B>


<P align="left" style="font-size: 10pt">At March&nbsp;31, 2005, the Company had three stock-based employee compensation plans, which are
described more fully in Note 9 to the financial statements included in the Company&#146;s Annual Report
on Form 10-KSB/A as filed on May 23, 2005. The Company accounts for those plans under the
recognition and measurement principles of APB Opinion No.&nbsp;25, <I>Accounting for Stock Issued to
Employees</I>, and related interpretations. No stock-based employee compensation cost is reflected in
net income, as all options granted under those plans had an exercise price equal to the market
value of the underlying common stock on the date of grant. However, we have computed compensation
costs for proforma disclosure purposes, based on the fair value of all options awarded at the date
of grant, using the Black-Scholes pricing model. For purposes of this calculation, the Company used
a volatility of 106% for the three months ended March&nbsp;31, 2005 and 101% for the three months ended
March&nbsp;31, 2004, and a risk free interest rate of 3.5% for the three months ended March&nbsp;31, 2005 and
a risk free interest rate of 3.0% for the three months ended March&nbsp;31, 2004. The Company used an
expected life for options of either one and one-half or three years, depending on the vesting
period. The following table illustrates the effect
on net income and earnings per share if the Company had applied the fair value recognition
provisions of FASB Statement No.&nbsp;123, Accounting for Stock-Based Compensation, to stock-based
employee compensation. The Company will adopt SFAS No.&nbsp;123R on January&nbsp;1, 2006, which will require
stock-based compensation expense to be recognized for the portion of outstanding unvested awards,
based on the grant date fair value of those awards.



<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="80%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>For the Three Months Ended</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>March 31, 2005</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>March 31, 2004</B></TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

<TD nowrap align="LEFT" colspan="6" style="border-bottom: 0px solid #000000">(As
restated <BR>see Note 14)</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>(In thousands)</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net (Loss) Income, as reported</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">(39</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,551</TD>
    <TD>&nbsp;</TD>
</TR>


<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Add: Total
stock-based compensation included in net income as reported </DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">326</TD>
    <TD>&nbsp;</TD>
</TR>


<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deduct: Total stock-based employee compensation determined under fair value
based method for all awards, net of related tax effects</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">(490</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">(843</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pro Forma
Net (Loss) Income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(529</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,034</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net (Loss) Income per common share:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Basic, as reported</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.07</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Basic, pro forma</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(0.01</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.06</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Diluted, as reported</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.06</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Diluted, pro forma</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(0.01</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.05</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>



<P align="center" style="font-size: 10pt">8
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt"><B>TASER INTERNATIONAL, INC.<BR>
NOTES TO FINANCIAL STATEMENTS (unaudited) &#150; Continued</B>



<P align="left" style="font-size: 10pt"><B>NOTE 9 &#150; WARRANTY</B>


<P align="left" style="font-size: 10pt">The Company warrants its products from manufacturing defects for a period of one year after
purchase, and thereafter will replace any defective TASER unit for a fee. After the one year warranty expires,
if the device fails to operate properly for any reason, the Company will replace the ADVANCED TASER
device for a fee of $75, and the TASER X26 on a time and materials basis. The Company tracks
historical data related to returns and related warranty costs on a quarterly basis, and estimates
future warranty claims by applying the estimated average return rate to the product sales for the
period. Historically the reserve amount is increased if the Company becomes aware of a component
failure that could result in larger than anticipated returns from its customers. A summary of
changes in the warranty accrual for the three months ended March&nbsp;31, 2005 and 2004 is as follows:


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="80%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>March 31, 2005</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>March 31, 2004</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Balance at Beginning of Period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">457,914</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">312,934</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Utilization of Accrual</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">(275,759</TD>
    <TD align="left">)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">(101,246</TD>
    <TD align="left">)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Warranty Expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">365,718</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">368,392</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Balance at End of the Period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">547,873</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">580,080</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<P align="left" style="font-size: 10pt"><B>NOTE 10 &#150; LINE OF CREDIT</B>


<P align="left" style="font-size: 10pt">On July&nbsp;13, 2004, the Company entered into a new line of credit agreement to replace its existing
line. The agreement has a total availability of $10&nbsp;million. The line is secured primarily by the
Company&#146;s accounts receivable and inventory and bears interest at varying rates of interest,
ranging from LIBOR plus 1.5% to prime. The availability under this line is computed on a monthly
borrowing base, which is based on the Company&#146;s eligible
accounts receivable and inventory. The line of credit matures on July&nbsp;13, 2006 and requires monthly payments of
interest only. At March&nbsp;31, 2005, the available borrowing under the existing line of credit was
$3.0&nbsp;million, and there was no amount outstanding under the line of credit. There have been no
borrowings under the line of credit to date.


<P align="left" style="font-size: 10pt">The Company&#146;s agreement with the bank requires the Company to comply with certain financial and
other covenants including maintenance of minimum tangible net worth and fixed charge coverage
ratios. For the three months ended March&nbsp;31, 2005, the Company was in compliance with all
covenants.



<P align="left" style="font-size: 10pt"><B>NOTE 11 &#150; LEGAL PROCEEDINGS</B>



<P align="left" style="font-size: 10pt"><B>Securities Litigation</B>


<P align="left" style="font-size: 10pt">On January&nbsp;10, 2005, a securities class action lawsuit was filed in the United States District
Court for the District of Arizona against the Company and certain of its officers and directors,
captioned Malasky v. TASER International, Inc., et al., Case No.&nbsp;2:05 CV 115. Since then, numerous
other securities class action lawsuits were filed against the Company and certain of its officers
and directors. The majority of these lawsuits were filed in the District of Arizona. Four actions
were filed in the United States District Court for the Southern District of New York and one in the
Eastern District of Michigan. The New York and Michigan actions were transferred to the District of
Arizona. The cases were recently consolidated, and the court is considering
various motions for lead plaintiff. Pursuant to an order entered by the court, defendants need not
respond to any of the complaints originally filed in these actions. Plaintiffs will file an amended
consolidated complaint after lead plaintiff and lead counsel are chosen. Defendants will then
respond to the amended consolidated complaint.


<P align="left" style="font-size: 10pt">These actions are filed on behalf of the purchasers of the Company&#146;s stock in various class
periods, beginning as early as May&nbsp;29, 2003 and ending as late as January&nbsp;14, 2005. The complaints
allege, among other things, violations of Section 10(b) of the Securities Exchange Act of 1934, as
amended, and Rule&nbsp;10b-5, promulgated thereunder, and seek unspecified monetary damages and other
relief against all defendants. The complaints allege generally that the Company and the individual
defendants made false or misleading public statements regarding, among other things, the safety of
the Company&#146;s products and the Company&#146;s ability to meet its sales goals, including the validity of
a $1.5&nbsp;million sales order with one of the Company&#146;s
distributors in the fourth quarter of 2004. We intend to defend these
lawsuits vigorously, however, the outcome of any litigation is
inherently uncertain and there can be no assurance that any liability
that may ultimately result from the resolution of these matters will
not be in excess of amounts provided by insurance coverage and will
not have a material adverse effect on our business, operating
results or financial condition.



<P align="center" style="font-size: 10pt">9
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt"><B>TASER INTERNATIONAL, INC.<BR>
NOTES TO FINANCIAL STATEMENTS (unaudited) &#150; Continued</B>



<P align="left" style="font-size: 10pt"><B>Shareholder Derivative Litigation</B>


<P align="left" style="font-size: 10pt">On January&nbsp;11, 2005, a shareholder derivative lawsuit was filed in the United States District Court
for the District of Arizona purportedly on behalf of the Company and against certain of its
officers and directors, captioned Goldfine v. Culver, et al., Case No.&nbsp;2:05 CV 123. Since then,
five other shareholder derivative lawsuits were filed in the District of Arizona, two shareholder
derivative lawsuits were filed in the Arizona Superior Court, Maricopa County, and one shareholder
derivative lawsuit was filed in the Delaware Chancery Court. On February&nbsp;9, 2005, the shareholder
derivative actions pending in federal court were consolidated into a single action under the
caption, In re TASER International Shareholder Derivative Litigation, Case No.&nbsp;2:05 CV 123.
Pursuant to the consolidating order, defendants will not respond to any of the complaints
originally in these actions. Instead, defendants will respond to plaintiffs&#146; consolidated amended
complaint. The derivative actions in Arizona state court were consolidated and plaintiffs filed a
consolidated complaint. Defendants have not yet responded to the consolidated complaint. On April
8, 2005, defendants filed a motion to stay or, in the alternative, dismiss the Delaware derivative
action; plaintiff&#146;s opposition to defendants&#146; motion is due to be filed on July&nbsp;5, 2005.


<P align="left" style="font-size: 10pt">The complaints in the shareholder derivative lawsuits generally allege that the defendants breached
the fiduciary duties owed to the Company and its shareholders by reason of their positions as
officers and/or directors of the Company. The complaints claim that such duties were breached by
defendants&#146; disclosure of allegedly false or misleading statements about the safety and
effectiveness of Company products and the Company&#146;s financial prospects. The complaints also claim
that fiduciary duties were breached by defendants&#146; alleged use of non-public information regarding
the safety of Company products and the Company&#146;s financial condition and future business prospects
for personal gain through the sale of the Company&#146;s stock. The Company is named solely as a nominal
defendant against which no recovery is sought.


<P align="left" style="font-size: 10pt">On May&nbsp;4, 2005, a lawsuit was filed in the Delaware Chancery Court against the Company, captioned
Lucian B. Dinkens v. TASER International, Inc., Case No.&nbsp;5749754, to compel the Company to give the
plaintiff the right to inspect and copy certain books and records of the Company pursuant to
Section&nbsp;220 of Delaware General Corporation Law. The Company is in the process of reviewing the
complaint.


<P align="left" style="font-size: 10pt"><B>Securities and Exchange Commission Informal Inquiry</B>


<P align="left" style="font-size: 10pt">In December&nbsp;2004, the Company was informed that the staff of the Securities and Exchange Commission
had commenced an informal inquiry, which concerns the basis for the Company&#146;s public statements
regarding the safety and performance of the Company&#146;s products, certain disclosure issues, and the
accounting for certain transactions. The inquiry is ongoing.



<P align="left" style="font-size: 10pt"><B>Contract Litigation</B>


<P align="left" style="font-size: 10pt">In March&nbsp;2000, Thomas N. Hennigan, a distributor of our products from late 1997 through early 2000,
sued us in the United States District Court, Southern District of New York. We had previously sued
him in February&nbsp;2000 but had not served him. After the New York case was dismissed in February&nbsp;2001
for lack of personal jurisdiction, Mr.&nbsp;Hennigan brought a counterclaim in the United States
District Court for the District of Arizona. Mr.&nbsp;Hennigan claims the exclusive right to sell our
products to many of the largest law enforcement, corrections, and military agencies in the United
States. He seeks monetary damages that may amount to as much as $400&nbsp;million against us allegedly
arising in connection with his service to us as a distributor. His claims rest on theories of our
failure to pay commissions, breach of contract, promissory estoppel, breach of fiduciary duty, and
on related theories. No written contract was ever signed with Mr.&nbsp;Hennigan. We also believe that he
has no reasonable basis for claims based on informal or implied contractual rights and will be
unable to prove his damages with reasonable certainty. Mr.&nbsp;Hennigan died in April&nbsp;2001 and the case
is now being prosecuted by his estate. On May&nbsp;24, 2002, H.A. Russell was permitted to proceed as an
additional defendant-counterclaimant. The Company filed various motions in November&nbsp;2002 for
partial summary judgment including a motion to dismiss his claims. On September&nbsp;30, 2003, the Court
issued an order granting the Company&#146;s motion for partial summary judgment to dismiss Mr.&nbsp;Russell&#146;s
claims and struck Hennigan&#146;s jury demand. On April&nbsp;14, 2004, the Court issued an opinion partially
granting the Company&#146;s motion for partial summary judgment on certain joint venture,
post-termination, post-death and exclusivity claims. A pretrial conference was held on February&nbsp;18,
2005 and no trial date has been set.

<P align="left" style="font-size: 10pt">In September&nbsp;2004, the Company was served with a summons and complaint in the matter of Roy Tailors
Uniform Co., Inc. v. TASER International in which the plaintiff alleges that it is entitled to
commissions for disputed sales that were made to customers that are claimed to be plaintiff&#146;s
customers for which plaintiff is seeking monetary damages. Plaintiff failed to sign a distributor
agreement with the Company and did not have distribution rights with the Company. This case is in
the discovery phase and a trial date has not been set.

<P align="left" style="font-size: 10pt">We intend to defend the
foregoing lawsuits vigorously, however, the outcome of any litigation
is inherently uncertain and there can be no assurance that any
liability that may ultimately result from the resolution of these
matters will not be in excess of amounts provided by insurance
coverage and will not have a material adverse effect on our business,
operating results or financial condition.

<P align="center" style="font-size: 10pt">10
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt"><B>TASER INTERNATIONAL, INC.<BR>
NOTES TO FINANCIAL STATEMENTS (unaudited) &#150; Continued</B>



<P align="left" style="font-size: 10pt"><B>Product Liability Litigation</B>


<P align="left" style="font-size: 10pt">From April&nbsp;2003 to
May&nbsp;2005, the Company was named as a defendant in 21 lawsuits in which the
plaintiffs alleged either wrongful death or personal injury in situations in which the TASER device
was used by law enforcement officers or during training exercises. One case has been dismissed with
prejudice, another case has been dismissed without prejudice but has been refiled, but not served,
and the balance of the cases are pending. With respect to each of
these 21 cases, the table below
lists the name of plaintiff, the date the Company was served with process, the jurisdiction in
which the case is pending, the type of claim and the status of the matter. In each of these
lawsuits, the plaintiff is seeking monetary damages from the Company. We have submitted the defense
of each of these lawsuits to our insurance carriers as we maintained during these periods and
continue to maintain product liability insurance coverage with varying limits and deductibles. The
Company&#146;s product liability insurance coverage during these periods ranged from $5,000,000 to
$10,000,000 in coverage limits and from $10,000 to $250,000 in deductibles. The Company is
defending each of these lawsuits vigorously. Although the Company does not expect the outcome in
any individual case to be material, the outcome of any litigation is inherently uncertain and there
can be no assurance that any liability that may ultimately result from the resolution of these
matters will not be in excess of amounts provided by insurance coverage and will not have a
material adverse effect on our business, operating results or financial condition.


