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Open Letter to TASER International, Inc. Shareholders and Customers

SCOTTSDALE, Ariz., Jan 11, 2005 /PRNewswire-FirstCall via COMTEX/ -- TASER International, Inc. (Nasdaq: TASR), a market leader in advanced non-lethal devices, today announced the release of the following letter to its shareholders and customers:

Dear Shareholders and Customers of TASER International, Inc.,

Normally these letters are sent at the time of our Annual Report, however given recent events, it is important to address all of you as quickly as possible with an update on the status of your company. As you will read below, your company continues to be strong, and its management focused.

First, as we announced last week, the U.S. Securities and Exchange Commission (SEC) is conducting an informal inquiry and has asked for information about the public statements on the safety of TASER(R) products; and on information regarding our distribution agreement with Davidson's Inc., one of our top stocking distributors. Because of the legal nature of the SEC review, we are compelled to refrain from further comment at this time. We understand these inquires may not be resolved quickly and that there is no basis upon which to set a timeline for expected completion. Rest assured, we are cooperating with the inquiry by providing the SEC with information and continue to stand firmly behind our actions.

Second, we have received questions indicating there is confusion on the issue of insider stock sales in the fourth quarter. Phil Smith, our Chairman who retired from day to day duties on December 31, 2004 sold the majority of his TASER stock as part of his retirement transition. Tom Smith and Rick Smith, co-founders of the company and whom currently serve as President and CEO, also sold a portion of their position in order to diversify their holdings. During the fourth quarter of 2004, Tom and Rick sold an average of 22% of their position in TASER including both their stock and vested and unvested options. We still retain a significant position in TASER International, which at year-end comprised a significant majority of our personal assets. Hence, we feel that the rumors about us "bailing out" are not fair, nor accurate. We have pointed out previously that the Smith family along with one other investor provided all of the startup capital to TASER International prior to its public offering, and we have held this investment for up to eleven years. We have historically sold stock and have been straight-forward with our investors that insiders would continue to diversify through continuing stock sales in the future.

In retrospect, 2004 was an amazing year for TASER International. At the beginning of the year, we projected top-line revenue growth of 100%. This was later raised to 150%, and later raised again. Further, the company was able to sustain this level of growth while generating strong cash flow.

In October, we convened the first meeting of our Scientific and Medical Advisory Board (SMAB), with independent representatives from leading academic and private practice institutions. Among others, this board includes well- known medical experts such as Dr. Richard Luceri, a world-renowned cardiac rhythm specialist who has devoted most of his career to fibrillation and defibrillation, who concluded, "I have been impressed by the company's focus on safety and reliability of TASER products and was pleasantly surprised at the depth and quality of the data regarding TASER safety." Another member of the advisory board, Dr. Hugh Calkins, Professor of Medicine and Director of the Arrhythmia Service at Johns Hopkins Hospital, concluded, "I have had an opportunity to review the studies and the results of the studies confirm the general safety of the TASER devices, and I personally believe this technology is saving lives everyday."

We are very proud of our commitment to supporting the safety testing of our products and we believe that we have assembled the strongest team of medical advisors of any non-lethal weapon manufacturer. The new Scientific and Medical Advisory Board will help us to further public understanding of TASER technology and assist us in the design and evaluation of future systems as well as ongoing safety testing protocols.

We firmly believe that our public statements are fully supported by medical and scientific studies. These studies include both TASER-sponsored studies and completely independent safety evaluations that were conducted by the U.S. Department of Defense, the Home Office in the United Kingdom, various government agencies in Canada as well as studies in Australia and other countries. Many of these studies have been posted at www.TASER.com where readers can learn more on this important topic first hand.

It is with a great sense of hope and anticipation that we enter 2005. Our new 100,000 square foot state of the art manufacturing facility should come on-line by April. The new plant is over three times the size of our combined current facilities and will enable us to continue to grow the business. Similarly, we have greatly expanded our Research and Development team and expect to announce significant progress this year on many announced new products that we have disclosed, such as the Extended Range Electronic Projectile (XREP) and the TASER Anti-Personnel Munition (TAPM), as well as other new yet-to-be-announced products expected throughout the year.

