Taser Feels the Heat from SEC

    January 7, 2005

Attention from the Securities and Exchange Commission toward the safety of stun guns caused Taser stock to take a dive.

Shares fell more than 15 percent after Taser released news of an investigation Thrusday.

Taser stated, “We are compiling information to assist the SEC in two areas: company statements regarding the safety of Taser products and a recent order” from a firearms distributor.

We’re confident that this is going to come out in our favor,” said Tom Smith, Taser President.

Standing by the safety of their products, Smith said, “We feel very confident that the statements that we’ve made surrounding the safety of our products are supported with the safety studies.”

The following was said in a Financial Times article:

The SEC is also looking at a $1.5m deal between Taser and Davidson’s, a firearms distributor, to market and distribute 1,000 of Taser’s X26C Citizen Defense stun guns throughout the US. While device represents Taser’s entry into the consumer market.

The timing of the Davidson’s deal, just ahead of the company’s fourth quarter results, came under scrutiny from analysts, who noted that without the deal the company might have been been forced to report its first quarter-to-quarter revenue decline in nearly two years.

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