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="15%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Month</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Plaintiff</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Served</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Jurisdiction</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Claim Type</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Status</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Del&#146;Ostia</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3/2004</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">US District Court, SD FL</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wrongful Death</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Dismissed With Prejudice</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Alvarado</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">4/2003</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">CA Superior Court</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wrongful Death</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">City of Madera</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">6/2003</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">CA Superior Court</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wrongful Death</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Borden</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">9/2004</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">US District Court, SD IN</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wrongful Death</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Thompson</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">9/2004</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">MI Circuit Court</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wrongful Death</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Pierson</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">11/2004</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">US District Court, CD CA</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wrongful Death</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Glowczenski</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10/2004</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">US District Court, ED NY</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wrongful Death</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">LeBlanc</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">12/2004</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">US District Court, CD CA</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wrongful Death</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Elsholtz</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">12/2004</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">TX District Court</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wrongful Death</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Kerchoff</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">6/2004</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">US District Court, ED MI</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Training Injury</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Dismissed, Refiled but not served</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Powers</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">11/2003</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">AZ Superior Court</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Training Injury</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">June 2005 Trial Scheduled</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Cook</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">8/2004</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">NV District Court</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Training Injury</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Stevens</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10/2004</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">OH Court Common Pleas</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Training Injury</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Eckenroth</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">11/2004</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">AZ Superior Court</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Training Injury</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Lipa</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2/2005</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">MI Circuit Court</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Training Injury</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Dimiceli</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3/2005</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">FL Circuit Court</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Training Injury</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Cosby</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">8/2004</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">US District Court, SD NY</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Injury During Arrest</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Blair</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3/2005</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">US District Court, MD NC</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Injury During Detention</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Madrigal</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">5/2005</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">AZ Superior Court</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wrongful Death</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Washington</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">5/2005</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">US District Court, ED CA</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wrongful Death</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>



<TR valign="bottom" style="background: #cceeff">

<TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Clark</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">5/2005</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">US District Court, ND TX</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wrongful Death</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt"><B>Other Litigation</B>


<P align="left" style="font-size: 10pt">In January&nbsp;2005, the Company filed litigation in U.S. District Court for the Western District of
North Carolina against Stinger Systems, Inc. and Robert Gruder alleging false advertising and a
violation of the Lanham Act. The defendants have filed a counterclaim against the Company alleging
defamation. This case is in the discovery phase and no trial date has been set.


<P align="left" style="font-size: 10pt">In February&nbsp;2005, the Company filed litigation in Superior Court for Maricopa County, Arizona
against its former patent attorney, Thomas G. Watkins III, alleging breach of fiduciary duty and
estoppel arising out of ownership and inventorship claims Mr.&nbsp;Watkins has made against a patent he
filed for the Company for certain technology utilized in the TASER X26 product. This case is in the
discovery phase and no trial date has been set.

<P align="left" style="font-size: 10pt">We intend to pursue and defend the foregoing lawsuits vigorously, however, the outcome of any litigation
is inherently uncertain and there can be no assurance that any liability that may ultimately result from the resolution of these
matters will not be in excess of amounts provided by insurance coverage and will not have a material adverse effect on our business, operating results or financial condition.



<P align="center" style="font-size: 10pt">11
</DIV>


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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">



<P align="left" style="font-size: 10pt"><B>TASER INTERNATIONAL, INC.<BR>
NOTES TO FINANCIAL STATEMENTS (unaudited) &#150; Continued</B>


<P align="left" style="font-size: 10pt"><B>NOTE 12 &#150; RELATED PARTY TRANSACTIONS</B>


<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company charters an aircraft for business travel from Four Futures Corporation, which is
wholly-owned by Thomas P. Smith, President of the Company, and his family. For the three months
ended March&nbsp;31, 2005, the Company incurred charter expenses of approximately $67,000 to Four
Futures Corporation and Thomas P. Smith. Any personal use of the aircraft by Mr.&nbsp;Smith is billed to
Four Futures Corporation for reimbursement. For the three months ended March&nbsp;31, 2005, no expenses
were billed to Four Futures Corporation for personal use of the aircraft. For the three months
ended March&nbsp;31, 2004, no expenses were incurred for Four Futures Corporation, and no expenses were
billed to Four Futures Corporation for personal use of the aircraft. At March&nbsp;31, 2005, the Company
had an outstanding payable of approximately $67,000 to Four Futures Corporation and Thomas P.
Smith, and no amounts due from Four Futures Corporation. The Company believes that the rates
charged by Four Futures Corporation are equal to or below commercial rates the Company would pay to
charter similar aircraft from independent charter companies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company also charters an aircraft for business travel from Thundervolt, LLC, which is wholly
owned by Patrick W. Smith, Chief Executive Officer of the Company, and Phillips W. Smith, Chairman
of the Company&#146;s Board. For the three months ended March&nbsp;31, 2005, the Company incurred charter
expenses of approximately $105,000 to Thundervolt, LLC. Any personal use of the aircraft by
Patrick, Phillip or Thomas Smith is billed to Thundervolt, LLC, or directly to the individual, for
reimbursement. For the three months ended March&nbsp;31, 2005, the Company billed approximately $99,000
to Thundervolt, LLC, Patrick W. Smith, Phillips W. Smith and Thomas P. Smith for personal use of
the aircraft. For the three months ended March&nbsp;31, 2004, no expenses were incurred for Thundervolt,
LLC, and no expenses were billed to Thundervolt, LLC for personal use of the aircraft. At March&nbsp;31,
2005, the Company had no outstanding balance payable due to Thundervolt, LLC and $106,000
outstanding receivable from Thundervolt, LLC, Patrick W. Smith, Phillips W. Smith and Thomas P.
Smith. The Company believes that the rates charged by Thundervolt, LLC are equal to or below
commercial rates the Company would pay to charter similar aircraft from independent charter
companies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In November&nbsp;2004, the Company established the TASER Foundation. The TASER Foundation is a 501(c)3
non-profit corporation and has made application to the IRS for tax exempt status. The TASER
Foundation&#146;s mission is to honor the service and sacrifice of local and federal law enforcement
officers in the United States and Canada lost in the line of duty by providing financial support to
their families. Patrick W. Smith, Thomas P. Smith and Daniel M. Behrendt, all officers of the
Company, also serve on the Board of Directors of the TASER Foundation. Over half of the initial $1
million endowment was contributed directly by TASER International, Inc. employees. The Company
bears all administrative costs of the TASER Foundation in order to ensure 100% of all donations are
distributed to the families of fallen officers. For the three months ended March&nbsp;31, 2005, the
Company has incurred approximately $22,000 in such administrative costs. In addition, for the three
months ended March&nbsp;31, 2005, the Company had committed $125,000 to the TASER Foundation which was
still payable at March&nbsp;31, 2005.
</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left" style="font-size: 10pt"><B>NOTE 13 &#150; RECENT ACCOUNTING PRONOUNCMENTS</B>



<P align="left" style="font-size: 10pt">In November 2004, the FASB issued SFAS No. 151, &#147;Inventory Costs, an amendment of ARB No. 43, Chapter 4.&#148; SFAS No. 151
amends the guidance in ARB No. 43, &#147;Inventory Pricing,&#148; for abnormal amounts of idle facility expense, freight, handling costs, and
wasted material (spoilage) requiring that those items be recognized as current-period expenses regardless of whether they meet the
criterion as &#147;so abnormal.&#148; This statement also requires that allocation of fixed production overheads to the costs of conversion be
based on the normal capacity of the production facilities. The statement is effective for inventory costs incurred after June 15, 2005.
Management does not expect this statement to have a material impact
on the Company&#146;s financial position or results of operations.



<P align="left" style="font-size: 10pt">In December&nbsp;2004, the
FASB issued SFAS No.&nbsp;123R, &#147;Share- based Payment.&#148; This standard is a revision
of SFAS No.&nbsp;123, Accounting for Stock- Based Compensation, and supersedes Accounting Principles
Board Opinion No.&nbsp;25, Accounting for Stock Issued to Employees, and its related implementation
guidance. SFAS No.&nbsp;123R requires the measurement of the cost of employees&#146; services received in
exchange for an award of the entity&#146;s equity instruments based on the grant-date fair value of the
award. The cost will be recognized over the period during which an employee is required to provide
service in exchange for the award. No compensation cost is recognized for equity instruments for
which employees do not render service. SFAS No.&nbsp;123R also requires the benefits of tax deductions
in excess of recognized compensation cost be reported as a financing cash flow rather than as an
operating cash flow as required under current literature. This requirement will reduce net cash
flows from operating activities in periods after the adoption. The Company will adopt SFAS No.&nbsp;123R
on January&nbsp;1, 2006, which will require stock-based compensation expense to be recognized for the
portion of outstanding unvested awards, based on the grant date fair value of those awards. The
Company is currently evaluating the transition provisions of this standard; and to what extent the
Company&#146;s equity instruments will be used in the future for employees&#146; services. Therefore, the
impact on the Company&#146;s financial statements of the adoption of SFAS No.&nbsp;123R cannot be predicted
with certainty.

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left" style="font-size: 10pt"><B>NOTE 14 &#150; RESTATEMENT
</B>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left" style="font-size: 10pt">On November 14, 2005, we concluded that our financial statements
at March 31, 2005 and for the period then ended, included in our Form 10-Q for the period ended
March 31, 2005, should no longer be relied upon due to an error in those financial statements which
resulted from the incorrect accrual of legal and professional fees and other expenses for that period.
Beginning in the first quarter of 2005, we experienced a significant increase in outside legal
and other professional expenses. We determined that our internal controls surrounding the
recording of legal and professional fees in the appropriate accounting period were not operating effectively.
Certain of the invoices relating to the work performed were not received by our accounting department until
after we had closed our books and reported our financial results for such periods due to delays on the part
of third parties in delivering or communicating such invoices to us. As a result, certain invoices were recorded
in the incorrect period. Correction of these errors resulted in the shifting of expenses among the first three
quarters of 2005 with expenses increasing in the first quarter of 2005 and decreasing in the second quarter of
2005 from the figures included in the previously filed Form 10-Qs.
There was a corresponding decrease/increase in
net income for the first and second quarters resulting from the change in expenses. The
restatement had no impact on revenues for the periods.
<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left" style="font-size: 10pt">The following changes have been made to the previously reported
financial statements as of and for the quarter ended March 31, 2005.
<DIV align="left"><FONT size="1">

</FONT></DIV>


<P align="center" style="font-size: 10pt">12
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 0px solid #000000"><B>Balance Sheet:</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>March 31, 2005</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>As Previously</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Reported</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>As Restated</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current deferrred income tax asset</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8,563,864</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8,694,864</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44,370,572</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44,501,572</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Property and equipment, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,665,994</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,554,581</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">108,758,510</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">109,778,097</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accounts payable and accrued liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,455,120</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,681,643</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total current liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,606,802</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,833,325</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,227,517</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,454,040</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Retained earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,227,385</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,020,449</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total stockholders&#146; equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">101,530,993</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">101,324,057</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total liabilities and stockholders&#146; equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">108,758,510</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">109,778,097</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 0px solid #000000"><B>Statement of Income:</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>For the Three Months Ended</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>March 31, 2005</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>As Previously</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Reported</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>As Restated</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sales, general and administrative expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,252,164</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,590,100</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income (loss)&nbsp;from operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">76,609</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(261,327</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income (loss)&nbsp;before income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">275,021</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(62,915</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Provision (credit)&nbsp;for income tax</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">107,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(24,000</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net income (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">168,021</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(38,915</TD>
    <TD nowrap>)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 0px solid #000000"><B>Statement of Cashflow:</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>For the Three Months Ended</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>March 31, 2005</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>As Previously</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Reported</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>As Restated</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net income (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">168,021</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(38,915</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stock option tax benefit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">201,072</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">70,072</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accounts payable and accrued liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,931,973</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,594,037</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non cash
transactions &#151;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Increase to deferred tax asset related to tax
benefits, realized from the exercise of stock options</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">965,152</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,096,152</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Increase to property and equipment with a
corresponding increase in accounts payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">500,888</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,389,475</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">13
</DIV>



<P align="center" style="font-size: 10pt">
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="107"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 2. MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.</B>


<P align="left" style="font-size: 10pt">The following is a discussion of the Company&#146;s financial condition and results of operations for
the three months ended March&nbsp;31, 2005 and March&nbsp;31, 2004. The following discussion may be
understood more fully by reference to the financial statements, notes to the financial statements,
and the Management&#146;s Discussion and Analysis of Financial Condition or Plan of Operation section
contained in the Company&#146;s Annual Report on Form 10-KSB/A, filed
on May 23, 2005.