We have received numerous questions regarding potential competitors and their expected effect on our sales growth. During the first half of 2005, it is possible that we may see some delays in orders as agencies test and evaluate potential new entrants. However, we are confident TASER is in a strong position to defend our leadership role in the marketplace. We have extensive intellectual property in our patents and trademarks. In addition to our issued patents, we have 19 patents pending including two patent applications with over 140 claims relating to the TASER X26. We have developed significant trade secrets and process technologies over the past decade. We have patents and pending patents on our electronic waveforms, which have been extensively independently studied as outlined above. We believe potential competitors will have a significant task in establishing safety data on a scale comparable to the scientific and medical studies that have been assembled on our TASER devices. Finally, with our field proven M26 product priced at $399 and our industry leading X26 product priced at $799, we feel we are well positioned to address both the high performance and price sensitive market segments.

We know the best way to stay ahead of potential competitors is to innovate with our proven TASER technology. Our expanded R&D team is pushing our technology into new frontiers for future products. In fact, we have recently hired a full time patent attorney to ensure our intellectual property portfolio keeps pace with our technological progress and to ensure that our technology is not infringed upon.

We also know that our primary focus must remain on providing the best products and finest service to our customers. We believe we have excellent relationships with our customer base, which includes over 6,000 law enforcement agencies testing or deploying our products. To keep pace with our growth, we have recently expanded our customer service department to ensure that we maintain our reputation for providing highly responsive service to the law enforcement market.

We understand how unsettling these times can be for our investors and we hope that this letter has answered some of your concerns. This company has been in the business of saving lives for over a decade and like you, we take great pride in that fact. We have survived many challenges and built a thriving, dynamic company. Our management team shares these beliefs and is dedicated and focused on continuing to build a great company. We have overcome great challenges through the years. Just like yesterday, today we stand with our supporters building industry leading products and providing our best service to our customers, just like we will continue to do in the days to come.

In closing, we expect to announce our financial results for the fourth quarter and the year 2004 on February 8, 2005. We appreciate your continued support as we look forward to a bright future and invite you all to visit us during our annual shareholder meeting to be held in our new world-class headquarters this spring.

Thank you for your support,

    Rick Smith                     Tom Smith
    Chief Executive Officer        President

    About TASER International, Inc.

TASER International, Inc. provides advanced non-lethal devices for use in the law enforcement, military, private security and personal defense markets. TASER devices use proprietary technology to safely incapacitate dangerous, combative or high-risk subjects who pose a risk to law enforcement officers, innocent citizens or themselves. TASER technology saves lives every day, and the use of TASER devices dramatically reduces injury rates for police officers and suspects and reduces litigation costs. TASER technology is currently in testing or deployment at over 6,000 law enforcement and correctional agencies in the U.S. and abroad. For more information on TASER life-saving technology, please call TASER International at (480) 444-4000 or visit our website at www.TASER.com.

Note to Investors

This letter contains forward-looking information within the meaning of Section 27A of the Securities Act of the 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the safe harbor created by those sections. The forward-looking information is based upon current information and expectations regarding TASER International. These estimates and statements speak only as of the date on which they are made, are not guarantees of future performance, and involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results could materially differ from what is expressed, implied, or forecasted in such forward-looking statements.

TASER International assumes no obligation to update the information contained in this letter. TASER International's future results may be impacted by risks associated with rapid technological change, new product introductions, new technological developments and implementations, execution issues associated with new technology, ramping manufacturing production to meet demand, litigation including lawsuits resulting from alleged product related injuries, media publicity concerning allegations of deaths occurring after use of the TASER device and the negative impact this could have on sales, product quality, implementation of manufacturing automation, potential fluctuations in quarterly operating results, competition, financial and budgetary constraints of prospects and customers, international order delays, dependence upon sole and limited source suppliers, negative reports concerning TASER device uses, fluctuations in component pricing, government regulations, governmental inquiries and investigations, variation among law enforcement agencies with their TASER product experience, TASER device tests and reports, dependence upon key employees, and its ability to retain employees. TASER International's future results may also be impacted by other risk factors listed from time to time in its SEC filings, including, but not limited to, the Company's Form 10-QSBs and its Annual Report on Form 10-KSB.

For further information contact Steve Tuttle, Vice President of Communications, at Press@TASER.com. Visit the company's web-site at www.TASER.com for facts and video.

SOURCE TASER International, Inc.

Steve Tuttle, Vice President of Communications of TASER International, Inc., Press@TASER.com, or Media ONLY Hotline, +1-480-444-4000

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding TASER International, Inc.'s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.