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T3 Moves to Amex, Raises Growth Cash

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Costa Mesa-based electric vehicle maker T3 Motion Inc. is eyeing growth and profitability after raising $12 million from investors.

T3 raised the money in May as part of a move of its shares from the low-profile Bulletin Board exchange to the American Stock Exchange.

“This is the last run of financing before becoming cash flow positive,” said Kelly Anderson, T3’s president and chief financial officer.

T3 plans to use $1 million from the proceeds to repay debt and the rest for “growth and expansion purposes,” Anderson said.

That includes research and development, sales and marketing and hiring, she said.

T3’s low-speed, three-wheel cruisers are used by security guards, police officers, dock workers and others. Police departments in Los Angeles, New York and Dallas, as well as the Royal Canadian Mounted Police, use T3’s vehicles.

The company competes against New Hampshire’s Segway Inc. and California Motors LLC of Central California.

T3, which generates about $5 million in yearly sales, now is “burning through cash” as it tries to market and boost production of its electric vehicles, Anderson said.

The company is on its way to carving out its first profit before interest and taxes. It recorded a $640,000 loss in the March quarter, narrowed from a $1.6 million loss a year earlier.

T3 has lost about $36 million since it was started in 2006.

• Headquarters: Costa Mesa

• Products: electric vehicles

• Yearly sales: $5 million

• Market value: $25 million

• Founded: 2006

• Notable: CEO was sizable Powerwave shareholder

Moving the company’s shares to the American Stock Exchange was a longstanding goal for T3 as it seeks to build awareness on Wall Street and moves beyond its development stage.

“The goal was to give shareholders liquidity and move up to a senior exchange,” Anderson said.

T3 had a market value of about $25 million last week.

Orders, which tend to go up as gas prices rise, recently have picked up, according to Anderson.

T3 has about $3 million in contracts on backlog, she said.

The company’s top selling model is made at its 35,000-square-foot Costa Mesa headquarters, where final assembly, testing and quality assurance also are handled.

The vehicle sells for about $9,000.

Space allows for an additional 15,000 square feet for producing vehicles and accessories in Costa Mesa.

T3’s come up with a prototype for a front-wheel drive, three-wheeled electric vehicle. The GT3 is expected to start sales next year.

T3 employs about 55 people in Costa Mesa.

The company has raised about $40 million through private investments, venture capital and public offerings.

Chief Executive Ki Nam invested about $11 million of his own money to get the company off the ground.

He was the second largest shareholder of Santa Ana-based Powerwave Technologies Inc. when it raised nearly $30 million in its initial public offering in 1996.

The Santa Ana company makes cellular base station gear for wireless networks.

T3 may raise more money as it continues to expand, according to Anderson.

The company has had a tough time raising money in its home state, she said.

“It has been very difficult getting the attention of anybody in California,” Anderson said. “We’re a little bit surprised by the cool reception from investment companies.”

T3’s last finance round included no local money and drew foreign investors, she said.

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