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left" style="font-size: 10pt">As discussed in Note 14 to
the financial statements contained herein, our March&nbsp;31, 2005
financial statements have been restated. The following
Management&#146;s Discussion and Analysis of Financial Condition and
Results of Operations gives effect to that restatement.
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left" style="font-size: 10pt">Certain statements contained in this report may be deemed to be forward-looking statements as
defined by the Private Securities Litigation Reform Act of 1995, and the Company intends that such
forward-looking statements be subject to the safe-harbor created thereby. <I>Such forward-looking
statements relate to, among other things: expected revenue and earnings growth; estimates regarding
the size of our target markets; successful penetration of the law enforcement market; expansion of
product sales to the private security, military and consumer self-defense markets; growth
expectations for new and existing accounts; expansion of production capability; new product
introductions; and our business model. We caution that these statements are qualified by important
factors that could cause actual results to differ materially from those reflected by the
forward-looking statements herein. Such factors include, but are not limited to: market acceptance
of our products; establishment and expansion of our direct and indirect distribution channels;
attracting and retaining the endorsement of key opinion-leaders in the law enforcement community;
the level of product technology and price competition for our products; the degree and rate of
growth of the markets in which we compete and the accompanying demand for our products; potential
delays in international and domestic orders; implementation risks of manufacturing automation;
risks associated with rapid technological change; execution and implementation risks of new
technology; new product introduction risks; ramping manufacturing production to meet demand;
litigation resulting from alleged product- related injuries; media publicity concerning allegations
of deaths occurring after use of the TASER device and the negative impact this publicity could have
on sales; product quality risks; potential fluctuations in quarterly operating results;
competition; financial and budgetary constraints of prospects and customers; dependence upon sole
and limited source suppliers; fluctuations in component pricing; risks of governmental regulations;
dependence on a single product; dependence upon key employees; employee retention risks; and other
factors detailed in the Company&#146;s filings with the Securities and Exchange Commission</I>.





<P align="left" style="font-size: 10pt"><B>Overview</B>


<P align="left" style="font-size: 10pt">We began operations in Arizona in 1993 for the purpose of developing and manufacturing non-lethal
self-defense devices. In December&nbsp;1999, we introduced our ADVANCED TASER device for sale in the law
enforcement market. Although we had limited financial resources, in 2001, we focused on building
the distribution channel for marketing our product line and developing a nationwide training
program to introduce our product line to law enforcement agencies, primarily in North America. We
also completed our initial public offering in 2001. In April&nbsp;2002, we received a grant from the
Office of Naval Research to aid the U.S. Government with the development of non-lethal weapons for
the military. This grant provided us with added funding for our research and development efforts,
and also validated our position as a leader in non-lethal technologies. In 2003, we remained
focused on expanding our manufacturing and sales infrastructure to support the growing demand for
our products, continued developing new product capabilities, and added resources to expand our
technology base. In May&nbsp;2003, we introduced our TASER X26 device which incorporated the strengths
of its predecessor, the ADVANCED TASER device, but also introduced a new &#147;shaped pulse&#148; technology,
and a smaller form factor. The TASER X26 began shipping in September&nbsp;2003. In June&nbsp;2003, we
purchased patent applications and patents from a former competitor in the manufacture and sale of
Taser conducted energy weapons to law enforcement. In 2003, we shipped our products to key United
States Military command posts, and worked with several key international police and military forces
to conduct safety and reliability testing for future deployment.


<P align="left" style="font-size: 10pt">Our business grew substantially in 2004 and we achieved 177% growth in net sales compared to 2003,
earned $18.9&nbsp;million in net income, and generated more than $30.3&nbsp;million of cash through operating
activities. During 2004, our TASER X26 met with significant customer approval contributing more
than $46.1&nbsp;million of net sales for the year. During 2004, we also achieved many of the financial
objectives established by the Company at the time of our initial public offering, including our
targeted gross margin; sales, general and administrative expenses; research and development costs;
operating income; day&#146;s sales outstanding and inventory turns.


<P align="left" style="font-size: 10pt">Currently, our ADVANCED TASER product line consists of the ADVANCED TASER device (there are three
versions: the M26, the M18 and the M18-L), various cartridges that shoot two small, electrified
probes up to 25 feet, rechargeable batteries, a battery recharging system, data download package,
extended warranty packages, and a number of holstering accessories. In addition to the law
enforcement line of ADVANCED TASER products, we also developed a slightly less powerful private
citizen version of the ADVANCED TASER device for the private citizen self defense market. This line
includes the ADVANCED TASER M18L, with integrated laser sight, the ADVANCED TASER M18 without an
integrated laser sight, a cartridge that shoots two small, electrified probes up to 15 feet, and a
number of holstering accessories.


<P align="left" style="font-size: 10pt">Law enforcement, military and corrections agencies represent our primary target markets. In each of
these markets, the decision to purchase TASER devices is normally made by a group of people
including the agency head, his or her training staff, and weapons experts. Depending on the size
and cost of the device deployment, the decision may involve political decision-makers such as city
council members and the federal government. The decision-making process can take as little as a few
weeks or as long as several years. In 2004, we shipped a total of 16,612 orders at an average sale
price of $4,072 per shipment. This compares to 9,580 orders shipped in 2003, at an average sales
price of $2,553 per order. Sales into the private citizen market were not significant in 2004. With
the exception of several accounts to which we sell directly, the vast majority of our law
enforcement agency sales in the Unites States occur through our network of 28 law enforcement
distributors. Sales in the private citizen market are made through web sales and through 25
commercial distributors.









<P align="center" style="font-size: 10pt">14
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<DIV style="font-family: 'Times New Roman',Times,serif">



<P align="left" style="font-size: 10pt">Our international sales are made through a network of international distributors that work in a
specific territory generally under short term exclusive agreements. Prior to 2004, we concentrated
our resources on the United States law enforcement and corrections market and our international
sales efforts were limited. We shipped products to approximately 43 countries during fiscal 2004.
Our sales outside the U.S. accounted for approximately 11% our of sales in the first quarter of
2005, 4% of our sales in 2004 and 12% of our sales in 2003. During 2005, we have been bolstering
our international presence by expanding our focus to a larger number of countries.


<P align="left" style="font-size: 10pt">We conduct manufacturing and final assembly operations at our headquarters in Scottsdale, Arizona
and we own all of the equipment required to manufacture and assemble our finished products. With
our current work force we are able to produce approximately 80,000 cartridges per month, and more
than 7,500 TASER devices. We believe we can expand our production capabilities by adding additional
personnel with negligible new investment in tooling and equipment.


<P align="left" style="font-size: 10pt">Our devices are not considered to be a &#147;firearm&#148; by the U.S. Bureau of Alcohol, Tobacco, Firearms
and Explosives. Therefore, no firearms-related regulations apply to the sale and distribution of
our devices within the United States. However, many states have regulations restricting the sale
and use of stun guns, inexpensive hand-held shock devices which we believe apply to our devices.


<P align="left" style="font-size: 10pt">Our products are often used in aggressive confrontations that may result in serious, permanent
bodily injury or death to those involved. Our products may cause or be associated with these
injuries. A person injured in a confrontation or otherwise in connection with the use of our
products may bring legal action against us to recover damages on the basis of theories including
personal injury, wrongful death, negligent design, dangerous product or inadequate warning. We are
currently subject to a number of such lawsuits. We may also be subject to lawsuits involving
allegations of misuse of our products. If successful, personal injury, misuse and other claims
could have a material adverse effect on our operating results and financial condition. Although we
carry product liability insurance, significant litigation could also result in a diversion of
management&#146;s attention and resources, negative publicity and an award of monetary damages in excess
of our insurance coverage. The outcome of any litigation is inherently uncertain and there can be
no assurance that our existing or any future litigation will not have a material adverse effect on
our revenues, our financial condition or financial results.


<P align="left" style="font-size: 10pt">Our future challenges include risk management and managing the cost structure of our business. As
our weapon systems are deployed around the world, we expect to see an increased number of
complaints filed against the Company alleging injuries resulting from the use of a TASER device. We
carry product liability insurance to help defray the costs associated with these claims, but will
likely experience increased legal costs and higher insurance premiums in the future. In addition,
the implications of the Financial Accounting Standards Board (&#147;FASB&#148;) 123R, which requires the
expensing of fair value of employee stock options, may result in a significant additional
compensation expense to be recorded by the Company.

<P align="left" style="font-size: 10pt"><B>Critical Accounting Policies</B>


<P align="left" style="font-size: 10pt">We have identified the following policies as critical to our business operations and the
understanding of our results of operations. The preparation of this Quarterly Report on Form 10-Q
requires us to make estimates and assumptions that affect the reported amount of assets and
liabilities, disclosure of contingent assets and liabilities at the date of our financial
statements, and the reported amounts of revenue and expenses during the reporting period. There can
be no assurance that actual results will not differ from those estimates. The effect of these
policies on our business operations is discussed below.





<P align="center" style="font-size: 10pt">15
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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><I>Revenue Recognition. </I>Our revenue recognition policy is significant because our revenue is a key
component of our results of operations. We recognize revenues when persuasive evidence of an
arrangement exists, delivery has occurred or services have been rendered, title has transferred,
the price is fixed and collectability is reasonably assured. All of the Company&#146;s sales are final
and our customers do not have a right to return the product. We charge certain of our customers
shipping fees, which are recorded as a component of net sales. We record training revenue as the
service is provided. In 2003, we began offering our customers the right to purchase extended
warranties on our ADVANCED TASER product and TASER X26 product. Revenue for warranty purchases is
deferred at the time of sale, and recognized over the warranty period. At March&nbsp;31, 2005, $890,000
was deferred under this program. At December&nbsp;31, 2004, $839,000 was deferred under this program.
The Company also defers revenue associated with the one-on-one private citizen training and
background checks that are included with the purchase of an X26<SUP style="font-size: 85%; vertical-align: text-top">C</SUP> private
citizen device. The revenue associated with these items is deferred until the service is provided.
At March&nbsp;31, 2005, the Company had deferred approximately $143,000 relating to these items, and
another $33,000 relating to the training of federal firearms licensed dealers who will sell the
X26<SUP style="font-size: 85%; vertical-align: text-top">C</SUP> device. At December&nbsp;31, 2004, the Company had deferred approximately
$135,000 relating to the private citizen training and background checks, and another $33,000
relating to the training of federal firearms licensed dealers who will sell the
X26<SUP style="font-size: 85%; vertical-align: text-top">C</SUP> device.


<P align="left" style="font-size: 10pt"><I>Standard Warranty Costs. </I>We warrant our products from manufacturing defects for a period of one
year after purchase and will replace any defective unit with a new one for a fee. After the one
year warranty expires, if the device fails to operate properly for any reason, the Company will
replace the ADVANCED TASER device for a fee of $75, and the TASER X26 on a time and materials
basis. We track historical data related to returns and related warranty costs on a quarterly
basis, and estimate future warranty claims by applying our four quarter average warranty return
rate to our product sales for the period. We have also historically increased our reserve amount if
we become aware of a component failure that could result in larger than anticipated returns from
our customers. As of March&nbsp;31, 2005, our reserve for warranty returns was $548,000 compared to a
$458,000 reserved at December&nbsp;31, 2004.





<P align="left" style="font-size: 10pt"><I>Inventory. </I>Our inventory balance includes the application of overhead expenditures. This
calculation is based upon the standard manufacturing costs for each sub assembly and finished
product in inventory at the period end, and includes allocations for indirect manufacturing,
manufacturing overhead expenditures and engineering expenses incurred during the period. On March
31, 2005, the reserve for obsolete inventory was $213,000, compared to $144,000 at December&nbsp;31,
2004. In the first quarter of 2005, the Company increased inventory balances by $2.1&nbsp;million to
$8.9&nbsp;million at March&nbsp;31, 2005 from $6.8&nbsp;million at December&nbsp;31, 2004. The increase in inventory
levels was planned in order to provide safety stock prior to the Company&#146;s move to its new
corporate headquarters and to meet anticipated future demand.


<P align="left" style="font-size: 10pt"><I>Accounts Receivable</I>. Sales are typically made on credit
and we generally do not require collateral. We perform ongoing credit evaluations of our customers&#146;
financial condition and maintain an allowance for estimated potential losses. Uncollectible
accounts are written off when deemed uncollectible, and accounts receivable are presented net of an
allowance for doubtful accounts.






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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><B>Results of Operations</B>

<P align="left" style="font-size: 10pt"><B>Three Months Ended
March&nbsp;31, 2005 Compared to the Three Months Ended March&nbsp;31, 2004</B>


<P align="left" style="font-size: 10pt"><I>Net Sales. </I>Net Sales decreased $2.9&nbsp;million, or 22%, to $10.2&nbsp;million for the first quarter of 2005
compared to $13.1&nbsp;million for the first quarter of 2004. We believe the principal reasons for the
decrease in net sales relate to the adverse effect on customers and potential customers of the
negative publicity surrounding our products or use of our products, and potential competition which
may cause our customers to postpone or delay orders to allow them to evaluate other competing
products. Specifically, TASER X26 device sales decreased $2.2&nbsp;million to $6.6&nbsp;million for the first
quarter of 2005 compared to $8.8&nbsp;million for the first quarter of 2004. ADVANCED TASER device sales
decreased $642,000 for the first quarter of 2005 to $698,000 compared to $1.3&nbsp;million for the first
quarter of 2004. This decline is associated with reduced sales of the ADVANCED TASER product line
as many customers transitioned to the smaller and lighter TASER X26 models.


<P align="left" style="font-size: 10pt">For the three months ended March&nbsp;31, 2005 and 2004, sales by product line were as follows (amounts
in thousands):


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="60%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>March 31, 2005</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>March 31, 2004</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Sales by Product Line</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">TASER X26</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,563</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">64</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8,787</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">67</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ADVANCED TASER</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">698</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">7</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,340</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">10</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">AIR TASER</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">57</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Single Cartridges</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,433</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">24</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,846</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">22</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">483</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">5</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">107</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">10,204</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">13,137</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">In the first quarter of 2005, the number of ADVANCED TASER devices and TASER X26 devices sold
decreased by 5,572 units, or 37%, to 9,375 devices sold in the first quarter of 2005 compared to
14,947 devices sold in the first quarter of 2004. Single cartridge sales decreased by 23,028 units,
or 13%, to 153,916 sold in the first quarter of 2005 compared to 176,944 sold in the first quarter
of 2004.


<P align="left" style="font-size: 10pt"><I>Cost of Products Sold. </I>Cost of products sold remained flat at $4.5&nbsp;million for the first quarter of
2005 compared to the first quarter of 2004. However, as a percentage of net sales, cost of products
sold increased to 44% of net sales for the first quarter of 2005 compared to 35% of net sales for
the first quarter of 2004. This increase is attributable to the decline in device sales which
resulted in fewer units over which to apply indirect manufacturing expenses, resulting in higher
per unit costs. Indirect expenses primarily include depreciation, rent, supplies, freight, indirect
salaries for manufacturing support personnel, and scrapped materials. Direct manufacturing costs
also increased as a percentage of sales to 30% of sales for the first quarter of 2005 compared to
24% of sales in the first quarter of 2004. The increase in direct manufacturing expenses as a
percentage of sales was primarily due to lower production yields in 2005 and a to a lesser extent a
change in the sales mix to a higher percentage of cartridges.


<P align="left" style="font-size: 10pt"><I>Gross Margin. </I>Gross margins declined $2.9&nbsp;million to $5.7&nbsp;million for the first quarter of 2005
compared to $8.6&nbsp;million for the first quarter of 2004. As a percentage of sales, gross margins
declined to 56% for the first quarter of 2005 compared to 66% for the first quarter of 2004. This
decrease is due to the higher cost of sales per unit for the reasons discussed above.


<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left" style="font-size: 10pt"><I>Sales, General and Administrative Expenses. </I>Sales, general and administrative expenses increased
$3.0&nbsp;million, or 118%, to $5.6&nbsp;million for the first quarter of 2005 compared to $2.6&nbsp;million for
the first quarter of 2004. The increase in sales, general and administrative expenses is partially
the result of the Company developing its infrastructure over the last year to support its business.
Included in this increase in the first quarter of 2005 were significant increases in the Company&#146;s
legal and professional fees, salaries and benefits, travel expenses,
liability insurance, and public relations.
The increase in public relations activities is associated with the Company&#146;s continuing efforts to
educate the public in regard to the safety and efficacy of its products. Increases in legal fees
relate to the Company&#146;s defense costs in the product liability, contract and securities litigation
discussed further in Part&nbsp;II, Item&nbsp;1 below.
<DIV align="left"><FONT size="1">

</FONT></DIV>


<P align="left" style="font-size: 10pt"><I>Research and Development Expenses. </I>Research and development expenses increased $80,000, or 30%, to
$347,000 for the first quarter of 2005 compared to $267,000 for the first quarter of 2004. This
increase is due to higher headcount to support the Company&#146;s continuing efforts to develop new
products such as projectile weapon platform and the TASER Anti Personnel Munition (TAPM).


<P align="left" style="font-size: 10pt"><I>Interest Income. </I>Interest income increased $159,000 to $199,000 for the first quarter of 2005
compared to $40,000 for the first quarter of 2004. This increase in interest income resulted from
higher cash reserves invested in higher yielding investments. The Company had cash, cash
equivalents and investment balances of $48.0&nbsp;million at March&nbsp;31, 2005 compared to $24.7&nbsp;million at
March&nbsp;31, 2004.



<P align="center" style="font-size: 10pt">17
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left" style="font-size: 10pt"><I>Income Taxes. </I>The
provision for income tax decreased $2.3&nbsp;million to $(24,000) for the first quarter
of 2005 compared to $2.3&nbsp;million for the first quarter of 2004. This decrease was the result of
the net loss before taxes for the first quarter of 2005. The effective income tax rate for the
first quarter of 2005 was 38.1% compared to 38.8% for the first quarter of 2004.
<DIV align="left"><FONT size="1">

</FONT></DIV>


<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left" style="font-size: 10pt">During the first quarter of 2005, we received approximately $1.2&nbsp;million of tax benefits from the
exercise of stock options and subsequent sale of the underlying stock compared to $8.9&nbsp;million for
the first quarter of 2004. The net deferred tax asset as of
March&nbsp;31, 2005 totaled $27.6&nbsp;million
compared to $6.4&nbsp;million at December&nbsp;31, 2004.
<DIV align="left"><FONT size="1">

</FONT></DIV>


<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left" style="font-size: 10pt"><I>Net (Loss) Income. </I>Net
income decreased $3.6&nbsp;million to a loss of $39,000 for the first
quarter of 2005 compared to net income of $3.6&nbsp;million for the first quarter of 2004. The decrease in net income resulted primarily from the
decline in sales volume for the quarter and the negative effect this had on the Company&#146;s ability
to leverage its fixed costs. Income per basic share decreased $0.07 to $0.00 in the first quarter
of 2005 compared to $0.07 for the first quarter of 2004. Income per diluted share also decreased
$0.06 to $0.00 per share in the first quarter of 2005 compared to $0.06 for the first quarter of
2004. Basic earnings per share calculations were based on weighted average shares outstanding of
61,101,125 for the first quarter of 2005 and 52,732,944 for the first quarter of 2004. Diluted
earnings per share calculations were based on weighted average shares outstanding of 63,948,784 for
the first quarter of 2005 and 60,100,316 for the first quarter of 2004. All share and per share
amounts have been retroactively restated for the two stock splits executed in the second and fourth
quarters of 2004.
<DIV align="left"><FONT size="1">

</FONT></DIV>


<P align="left" style="font-size: 10pt"><B>Liquidity and Capital Resources</B>


<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left" style="font-size: 10pt"><I>Liquidity. </I>As of
March&nbsp;31, 2005, the Company had working capital of $36.7&nbsp;million compared to
working capital of $51.1&nbsp;million at December&nbsp;31, 2004. The decrease in working capital was
primarily due to the decrease in accounts receivable resulting from lower sales levels in the first
quarter of 2005 compared to the fourth quarter of 2004, a reduction in the current portion of the
deferred tax asset to reflect the expected use of net operating loss
carry forwards in the next twelve months, and a
shift in our investments from short-term to long-term which was made to take advantage of the
higher yields on the longer- term investments. A portion of the short-term investments were also
converted to cash and cash equivalents to give the Company more cash on hand to meet cash flow
needs. The decreases in accounts receivable and short-term investments were partially offset by
increases in inventory. The increase in inventory was made to have adequate safety stock on hand
when the Company relocated its operations in the beginning of April&nbsp;2005 and to have sufficient
inventory to meet anticipated future demand.
<DIV align="left"><FONT size="1">

</FONT></DIV>


<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left" style="font-size: 10pt">During the first quarter of
2005, we generated $1.4&nbsp;million in cash from operations compared to the
$3.7&nbsp;million generated from operations in the same period in 2004. The decrease in cash provided by
operations was primarily due to the decrease in net income from $3.6&nbsp;million in the first quarter
of 2004 to a loss of $39,000 in the first quarter of 2005. The
Company realized tax benefits generated from
the exercise and subsequent sale of stock options of $70,000 in the first quarter of 2005
compared to $1.7&nbsp;million in the first quarter of 2004, due to
the loss before taxes in the
first quarter of 2005.
<DIV align="left"><FONT size="1">

</FONT></DIV>


<P align="left" style="font-size: 10pt">We generated
$2.0&nbsp;million of cash from investing activities during the first quarter of 2005,
compared to $0.5&nbsp;million of cash used in investing activities in the first quarter of 2004. The
proceeds from investments which matured in the first quarter of 2005
of $18.2 were partially offset
by the purchase of other investments of $12.5&nbsp;million and $3.7&nbsp;million of investments in property
and equipment. Of the funds invested in property and equipment in the first quarter of 2005, $2.4&nbsp;million was used for the
construction of a new 100,000 square foot manufacturing and administrative facility in Scottsdale,
Arizona, $0.5&nbsp;million was used for production equipment, and $0.5&nbsp;million was used to purchase and
install new computer equipment and software, including a new ERP system.


<P align="left" style="font-size: 10pt">During the first quarter of 2005, we generated $0.3&nbsp;million of cash from financing activities,
compared to the $5.6&nbsp;million generated from financing activities in the first quarter of 2004. The
$0.3&nbsp;million of cash generated from financing activities in the first quarter of 2005 was driven by
proceeds from stock options exercised, compared to $3.6&nbsp;million of proceeds of stock options
exercised in the same period of 2004. Cash generated from the exercise of warrants was $2.2
million in the first quarter of 2004. All unexercised warrants expired in 2004, so there was not
any cash generated from the conversion of warrants in the first
quarter of 2005. The Company paid off its notes
payable of $250,000 in the first quarter of 2004.


<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left" style="font-size: 10pt"><I>Capital Resources. </I>On March&nbsp;31, 2005, the Company had cash and investments of $48.0&nbsp;million and no
long term debt outstanding. At March&nbsp;31, 2005, the Company has a
purchase commitment of $0.8&nbsp;million to complete the
construction of its new manufacturing and headquarters facility in Scottsdale Arizona. The Company
has adequate cash and short-term investments maturing to fund this commitment.
<DIV align="left"><FONT size="1">

</FONT></DIV>



<P align="center" style="font-size: 10pt">18
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">We negotiated a revolving line of credit on July&nbsp;13, 2004, through a domestic bank. The total
availability on the line is $10&nbsp;million. The line is secured by substantially all of our assets,
other than intellectual property, and bears interest at varying rates, ranging from LIBOR plus 1.5%
to prime. The line of credit matures on July&nbsp;13, 2006 and requires monthly payments of interest
only. At March&nbsp;31, 2005, there was a calculated availability of
$3.0&nbsp;million based on the defined
borrowing base, which is based on the company&#146;s eligible
accounts receivable and inventory. However, there was no outstanding balance under the line of credit at March&nbsp;31,
2005, and no borrowings under the line as of the date of the filing of this Form 10-Q.

<P align="left" style="font-size: 10pt"><I>Commitments and
Contingencies</I>



<P align="left" style="font-size: 10pt">The following table outlines our future contractual financial obligations, in thousands, as of March&nbsp;31, 2005:




<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Less than</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">After</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Total</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">1 year</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">1-3 years</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">4-5 years</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">5 years</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating Leases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">172</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">153</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capital Leases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Purchase commitment for new headquarters facility</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">784</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">784</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total contractual cash obligations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">958</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">939</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>


<P align="left" style="font-size: 10pt">We believe our existing cash balances and short-term and long-term investments, together with cash
expected to be generated from operating activities, will be sufficient to meet our anticipated cash
needs for at least the next 12&nbsp;months. Our future capital requirements will depend on many factors,
including our level of revenues, the timing and extent of spending to support product development
efforts, the expansion of our sales and marketing activities, the timing of introductions of new
products, competitive factors, the outcome of pending or future litigation and the level of
acceptance of our products in domestic and international markets. We could be required, or could
elect, to seek additional funding through public or private equity or debt financing and additional
funds may not be available on terms acceptable to us or at all.


<DIV align="left">
<A name="108"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 4. CONTROLS AND PROCEDURES</B>



<P align="left" style="font-size: 10pt"><I>Evaluation of disclosure
controls and procedures. </I><BR><BR>
Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered
by this Quarterly Report on Form 10-Q.  Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have
concluded that because the material weakness in internal control over financial reporting which was previously identified in Item 8A
of our Annual Report on Form 10-KSB/A for the year ended December 31,
2004 which was filed on May 23, 2005 (&#147;Amended 10-KSB&#148;), had not yet been remediated at March 31, 2005, our disclosure controls and procedures were ineffective as of March 31, 2005
to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934 (i) is
recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and
forms and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial
Officer, as appropriate to allow timely decisions regarding required disclosure.


<P align="left" style="font-size: 10pt">Subsequent to March 31, 2005, in response to the material weakness described above and in our Amended Form 10-KSB, our
management took actions to enhance the operation and effectiveness of our internal controls and procedures to ensure that we properly
classify and account for stock options as either incentive stock options or non-statutory stock options and that option exercises will
have the proper payroll taxes withheld  based on the classification of the option. These actions included reviewing the classification of
all previously issued options and creating detailed schedules to ensure that they were properly classified as incentive stock options or
non-statutory stock options and instituting additional procedures designed to ensure that any future option grants are properly
classified.  For grants that had components of incentive stock options and non-statutory stock options, the Company prepared roll-forward schedules to calculate the number of incentive stock option and non-statutory stock option shares available to exercise.  These
schedules were used to evaluate the impact of the error and will be used going forward to properly account for the stock option
exercises.  In addition, we are currently evaluating various stock option accounting software programs which would provide us with
additional assistance in tracking our stock option activity and the financial reporting of such activity.


<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left" style="font-size: 10pt">Restatement of Previously Issued Financial Statements
<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left" style="font-size: 10pt">On November 14, 2005, we concluded that our financial statements at March 31, 2005
and June 30, 2005 and for the periods then ended, included in our Form 10-Qs for the periods ended
March 31, 2005 and June 30, 2005, respectively, should no longer be relied upon due to an error
in those financial statements which resulted from the incorrect accrual of legal and professional fees and other
expenses for those periods. Beginning in the first quarter of 2005, we experienced a significant increase in outside
legal and other professional expenses. We determined that our internal controls surrounding the recording of
legal and professional fees in the appropriate accounting period were not operating effectively. Certain of
the invoices relating to the work performed were not received by our accounting department until after we had
closed our books and reported our financial results for such periods
due to delays on the part of third parties in delivering or
communicating such invoices to us. As a result, certain invoices were
recorded in the incorrect period. Correction of these errors resulted
in the shifting of expenses among the first three quarters of 2005
with expenses increasing in the first quarter of
2005 and decreasing in the second quarter of 2005 from the figures
included in the previously filed Form 10-Qs. There was a
corresponding decrease/increase in net income for the first and second quarters resulting from the change in expenses. The restatement had no impact on revenues for the periods.
<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left" style="font-size: 10pt">With respect to the restatement described above, we have determined that the errors resulted from an inadequate control over the accounting for
our legal and other professional fees and under standards established by the Public Company Accounting Oversight
Board constituted a &#147;material weakness&#148; in our internal control over financial reporting. We
have consulted with and advised our Audit Committee of our Board of Directors of our
determination.
<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left" style="font-size: 10pt">In response to the
deficiencies which resulted in the &#147;material weakness&#148; described
above, our management took actions to enhance the operation and effectiveness of our internal controls and procedures to
ensure that we properly account for our legal and other professional fees in the appropriate financial reporting period.
These actions included reviewing each of the invoices submitted by firms that provided legal and other
professional services to us and contacting outside legal and professional firms to obtain copies of any invoice
which has not been already paid to ensure that such amounts were recorded in the proper financial reporting
period.  In addition, we are currently implementing additional accounting controls such as setting up a special
email account for legal bills, preparing detailed analysis of legal and professional spending which will be
reviewed monthly, and sending out quarterly confirms to outside legal firms to confirm balances owed for
billed and unbilled services to help ensure that any such legal and other professional fees incurred in the future are
properly recorded in the appropriate fiscal period.  As of the date of the filing of this amended
Form 10-Q, certain of our remediation efforts were still being implemented.
<DIV align="left"><FONT size="1">

</FONT></DIV>


<P align="left" style="font-size: 10pt">In December 2005, we also identified another
&#147;material weakness&#148; in our internal control over financial
reporting in that we do not have adequate resources in accounting and
financial statement preparation particularly with respect to
financial statement footnote preparation. In response to this
deficiency, we plan to engage additional resources to assist with
such activities. We do not believe that this deficiency resulted in
any material errors in the reporting of our results of operations but
we concluded that there was more than a remote likelihood that a
material misstatement of our annual or interim financial statements
would not be prevented or detected in the future. We have consulted
with and advised our Audit Committee of our Board of Directors of our
determination of this material weakness. As of the date of this
filing of this Form&nbsp;10-Q, our remediation efforts were still
being implemented.

<P align="left" style="font-size: 10pt">In conjunction with our
decision to restate our financial statements and the identification
of the additional material weaknesses in our internal control over
financial reporting related to accounting for our legal and other
professional fees and our resources in accounting and financial
statement preparation, we have reevaluated our disclosure controls and
procedures, and our Chief Executive Officer and Chief Financial
Officer have concluded that these controls were not effective as
of March&nbsp;31, 2005. Our Chief Executive Officer and Chief
Financial Officer note that upon our discovery of the control
deficiencies described above related to accounting for our legal and
other professional fees and our resources in accounting and financial
statement preparation, the matters were promptly reported to the
appropriate officers of the Company, the Audit Committee of our Board
of Directors and our independent registered public accounting firm
and a Form&nbsp;8-K was filed, as applicable, in a timely manner in accordance with
our disclosure controls and procedures.</DIV>


<P align="left" style="font-size: 10pt"><I>Changes in internal
control over financial reporting.</I>

<P align="left" style="font-size: 10pt">There has not been any change in our internal control
over financial reporting during our quarter ended March 31, 2005 that has materially affected,
or is reasonably likely to materially affect, our internal control over financial reporting,
except as described above.




<P align="center" style="font-size: 10pt">19

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="109"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>PART II&#151;OTHER INFORMATION</B>


<DIV align="left">
<A name="110"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 1. LEGAL PROCEEDINGS</B>

<P align="left" style="font-size: 10pt"><B>Securities Litigation</B>
<P align="left" style="font-size: 10pt">On January&nbsp;10, 2005, a securities class action lawsuit was filed in the United States District
Court for the District of Arizona against the Company and certain of its officers and directors,
captioned Malasky v. TASER International, Inc., et al., Case No.&nbsp;2:05 CV 115. Since then, numerous
other securities class action lawsuits were filed against the Company and certain of its officers
and directors. The majority of these lawsuits were filed in the District of Arizona. Four actions
were filed in the United States District Court for the Southern District of New York and one in the
Eastern District of Michigan. The New York and Michigan actions were transferred to the District of
Arizona. The cases were recently consolidated and the court is considering
various motions for lead plaintiff. Pursuant to an order entered by the court, defendants need not
respond to any of the complaints originally filed in these actions. Plaintiffs will file an amended
consolidated complaint after lead plaintiff and lead counsel are chosen. Defendants will then
respond to the amended consolidated complaint.


<P align="left" style="font-size: 10pt">These actions are filed on behalf of the purchasers of the Company&#146;s stock in various class
periods, beginning as early as May&nbsp;29, 2003 and ending as late as January&nbsp;14, 2005. The complaints
allege, among other things, violations of Section 10(b) of the Securities Exchange Act of 1934, as
amended, and Rule&nbsp;10b-5, promulgated thereunder, and seek unspecified monetary damages and other
relief against all defendants. The complaints allege generally that the Company and the individual
defendants made false or misleading public statements regarding, among other things, the safety of
the Company&#146;s products and the Company&#146;s ability to meet its sales goals, including the validity of
a $1.5&nbsp;million sales order with one of the Company&#146;s
distributors in the fourth quarter of 2004. We intend to defend these
lawsuits vigorously, however, the outcome of any litigation is
inherently uncertain and there can be no assurance that any liability
that may ultimately result from the resolution of these matters will
not be in excess of amounts provided by insurance coverage and will
not have amaterial adverse effect on our business, operating results
or financial condition.


<P align="left" style="font-size: 10pt"><B>Shareholder Derivative Litigation</B>


<P align="left" style="font-size: 10pt">On January&nbsp;11, 2005, a shareholder derivative lawsuit was filed in the United States District Court
for the District of Arizona purportedly on behalf of the Company and against certain of its
officers and directors, captioned Goldfine v. Culver, et al., Case No.&nbsp;2:05 CV 123. Since then,
five other shareholder derivative lawsuits were filed in the District of Arizona, two shareholder
derivative lawsuits were filed in the Arizona Superior Court, Maricopa County, and one shareholder
derivative lawsuit was filed in the Delaware Chancery Court. On February&nbsp;9, 2005, the shareholder
derivative actions pending in federal court were consolidated into a single action under the
caption, In re TASER International Shareholder Derivative Litigation, Case No.&nbsp;2:05 CV 123.
Pursuant to the consolidating order, defendants will not respond to any of the complaints
originally in these actions. Instead, defendants will respond to plaintiffs&#146; consolidated amended
complaint. The derivative actions in Arizona state court were consolidated and plaintiffs filed a
consolidated complaint. Defendants have not yet responded to the consolidated complaint. On April
8, 2005, defendants filed a motion to stay or, in the alternative, dismiss the Delaware derivative
action; plaintiff&#146;s opposition to defendants&#146; motion is due to be filed on July&nbsp;5, 2005.


<P align="left" style="font-size: 10pt">The complaints in the shareholder derivative lawsuits generally allege that the defendants breached
the fiduciary duties owed to the Company and its shareholders by reason of their positions as
officers and/or directors of the Company. The complaints claim that such duties were breached by
defendants&#146; disclosure of allegedly false or misleading statements about the safety and
effectiveness of Company products and the Company&#146;s financial prospects. The complaints also claim
that fiduciary duties were breached by defendants&#146; alleged use of non-public information regarding
the safety of Company products and the Company&#146;s financial condition and future business prospects
for personal gain through the sale of the Company&#146;s stock. The Company is named solely as a nominal
defendant against which no recovery is sought.


<P align="left" style="font-size: 10pt">On May&nbsp;4, 2005, a lawsuit was filed in the Delaware Chancery Court against the Company, captioned
Lucian B. Dinkens v. TASER International, Inc., Case No.&nbsp;5749754, to compel the Company to give the
plaintiff the right to inspect and copy certain books and records of the Company pursuant to
Section&nbsp;220 of Delaware General Corporation Law. The Company is in the process of reviewing the
complaint.


<P align="left" style="font-size: 10pt"><B>Securities and Exchange Commission Informal Inquiry</B>


<P align="left" style="font-size: 10pt">In December&nbsp;2004, the Company was informed that the staff of the Securities and Exchange Commission
had commenced an informal inquiry, which concerns the basis for the Company&#146;s public statements
regarding the safety and performance of the Company&#146;s products, certain disclosure issues, and the
accounting for certain transactions. The inquiry is ongoing.



<P align="center" style="font-size: 10pt">20
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><B>Contract Litigation</B>


<P align="left" style="font-size: 10pt">In March&nbsp;2000, Thomas N. Hennigan, a distributor of our products from late 1997 through early 2000,
sued us in the United States District Court, Southern District of New York. We had previously sued
him in February&nbsp;2000 but had not served him. After the New York case was dismissed in February&nbsp;2001
for lack of personal jurisdiction, Mr.&nbsp;Hennigan brought a counterclaim in the United States
District Court for the District of Arizona. Mr.&nbsp;Hennigan claims the exclusive right to sell our
products to many of the largest law enforcement, corrections, and military agencies in the United
States. He seeks monetary damages that may amount to as much as $400&nbsp;million against us allegedly
arising in connection with his service to us as a distributor. His claims rest on theories of our
failure to pay commissions, breach of contract, promissory estoppel, breach of fiduciary duty, and
on related theories. No written contract was ever signed with Mr.&nbsp;Hennigan. We also believe that he
has no reasonable basis for claims based on informal or implied contractual rights and will be
unable to prove his damages with reasonable certainty. Mr.&nbsp;Hennigan died in April&nbsp;2001 and the case
is now being prosecuted by his estate. On May&nbsp;24, 2002, H.A. Russell was permitted to proceed as an
additional defendant-counterclaimant. The Company filed various motions in November&nbsp;2002 for
partial summary judgment including a motion to dismiss his claims. On September&nbsp;30, 2003, the Court
issued an order granting the Company&#146;s motion for partial summary judgment to dismiss Mr.&nbsp;Russell&#146;s
claims and struck Hennigan&#146;s jury demand. On April&nbsp;14, 2004, the Court issued an opinion partially
granting the Company&#146;s motion for partial summary judgment on certain joint venture,
post-termination, post-death and exclusivity claims. A pretrial conference was held on February&nbsp;18,
2005 and no trial date has been set.


<P align="left" style="font-size: 10pt">In September&nbsp;2004, the Company was served with a summons and complaint in the matter of Roy Tailors
Uniform Co., Inc. v. TASER International in which the plaintiff alleges that it is entitled to
commissions for disputed sales that were made to customers that are claimed to be plaintiff&#146;s
customers for which plaintiff is seeking monetary damages. Plaintiff failed to sign a distributor
agreement with the Company and did not have distribution rights with the Company. This case is in
the discovery phase and a trial date has not been set.

<P align="left" style="font-size: 10pt">We intend to defend the
foregoing lawsuits vigorously, however, the outcome of any litigation
is inherently uncertain and there can be no assurance that any
liability that may ultimately result from the resolution of these
matters will not be in excess of amounts provided by insurance
coverage and will not have a material adverse effect on our business,
operating results or financial condition.

<P align="center" style="font-size: 10pt">21
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt"><B>Product Liability Litigation</B>


<P align="left" style="font-size: 10pt">From April&nbsp;2003 to
May&nbsp;2005, the Company was named as a defendant in 21 lawsuits in which the
plaintiffs alleged either wrongful death or personal injury in situations in which the TASER device
was used by law enforcement officers or during training exercises. One case has been dismissed with
prejudice, another case has been dismissed without prejudice but has been refiled, but not served,
and the balance of the cases are pending. With respect to each of
these 21 cases, the table below
lists the name of plaintiff, the date the Company was served with process, the jurisdiction in
which the case is pending, the type of claim and the status of the matter. In each of these
lawsuits, the plaintiff is seeking monetary damages from the Company. We have submitted the defense
of each of these lawsuits to our insurance carriers as we maintained during these periods and
continue to maintain product liability insurance coverage with varying limits and deductibles. The
Company&#146;s product liability insurance coverage during these periods ranged from $5,000,000 to
$10,000,000 in coverage limits and from $10,000 to $250,000 in deductibles. The Company is
defending each of these lawsuits vigorously. Although the Company does not expect the outcome in
any individual case to be material, the outcome of any litigation is inherently uncertain and there
can be no assurance that any liability that may ultimately result from the resolution of these
matters will not be in excess of amounts provided by insurance coverage and will not have a
material adverse effect on our business, operating results or financial condition.


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="15%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="24%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Month</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="CENTER" style="border-bottom: 1px solid #000000"><B>Plaintiff</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Served</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Jurisdiction</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Claim Type</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Status</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Del&#146;Ostia</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3/2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">US District Court, SD FL</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wrongful Death</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Dismissed With Prejudice</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Alvarado</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4/2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">CA Superior Court</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wrongful Death</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">City of Madera</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6/2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">CA Superior Court</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wrongful Death</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Borden</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9/2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">US District Court, SD IN</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wrongful Death</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Thompson</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9/2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">MI Circuit Court</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wrongful Death</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Pierson</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11/2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">US District Court, CD CA</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wrongful Death</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Glowczenski</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10/2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">US District Court, ED NY</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wrongful Death</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">LeBlanc</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12/2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">US District Court, CD CA</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wrongful Death</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Elsholtz</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12/2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">TX District Court</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wrongful Death</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Kerchoff</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6/2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">US District Court, ED MI</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Training Injury</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Dismissed, Refiled but not served</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Powers</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11/2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">AZ Superior Court</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Training Injury</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">June 2005 Trial Scheduled</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Cook</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8/2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">NV District Court</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Training Injury</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Stevens</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10/2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">OH Court Common Pleas</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Training Injury</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Eckenroth</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11/2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">AZ Superior Court</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Training Injury</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Lipa</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2/2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">MI Circuit Court</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Training Injury</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Dimiceli</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3/2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">FL Circuit Court</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Training Injury</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Cosby</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8/2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">US District Court, SD NY</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Injury During Arrest</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Blair</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3/2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">US District Court, MD NC</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Injury During Detention</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Madrigal</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5/2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">AZ Superior Court</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wrongful Death</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Washington</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5/2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">US District Court, ED CA</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wrongful Death</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>


<TR valign="bottom" style="background: #cceeff">

<TD align="right"><DIV style="margin-left:15px; text-indent:-15px">Clark</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5/2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">US District Court, ND TX</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wrongful Death</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Discovery Phase</TD>
</TR>


<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt"><B>Other Litigation</B>


<P align="left" style="font-size: 10pt">In January&nbsp;2005, the Company filed litigation in U.S. District Court for the Western District of
North Carolina against Stinger Systems, Inc. and Robert Gruder alleging false advertising and a
violation of the Lanham Act. The defendants have filed a counterclaim against the Company alleging
defamation. This case is in the discovery phase and no trial date has been set.


<P align="left" style="font-size: 10pt">In February&nbsp;2005, the Company filed litigation in Superior Court for Maricopa County, Arizona
against its former patent attorney, Thomas G. Watkins III, alleging breach of fiduciary duty and
estoppel arising out of ownership and inventorship claims Mr.&nbsp;Watkins has made against a patent he
filed for the Company for certain technology utilized in the TASER X26 product. This case is in the
discovery phase and no trial date has been set.



<P align="left" style="font-size: 10pt">We intend to pursue and
defend the foregoing lawsuits vigorously, however, the outcome of any
litigation is inherently uncertain and there can be no assurance that
any liability that may ultimately result from the resolution of these
matters will not be in excess of amounts provided by insurance
coverage and will not have a material adverse effect on our business,
operating results or financial condition.




<P align="center" style="font-size: 10pt">22
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="111"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 6. EXHIBITS</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Executive Officer Certification pursuant to Rule&nbsp;13a-14(a) under the Securities Exchange Act of 1934.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Financial Officer Certification pursuant to Rule&nbsp;13a-14(a) under the Securities Exchange Act of 1934.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">32.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Executive Officer Certification pursuant to U.S.C. Section&nbsp;1350 as adopted pursuant to Section&nbsp;906
of the Sarbanes-Oxley Act of 2002</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">32.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Financial Officer Certification pursuant to U.S.C. Section&nbsp;1350 as adopted pursuant to Section&nbsp;906
of the Sarbanes-Oxley Act of 2002.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">99.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certain Factors to Consider in Connection with Forward-Looking Statements</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">23
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="112"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>SIGNATURES</B>


<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left" style="font-size: 10pt">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this amended report on Form 10-Q/A (Amendment No. 1)to be signed on its behalf by the undersigned, thereunto duly authorized.
<DIV align="left"><FONT size="1">

</FONT></DIV>



<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">TASER INTERNATIONAL, INC.<BR>
(Registrant)<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><DIV align="left"><FONT size="1">

</FONT></DIV></TR></TD>

<TR>
    <TD align="left">Date: January&nbsp;13, 2006&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/ Patrick W. Smith
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><DIV align="left"><FONT size="1">

</FONT></DIV></TR></TD>

<TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Patrick W. Smith,&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Chief Executive Officer<BR>
(Principal Executive Officer)&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><DIV align="left"><FONT size="1">

</FONT></DIV></TR></TD>

<TR>
    <TD align="left">Date: January&nbsp;13, 2006,&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/ Daniel M. Behrendt
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><DIV align="left"><FONT size="1">

</FONT></DIV></TR></TD>

<TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Daniel M. Behrendt&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Chief Financial Officer<BR>
(Principal Financial and Accounting Officer)&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt">24
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="113"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>Index to Exhibits</B>



<P align="left" style="font-size: 10pt">Exhibits:


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Executive Officer Certification pursuant to Rule&nbsp;13a-14(a) under the Securities exchange Act of 1934.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Financial Officer Certification pursuant to Rule&nbsp;13a-14(a) under the Securities exchange Act of 1934.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">32.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Executive Officer Certification pursuant to U.S.C. Section&nbsp;1350 as adopted pursuant to Section&nbsp;906
of the Sarbanes-Oxley Act of 2002.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">32.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Financial Officer Certification pursuant to U.S.C. Section&nbsp;1350 as adopted pursuant to Section&nbsp;906
of the Sarbanes-Oxley Act of 2002.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">25
</DIV>


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<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>2
<FILENAME>p71599exv31w1.htm
<DESCRIPTION>EX-31.1
<TEXT>
<HTML>
<HEAD>
<TITLE>exv31w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<DIV style="font-family: 'Times New Roman',Times,serif">



<P align="right" style="font-size: 10pt"><B>Exhibit&nbsp;31.1</B>



<P align="center" style="font-size: 10pt"><B>CERTIFICATION PURSUANT TO<BR>
RULE 13a-14(a) UNDER THE<BR>
SECURITIES EXCHANGE ACT OF 1934</B>



<P align="left" style="font-size: 10pt">I, Patrick W. Smith, principal executive officer, certify that:



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR><TD><DIV align="left"><FONT size="1">

</FONT></DIV></TR></TD>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">1.&nbsp;&nbsp;</TD>
    <TD>I have reviewed this Quarterly Report on Form 10-Q/A
(Amendment No. 1) of TASER International, Inc., for the period ended March&nbsp;31, 2005;</TD>
</TR>

<TR><TD><DIV align="left"><FONT size="1">

</FONT></DIV></TR></TD>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">2.&nbsp;&nbsp;</TD>
    <TD>Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">3.&nbsp;&nbsp;</TD>
    <TD>Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">4.&nbsp;&nbsp;</TD>
    <TD>The registrant&#146;s other certifying officer(s) and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules&nbsp;13a-15(e) and 15d-15(e)) for the registrant and have:</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(a)&nbsp;&nbsp;</TD>
    <TD>Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under
our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities,
particularly during the period in which this report is being
prepared;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(b)&nbsp;&nbsp;</TD>
    <TD>Evaluated the effectiveness of the registrant&#146;s disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered
by this report based on such evaluation; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(c)&nbsp;&nbsp;</TD>
    <TD>Disclosed in this report any change in the registrant&#146;s
internal control over financial reporting that occurred
during the registrant&#146;s most recent fiscal quarter that has
materially affected, or is reasonably likely to materially
affect, the registrant&#146;s internal control over financial
reporting;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">5.&nbsp;&nbsp;</TD>
    <TD>The registrant&#146;s other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant&#146;s auditors
and the audit committee of the registrant&#146;s board of directors
(or persons performing the equivalent functions):</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(a)&nbsp;&nbsp;</TD>
    <TD>All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant&#146;s ability
to record, process, summarize and report financial information;
and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(b)&nbsp;&nbsp;</TD>
    <TD>Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant&#146;s
internal control over financial reporting.</TD>
</TR>

</TABLE>



<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top" colspan="5"><DIV align="left"><FONT size="1">

</FONT></DIV></TD>
</TR>
<TR>
    <TD align="left">Date: January&nbsp;13, 2006&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/Patrick W. Smith
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD align="left"><DIV align="left"><FONT size="1">

</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Patrick W. Smith&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Chief Executive Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>



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</DIV>

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<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>3
<FILENAME>p71599exv31w2.htm
<DESCRIPTION>EX-31.2
<TEXT>
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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="right" style="font-size: 10pt"><B>Exhibit&nbsp;31.2</B>



<P align="center" style="font-size: 10pt"><B>CERTIFICATION PURSUANT TO<BR>
RULE 13a-14(a) UNDER THE<BR>
SECURITIES EXCHANGE ACT OF 1934</B>



<P align="left" style="font-size: 10pt">I, Daniel M. Behrendt, principal financial officer, certify that:



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR><TD><DIV align="left"><FONT size="1">

</FONT></DIV></TR></TD>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">1.&nbsp;&nbsp;</TD>
    <TD>I have reviewed this Quarterly Report on Form 10-Q/A
(Amendment No. 1) of TASER International, Inc., for the period ended March&nbsp;31, 2005;</TD>
</TR>

<TR><TD><DIV align="left"><FONT size="1">

</FONT></DIV></TR></TD>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">2.&nbsp;&nbsp;</TD>
    <TD>Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">3.&nbsp;&nbsp;</TD>
    <TD>Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">4.&nbsp;&nbsp;</TD>
    <TD>The registrant&#146;s other certifying officer(s) and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules&nbsp;13a-15(e) and 15d-15(e)) for the registrant and have:</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(a)&nbsp;&nbsp;</TD>
    <TD>Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under
our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities,
particularly during the period in which this report is being
prepared;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(b)&nbsp;&nbsp;</TD>
    <TD>Evaluated the effectiveness of the registrant&#146;s disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered
by this report based on such evaluation; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(c)&nbsp;&nbsp;</TD>
    <TD>Disclosed in this report any change in the registrant&#146;s
internal control over financial reporting that occurred
during the registrant&#146;s most recent fiscal quarter that has
materially affected, or is reasonably likely to materially
affect, the registrant&#146;s internal control over financial
reporting;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">5.&nbsp;&nbsp;</TD>
    <TD>The registrant&#146;s other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant&#146;s auditors
and the audit committee of the registrant&#146;s board of directors
(or persons performing the equivalent functions):</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(a)&nbsp;&nbsp;</TD>
    <TD>All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant&#146;s ability
to record, process, summarize and report financial information;
and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(b)&nbsp;&nbsp;</TD>
    <TD>Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant&#146;s
internal control over financial reporting.</TD>
</TR>

</TABLE>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><DIV align="left"><FONT size="1">

</FONT></DIV></TR></TD>

<TR>
    <TD align="left">Date: January&nbsp;13, 2006&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/Daniel M. Behrendt
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><DIV align="left"><FONT size="1">

</FONT></DIV></TR></TD>

<TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Daniel M. Behrendt&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>4
<FILENAME>p71599exv32w1.htm
<DESCRIPTION>EX-32.1
<TEXT>
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<TITLE>exv32w1</TITLE>
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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="right" style="font-size: 10pt"><B>EXHIBIT 32.1</B>



<P align="center" style="font-size: 10pt"><B>CERTIFICATION PURSUANT TO<BR>
18 U.S.C. SECTION 1350<BR>
AS ADOPTED PURSUANT TO<BR>
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</B>


<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left" style="font-size: 10pt">In connection with the
Quarterly Report of TASER International, Inc. (the
&#147;Company&#148;) on Form 10-Q/A (Amendment No. 1)
for the period ending March&nbsp;31, 2005 as filed with the Securities and Exchange Commission on the
date hereof (the &#147;Report&#148;), I, Patrick W. Smith, Chief Executive Officer of the Company, certify
pursuant to 18 U.S.C. Section&nbsp;1350, as adopted pursuant to Section&nbsp;906 of the Sarbanes-Oxley Act of
2002, that:
<DIV align="left"><FONT size="1">

</FONT></DIV>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">(1)&nbsp;&nbsp;</TD>
    <TD>The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">(2)&nbsp;&nbsp;</TD>
    <TD>The information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.</TD>
</TR>

</TABLE>


<DIV align="left"><FONT size="1">

</FONT></DIV>
<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">                              /s/Patrick W. Smith
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Patrick W. Smith&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Chief Executive Officer<BR>
January&nbsp;13, 2006&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
</TABLE>
<DIV align="left"><FONT size="1">

</FONT></DIV>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>5
<FILENAME>p71599exv32w2.htm
<DESCRIPTION>EX-32.2
<TEXT>
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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="right" style="font-size: 10pt"><B>EXHIBIT 32.2</B>



<P align="center" style="font-size: 10pt"><B>CERTIFICATION PURSUANT TO<BR>
18 U.S.C. SECTION 1350<BR>
AS ADOPTED PURSUANT TO<BR>
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</B>




<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
connection with the Quarterly Report of TASER International, Inc.
(the &#147;Company&#148;) on Form 10-Q/A (Amendment No. 1)
for the period ending March&nbsp;31, 2005 as filed with the Securities and Exchange Commission on the
date hereof (the &#147;Report&#148;), I, Daniel M. Behrendt, Chief Financial Officer of the Company, certify
pursuant to 18 U.S.C. Section&nbsp;1350, as adopted pursuant to Section&nbsp;906 of the Sarbanes-Oxley Act of
2002, that:
<DIV align="left"><FONT size="1">

</FONT></DIV>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">(1)&nbsp;&nbsp;</TD>
    <TD>The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">(2)&nbsp;&nbsp;</TD>
    <TD>The information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.</TD>
</TR>

</TABLE>


<DIV align="left"><FONT size="1">

</FONT></DIV>
<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">                              /s/Daniel M. Behrendt
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Daniel M. Behrendt&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Chief Financial Officer<BR>
January&nbsp;13, 2006&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>6
<FILENAME>p71599exv99w1.htm
<DESCRIPTION>EX-99.1
<TEXT>
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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="right" style="font-size: 10pt"><B>EXHIBIT 99.1</B>



<P align="center" style="font-size: 10pt"><B>CERTAIN FACTORS TO CONSIDER IN CONNECTION<BR>
WITH FORWARD-LOOKING STATEMENTS</B>


<P align="left" style="font-size: 10pt">From time to time, TASER International, Inc. (&#147;TASER&#148; or the &#147;Company&#148;), through its management,
may make forward-looking public statements with respect to the Company regarding, among other
things, expected future revenues or earnings, projections, plans, future performance, product
development and commercialization, and other estimates relating to the Company&#146;s future operations.
Forward-looking statements may be included in reports filed under the Securities Exchange Act of
1934, as amended (the &#147;Exchange Act&#148;), in press releases, other written statements, or in oral
statements. The words or phrases &#147;will likely result,&#148; &#147;are expected to,&#148; &#147;intends,&#148; &#147;is
anticipated,&#148; &#147;estimates,&#148; &#147;believes,&#148; &#147;projects&#148; or similar expressions are intended to identify
&#147;forward-looking statements&#148; within the meaning of Section&nbsp;21E of the Exchange Act and Section&nbsp;27A
of the Securities Act of 1933, as amended, as enacted by the Private Securities Litigation Reform
Act of 1995.


<P align="left" style="font-size: 10pt">Forward-looking statements are subject to a number of risks and uncertainties. The Company cautions
investors not to place undue reliance on its forward-looking statements, which speak only as of the
date on which they are made. TASER&#146;s actual results may differ materially from those described in
the forward-looking statements as a result of various factors, including those listed below. The
Company disclaims any obligation subsequently to revise or update forward-looking statements to
reflect events or circumstances after the date of such statements or to reflect the occurrence of
anticipated or unanticipated events.


<P align="left" style="font-size: 10pt">Pursuant to the &#147;safe harbor&#148; provisions of the Private Securities Litigation Reform Act of 1995,
TASER hereby files the following cautionary statements identifying certain factors that could cause
its actual results to differ materially from those described in its forward-looking statements.


<P align="left" style="font-size: 10pt">WE ARE MATERIALLY DEPENDENT ON ACCEPTANCE OF OUR PRODUCTS BY THE LAW ENFORCEMENT AND CORRECTIONS
MARKET, AND IF LAW ENFORCEMENT AND CORRECTIONS AGENCIES DO NOT PURCHASE OUR PRODUCTS, OUR REVENUES
WILL BE ADVERSELY AFFECTED AND WE MAY NOT BE ABLE TO EXPAND INTO OTHER MARKETS.


<P align="left" style="font-size: 10pt">A substantial number of law enforcement and corrections agencies may not purchase our conducted
energy, non-lethal devices. In addition, if our products are not widely accepted by the law
enforcement and corrections market, we may not be able to expand sales of our products into other
markets. Law enforcement and corrections agencies may be influenced by claims or perceptions that
conducted energy weapons are unsafe or may be used in an abusive manner. In addition, earlier
generation conducted energy devices may have been perceived as ineffective. Sales of our products
to these agencies may also be delayed or limited by these claims or perceptions.


<P align="left" style="font-size: 10pt">WE SUBSTANTIALLY DEPEND ON SALES OF THE ADVANCED TASER PRODUCTS AND TASER X26 PRODUCTS, AND IF
THESE PRODUCTS ARE NOT WIDELY ACCEPTED, OUR GROWTH PROSPECTS WILL BE DIMINISHED.


<P align="left" style="font-size: 10pt">In 2003, 2004 and the first quarter of 2005, we derived our revenues predominantly from sales of
the TASER brand devices and related cartridges, and expect to depend on sales of these products for
the foreseeable future. A decrease in the prices of or demand for these products, or their failure
to achieve broad market acceptance, would significantly harm our growth prospects, operating
results and financial condition.


<P align="left" style="font-size: 10pt">IF WE ARE UNABLE TO MANAGE OUR PROJECTED GROWTH, OUR GROWTH PROSPECTS MAY BE LIMITED AND OUR FUTURE
PROFITABILITY MAY BE ADVERSELY AFFECTED.


<P align="left" style="font-size: 10pt">We intend to expand our sales and marketing programs. Any significant expansion may strain our
managerial, financial and other resources. If we are unable to manage our growth, our business, our
operating results and financial condition could be adversely affected. We will need to continually
improve our operations, financial and other internal systems to manage our growth effectively, and
any failure to do so may lead to inefficiencies and redundancies, and result in reduced growth
prospects and profitability.


<P align="left" style="font-size: 10pt">WE MAY FACE PERSONAL INJURY, WRONGFUL DEATH AND OTHER LIABILITY CLAIMS THAT HARM OUR REPUTATION AND
ADVERSELY AFFECT OUR SALES AND FINANCIAL CONDITION.


<P align="left" style="font-size: 10pt">Our products are often used in aggressive confrontations that may result in serious, permanent
bodily injury or death to those involved. Our products may cause or be associated with these
injuries. A person injured in a confrontation or otherwise in connection with the use of our
products may bring legal action against us to recover damages on the basis of theories including
personal injury, wrongful death, negligent design, dangerous product or inadequate warning. We are
currently subject to a number of such lawsuits. We may also be subject to lawsuits involving
allegations of misuse of our products. If successful, personal injury, misuse and other claims
could have a material adverse effect on our operating results and financial condition. Although we
carry product liability insurance, significant litigation could also result in a diversion of
management&#146;s attention and resources, negative publicity and an award of monetary damages in excess
of our insurance coverage. The outcome of any litigation is inherently uncertain and there can be
no assurance that our existing or any future litigation will not have a material adverse effect on
our revenues, our financial condition or financial results.


<P align="left" style="font-size: 10pt">PENDING LITIGATION MAY SUBJECT US TO SIGNIFICANT LITIGATION COSTS, JUDGEMENTS IN EXCESS OF

<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="left" style="font-size: 10pt">INSURANCE COVERAGE, AND DIVERT MANAGEMENT ATTENTION FROM OUR BUSINESS.


<P align="left" style="font-size: 10pt">The Company is involved in several litigation matters relating to its products or the use of such
products, as well as shareholder class actions and an informal inquiry by the Securities and
Exchange Commission. Such matters could result in substantial costs to the Company and a likely
diversion of our management&#146;s attention, which could adversely affect our Company&#146;s business,
financial condition or operating results.


<P align="left" style="font-size: 10pt">OUR FUTURE SUCCESS IS DEPENDENT ON OUR ABILITY TO EXPAND SALES THROUGH DISTRIBUTORS AND OUR
INABILITY TO RECRUIT NEW DISTRIBUTORS WOULD NEGATIVELY AFFECT OUR SALES.


<P align="left" style="font-size: 10pt">Our distribution strategy is to pursue sales through multiple channels with an emphasis on
independent distributors. Our inability to recruit and retain police equipment distributors who can
successfully sell our products would adversely affect our sales. In addition, our arrangements with
our distributors are generally short-term. If we do not competitively price our products, meet the
requirements of our distributors or end-users, provide adequate marketing support, or comply with
the terms of our distribution arrangements, our distributors may fail to aggressively market our
products or may terminate their relationships with us. These developments would likely have a
material adverse effect on our sales. Our reliance on the sales of our products by others also
makes it more difficult to predict our revenues, cash flow and operating results.


<P align="left" style="font-size: 10pt">WE EXPEND SIGNIFICANT RESOURCES IN ANTICIPATION OF A SALE DUE TO OUR LENGTHY SALES CYCLE AND MAY
RECEIVE NO REVENUE IN RETURN.


<P align="left" style="font-size: 10pt">Generally, law enforcement and corrections agencies consider a wide range of issues before
committing to purchase our products, including product benefits, training costs, the cost to use
our products in addition to or in place of other non-lethal products, product reliability and
budget constraints. The length of our sales cycle may range from a few weeks to as long as several
years. Adverse publicity surrounding our products or the safety of such products has in the past
and could in the future lengthen our sales cycle with customers. In particular, our revenue was
down substantially in the first quarter of 2005 compared to the fourth quarter of 2004 due to the
adverse effect on customers and potential customers of the negative publicity surrounding our
products or use of our products. We may incur substantial selling costs and expend significant
effort in connection with the evaluation of our products by potential customers before they place
an order. If these potential customers do not purchase our products, we will have expended
significant resources and received no revenue in return.


<P align="left" style="font-size: 10pt">MOST OF OUR END-USERS ARE SUBJECT TO BUDGETARY AND POLITICAL CONSTRAINTS THAT MAY DELAY OR
PREVENT SALES.


<P align="left" style="font-size: 10pt">Most of our end-user customers are government agencies. These agencies often do not set their own
budgets and therefore have little control over the amount of money they can spend. In addition,
these agencies experience political pressure that may dictate the manner in which they spend money.
As a result, even if an agency wants to acquire our products, it may be unable to purchase them due
to budgetary or political constraints. Some government agency orders may also be canceled or
substantially delayed due to budgetary, political or other scheduling delays which frequently occur
in connection the acquisition of products by such agencies.


<P align="left" style="font-size: 10pt">GOVERNMENT REGULATION OF OUR PRODUCTS MAY ADVERSELY AFFECT SALES.


<P align="left" style="font-size: 10pt">Federal regulation of sales in the United States: Our devices are not firearms regulated by the
Bureau of Alcohol, Tobacco, Firearms and Explosives, but are consumer products regulated by the
United States Consumer Product Safety Commission. Although there are currently no federal laws
restricting sales of our devices in the United States, future federal regulation could adversely
affect sales of our products.


<P align="left" style="font-size: 10pt">Federal regulation of international sales: Our devices are controlled as a &#147;crime control&#148; product
by the United States Department of Commerce, or DOC, for export directly from the United States.
Consequently, we must obtain an export license from the DOC for the export of our devices from the
United States other than to Canada. Our inability to obtain DOC export licenses on a timely basis
for sales of our devices to our international customers could significantly and adversely affect
our international sales.


<P align="left" style="font-size: 10pt">State and local regulation: Our devices are controlled, restricted or their use prohibited by
several state and local governments. Our devices are banned from private citizen sale or use in
seven states: New York, New Jersey, Rhode Island, Michigan, Wisconsin, Massachusetts and Hawaii.
Law enforcement use of our products is also prohibited in New Jersey, and Rhode Island. Some
municipalities, including Omaha, Nebraska and Washington, D.C. also prohibit private citizen use of
our products. Other jurisdictions may ban or restrict the sale of our products and our product
sales may be significantly affected by additional state, county and city governmental regulation.


<P align="left" style="font-size: 10pt">Foreign regulation. Certain foreign jurisdictions, including Japan, Australia, Italy and Hong Kong, prohibit the sale of conducted energy devices, limiting our
international sales opportunities.


<P align="left" style="font-size: 10pt">IF WE ARE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY, WE MAY LOSE A COMPETITIVE ADVANTAGE OR INCUR
SUBSTANTIAL LITIGATION COSTS TO PROTECT OUR RIGHTS.



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<P align="left" style="font-size: 10pt">Our future success depends in part upon our proprietary technology. Our protective measures,
including patents, trademarks and trade secret laws, may prove inadequate to protect our
proprietary rights. Our United States patent on the construction of the gas cylinder used to store
the compress nitrogen in our cartridges expires in 2015. Our patent on the process by which
compressed gases launch the probes in our cartridges expires in 2009. The scope of any patent to
which we have or may obtain rights may not prevent others from developing and selling competing
products. The validity and breadth of claims covered in technology patents involve complex legal
and factual questions, and the resolution of such claims may be highly uncertain, lengthy and
expensive. In addition, our patents may be held invalid upon challenge, others may claim rights in
or ownership of our patents.


<P align="left" style="font-size: 10pt">WE MAY BE SUBJECT TO INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS, WHICH WILL CAUSE US TO INCUR
LITIGATION COSTS AND DIVERT MANAGEMENT ATTENTION FROM OUR BUSINESS.


<P align="left" style="font-size: 10pt">Any intellectual property infringement claims against us, with or without merit, could be costly
and time-consuming to defend and divert our management&#146;s attention from our business. If our
products were found to infringe a third party&#146;s proprietary rights, we could be required to enter
into royalty or licensing agreements in order to be able to sell our products. Royalty and
licensing agreements, if required, may not be available on terms acceptable to us or at all.


<P align="left" style="font-size: 10pt">In early April&nbsp;2001, a patent licensee sued us in the United District Court, Central District of
California. The lawsuit alleges that certain technology used in the firing mechanism for our
devices infringes upon a patent for which the licensee holds a license, and seeks injunctive relief
and unspecified monetary damages. While the court awarded summary judgment in our favor, the
plaintiff has filed a notice of appeal. An outcome that is adverse to us, costs associated with
defending the lawsuit, and the diversion of management&#146;s time and resources as a result of the
claim could harm our business and our financial condition.


<P align="left" style="font-size: 10pt">COMPETITION IN THE LAW ENFORCEMENT AND CORRECTIONS MARKET COULD REDUCE OUR SALES AND PREVENT US
FROM ACHIEVING PROFITABILITY.


<P align="left" style="font-size: 10pt">The law enforcement and corrections market is highly competitive. We face competition from numerous
larger, better capitalized and more widely known companies that make other non-lethal devices and
products. Increased competition may result in greater pricing pressure, lower gross margins and
reduced sales. In this regard, two different competitors plan to introduce new products in the
second quarter of 2005. We are unable to predict the impact such products will have on our sales or
our sales cycle, but existing or potential customers may evaluate such products which could
lengthen our sales cycle and potentially reduce future sales.


<P align="left" style="font-size: 10pt">DEFECTS IN OUR PRODUCTS COULD REDUCE DEMAND FOR OUR PRODUCTS AND RESULT IN A LOSS OF SALES, DELAY
IN MARKET ACCEPTANCE AND INJURY TO OUR REPUTATION.


<P align="left" style="font-size: 10pt">Complex components and assemblies used in our products may contain undetected defects that are
subsequently discovered at any point in the life of the product. In 2002, we recalled a series of
ADVANCED TASER devices due to a defective component. In connection with the recall, we incurred
expenses of approximately $25,000. Defects in our products may result in a loss of sales, delay in
market acceptance and injury to our reputation and increased warranty costs.


<P align="left" style="font-size: 10pt">COMPONENT SHORTAGES COULD RESULT IN OUR INABILITY TO PRODUCE VOLUME TO ADEQUATELY SUSTAIN CUSTOMER
DEMAND. THIS COULD RESULT IN A LOSS OF SALES, DELAY IN DELIVERIES AND INJURY TO OUR REPUTATION.


<P align="left" style="font-size: 10pt">Single source components used in the manufacture of our products may become unavailable or
discontinued. Delays caused by industry allocations, or obsolescence may take weeks or months to
resolve. In some cases, part obsolescence may require a product re-design to ensure quality
replacement circuits. These delays could cause significant delays in manufacturing and loss of
sales, leading to adverse effects significantly impacting our financial condition or results of
operations.


<P align="left" style="font-size: 10pt">OUR REVENUES AND OPERATING RESULTS MAY FLUCTUATE UNEXPECTEDLY FROM QUARTER TO QUARTER, WHICH MAY
CAUSE OUR STOCK PRICE TO DECLINE.


<P align="left" style="font-size: 10pt">Our revenues and operating results have varied significantly in the past and may vary significantly
in the future due to various factors, including, but not limited to: increased raw material
expenses, changes in our operating expenses, market acceptance of our products and services, the
outcome of any existing or future litigation, adverse publicity surrounding our products, the
safety of our products, or the use of our products, the safety of our products, regulatory changes
that may affect the marketability of our products, and budgetary cycles of municipal, state and
federal law enforcement and corrections agencies. As a result of these other factors, we believe
that period- to-period comparisons of our operating results may not be meaningful in the short
term, and our performance in a particular period may not be indicative of our performance in any
future period.


<P align="left" style="font-size: 10pt">THE SARBANES-OXLEY ACT AND OTHER RECENT AND PROPOSED CHANGES IN SECURITIES LAWS AND REGULATIONS MAY
INCREASE OUR COSTS.



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<P align="left" style="font-size: 10pt">The Sarbanes-Oxley Act of 2002 that became law in July&nbsp;2002, as well as new rules subsequently
implemented by the Securities and Exchange Commission and the Nasdaq Stock Market, have required,
and will require, changes to some of our accounting and corporate governance practices, including a
report on our internal controls as required by Section&nbsp;404 of the Sarbanes-Oxley Act of 2002. We
expect these new rules and regulations to increase our accounting, legal and other costs, and to
make some activities more difficult, time consuming and/or costly. In particular, complying with
the internal control requirements of Sarbanes-Oxley Section&nbsp;404 will result in increased internal
efforts, significantly higher fees from our independent accounting firm and significantly higher
fees from third party contractors. We also expect these new rules and regulations to make it more
difficult and more expensive for us to obtain director and officer liability insurance, and we may
be required to accept reduced coverage or incur substantially higher costs to obtain coverage.
These new rules and regulations could also make it more difficult for us to attract and retain
qualified executive officers and qualified members of our board of directors, particularly to serve
on our audit committee.


<P align="left" style="font-size: 10pt">WE MAY EXPERIENCE DIFFICULTIES AND INCREASED EXPENSES IN COMPLYING WITH SARBANES-OXLEY SECTION 404.


<P align="left" style="font-size: 10pt">While we believe we currently have adequate internal control over financial reporting, we are
required to evaluate our internal controls under Section&nbsp;404 of the Sarbanes-Oxley Act of 2002 and
any adverse results from such evaluation could result in a loss of investor confidence in our
financial reports and have an adverse effect on our stock price. Pursuant to Section&nbsp;404 of the
Sarbanes-Oxley Act of 2002, beginning with our Annual Report on Form 10-K for the fiscal year
ending December&nbsp;31, 2005, we will be required to furnish a report by our management on our internal
control over financial reporting. Such report will contain among other matters, an assessment of
the effectiveness of our internal control over financial reporting as of the end of our fiscal
year, including a statement as to whether or not our internal control over financial reporting is
effective. This assessment must include disclosure of any material weaknesses in our internal
control over financial reporting identified by management. Such report must also contain a
statement that our independent registered
public accounting firm has issued an attestation report on management&#146;s assessment of such
internal controls. Public Company Oversight Board Auditing Standard No.&nbsp;2 provides the professional
standards and related performance guidance for independent registered
public accounting firms to attest to, and report on, management&#146;s
assessment of the effectiveness of internal control over financial reporting under Section&nbsp;404.


<P align="left" style="font-size: 10pt">While we currently believe our internal control over financial reporting is effective, we are still
performing the system and process documentation and evaluation needed to comply with Section&nbsp;404,
which is both costly and challenging. During this process, if our management identifies one or more
material weaknesses in our internal control over financial reporting, we will be unable to assert
such internal control is effective. If we are unable to assert that our internal control over
financial reporting is effective as of December&nbsp;31, 2005 (or if our independent registered
public accounting firm is unable to attest
that our management&#146;s report is fairly stated or they are unable to express an opinion on the
effectiveness of our internal controls), we could lose investor confidence in the accuracy and
completeness of our financial reports, which would have an adverse effect on our stock price.


<P align="left" style="font-size: 10pt">In April&nbsp;2005, subsequent to the issuance of our audited financial statements for the year ended
December&nbsp;31, 2004 and the filing of our Annual Report on Form 10-KSB, we discovered an error in
that certain stock option grants were treated as incentive stock options when the grants
should have been classified as non-statutory stock options because of the annual limitation on
incentive stock options under applicable tax regulations. As a result of this error, we restated
our financial results for 2004 and filed an amendment to our Form 10-KSB.


<P align="left" style="font-size: 10pt">With respect to the restatement of our financial results, we determined that the error resulted
from an inadequate control over the accounting of our stock option program, and under standards
established by the Public Company Accounting Oversight Board, constituted a &#147;material weakness&#148; in
our internal control over financial reporting. We have also consulted
with the Audit Committee of our Board of Directors of the
determination. In
response to the deficiency which resulted in the &#147;material weakness,&#148; our management took actions
to enhance the operation and effectiveness of our internal controls and procedures to ensure that
we properly classify and account for stock options as either incentive stock options or
non-statutory stock options and that option exercises will have the proper payroll taxes withheld
based on the classification of the option. In connection with our on going Section&nbsp;404 compliance
efforts, we are also continuing to make improvements to our systems, procedures and controls.


<P align="left" style="font-size: 10pt">Upon completion of our 2004 audit, our independent registered public accounting firm made certain recommendations to us
related to our internal control and other accounting, administrative and operating matters and we
are also addressing these recommendations.


<P align="left" style="font-size: 10pt">While we currently anticipate being able to satisfy the requirements of Section&nbsp;404 in a timely
fashion, we cannot be certain as to the timing of completion of our evaluation, testing and any required remediation. If we are not able to
comply with the requirements of Section&nbsp;404 in a timely manner
or if our independent registered public accounting firm is not able to
complete the procedures required by Auditing Standard No.&nbsp;2 to support their attestation report, we
could lose investor confidence in the accuracy and completeness of our financial reports, which
would have an adverse effect on our stock price.


<P align="left" style="font-size: 10pt">RECENT REGULATIONS RELATED TO EQUITY COMPENSATION WILL LIKELY RESULT IN SIGNIFICANTLY HIGHER
EXPENSES AND COULD ADVERSELY AFFECT OUR ABILITY TO ATTRACT AND RETAIN KEY PERSONNEL.


<P align="left" style="font-size: 10pt">Stock options are a fundamental component of our employee compensation packages. We believe that
stock options directly motivate

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<P align="left" style="font-size: 10pt">our employees to maximize long-term stockholder value and, through
the use of vesting, encourage employees to remain with us. On October&nbsp;13, 2004, the Financial
Accounting Standards Board (FASB)&nbsp;concluded that Statement 123R, Share-Based Payment, which would
require all companies to measure compensation cost for all share-based payments (including employee
stock options) at fair value. This requirement will be effective for us beginning in the first
quarter of 2006. Statement 123R will negatively impact our earnings. Recording a charge for
employee stock options under SFAS No.&nbsp;123 (which reflects a similar but different charge than
Statement 123R) would have decreased our net income by $7.1&nbsp;million in 2004 and $334,000 in the
first quarter of 2005. In addition, new regulations implemented by The Nasdaq Stock Market
requiring shareholder approval for all stock option plans as well as new regulations implemented by
the NYSE prohibiting NYSE member organizations from giving a proxy to vote on equity-compensation
plans unless the beneficial owner of the shares has given voting instructions could make it more
difficult for us to grant options to employees in the future. To the extent that new regulations
make it more difficult or expensive to grant options to employees, we may incur compensation costs,
change our equity compensation strategy or find it difficult to attract, retain and motivate
employees, each of which could materially and adversely affect our business.


<P align="left" style="font-size: 10pt">OUR DEPENDENCE ON THIRD PARTY SUPPLIERS FOR KEY COMPONENTS OF OUR DEVICES COULD DELAY SHIPMENT OF
OUR PRODUCTS AND REDUCE OUR SALES.


<P align="left" style="font-size: 10pt">We depend on certain domestic and foreign suppliers for the delivery of components used in the
assembly of our products. Our reliance on third-party suppliers creates risks related to our
potential inability to obtain an adequate supply of components or subassemblies and reduced control
over pricing and timing of delivery of components and sub-assemblies. Specifically, we depend on
suppliers of sub-assemblies, machined parts, injection molded plastic parts, printed circuit
boards, custom wire fabrications and other miscellaneous customer parts for our products. We also
do not have long-term agreements with any of our suppliers. Any interruption of supply for any
material components of our products could significantly delay the shipment of our products and have
a material adverse effect on our revenues, profitability and financial condition.


<P align="left" style="font-size: 10pt">OUR DEPENDENCE ON FOREIGN SUPPLIERS FOR KEY COMPONENTS OF OUR PRODUCTS COULD DELAY SHIPMENT OF OUR
FINISHED PRODUCTS AND REDUCE OUR SALES.


<P align="left" style="font-size: 10pt">We depend of foreign suppliers for the delivery of components used in the assembly of our products.
Due to changes imposed for imports of foreign products into the United States, as well as port
closures and delays created by terrorist threats, we are exposed to risk of delays caused by
freight carriers or customs clearance issues for our imported parts. Delays caused by our inability
to obtain components for assembly could have a material adverse effect on our revenues,
profitability and financial condition.


<P align="left" style="font-size: 10pt">FOREIGN CURRENCY FLUCTUATIONS MAY EFFECT OUR COMPETITIVENESS AND SALES IN FOREIGN MARKETS.


<P align="left" style="font-size: 10pt">The relative change in currency values creates fluctuations in product pricing for potential
international customers. These changes in foreign end-user costs may result in lost orders and
reduce the competitiveness of our products in certain foreign markets. These changes may also
negatively affect the financial condition of some existing or potential foreign customers and
reduce or eliminate their future orders of our products.


<P align="left" style="font-size: 10pt">USE OF ESTIMATES MAY CAUSE FINANCIAL RESULTS TO DIFFER

<P align="left" style="font-size: 10pt">The preparation of financial statements in conformity
with accounting principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting period. Actual results could differ
from those estimates.



<P align="left" style="font-size: 10pt">WE FACE RISKS ASSOCIATED WITH RAPID TECHNOLOGICAL CHANGE AND NEW COMPETING PRODUCTS.


<P align="left" style="font-size: 10pt">The technology associated with non-lethal devices is receiving significant attention and is rapidly
evolving. While we have patent protection in key areas of electro-muscular disruption technology,
it is possible that new non-lethal technology may result in competing products that operate outside
our patents and could present significant competition for our products.


<P align="left" style="font-size: 10pt">AS DEMAND FOR OUR PRODUCTS INCREASES, OUR FUTURE SUCCESS WILL BE DEPENDENT UPON OUR ABILITY TO RAMP
MANUFACTURING PRODUCTION CAPACITY WHICH WILL BE ACCOMPLISHED IN PART BY THE IMPLEMENTATION OF
CUSTOMIZED MANUFACTURING AUTOMATION EQUIPMENT.


<P align="left" style="font-size: 10pt">Although our revenue decreased in the first quarter of 2005 compared to the fourth quarter of 2004,
we experienced significant revenue growth in 2003 and 2004. To the extent demand for our products
increases significantly in future periods, one of our key challenges will be to ramp our production
capacity to meet sales demand, while maintaining product quality. Our primary strategies to
accomplish this include increasing the physical size of our assembly facilities, the hiring of
additional production staff, and the implementation of customized automation equipment. The Company
has limited previous experience in implementing automation equipment, and the investments made on this equipment may not yield the anticipated labor and
material efficiencies. Our inability to meet any future increase in sales demand or effectively
manage our expansion could have a material adverse affect our revenues, profitability and
financial condition.


<P align="left" style="font-size: 10pt">WE DEPEND ON OUR ABILITY TO ATTRACT AND RETAIN OUR KEY MANAGEMENT AND TECHNICAL PERSONNEL.


<P align="left" style="font-size: 10pt">Our success depends upon the continued service of our key management personnel. Our success also
depends on our ability to continue to attract, retain and motivate qualified technical personnel.
Although we have employment agreements with certain of our officers, the employment of such persons
is &#147;at-will&#148; and either we or the employee can terminate the employment relationship at any time,
subject to the applicable terms of the employments agreements. The competition for our key
employees is intense. The loss of the service of one or more of our key personnel could harm our
business.




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