SOURCE: The Guitammer Company

The Guitammer Company Announces Second Quarter 2014 Results

Pivot to Broadcast Technology Deployment Accelerates

The Guitammer Company (OTCQB: GTMM) (OTCBB: GTMM), a leader in tactile and haptic broadcast technology and creator of the award-winning line of ButtKicker®-brand low frequency audio transducers that provide an immersive entertainment experience for audiences, announced today its results for the second quarter ended June 30, 2014.

 

2014 Second Quarter Financial Highlights and Selected Recent Developments

 

-          Revenue was $494,902 for the six months ended June 30, 2014, compared to revenue of $953,610 for the six months ended June 30, 2013, a decrease of 48.1%.
 

-          The Company’s revenues decreased primarily due to its decision to allocate a relatively greater amount of its resources from working capital related to deliveries of its consumer product to the development of its patented broadcast technology. The Company’s backorders at June 30, 2014 were approximately $350,000 compared to virtually no backorders at June 30, 2013 and December 31, 2013 respectively.
 

-          Gross margin increased to 46.3% for the six months ended June 30, 2014 from 42.2% for the six months ended June 30, 2013.  This represents an increase of almost 10% between these two 6 month time periods
 

-          The Company expects in the near future to finalize and announce a contract with a regional sports network and an NHL team for the deployment of its haptic-tactile broadcast for the 2014 / 2015 season.
 

-          The Company is currently in the process of raising additional capital led by Noble Financial Capital Markets.

 

Richard Conn, CFO of Guitammer, said, “As we stated regarding last quarter’s results, because of our focus on our patented broadcast technology, the Company experienced a shortage of available working capital required to fund certain inventory requirements related to its existing consumer products business and this had a corresponding negative effect on revenues for the quarter.  However, we continue to see strong interest in our core business products as evidenced by the size of our backorders and most importantly with the contract we are in the process of finalizing for our broadcast technology.  We expect to be able to significantly reduce the sales backorder in the 3rd and 4th quarter of this year.”

 

The Company’s efforts to build out and standardize the haptic-tactile broadcast ecosystem continue to gain traction and a larger audience. On April 29th Mark A. Luden, President of Guitammer showcased the Company’s broadcast technology as part of National Cable and Telecommunication’s (NCTA) The Cable’s Show 2014 Imagine Park “Beyond Better Television” program.

 

And at the Society of Motion Picture and Television Engineer’s (SMPTE) Technology Committees meeting held NHK in Tokyo, Japan June 2 -6, 2014, Mr. Luden was interviewed regarding haptic-tactile broadcasting and his role as the “Coding of Tactile Essence” Committee Chair.  The NCTA The Cable Show and the SMPTE videos are available at:

 

http://2014.thecableshow.com/videos/Play/VvNmlwbTosTg5n8q5yqwXQsuviJ4nnzS?i=so1#channel=*&i=so1, and

 

https://www.youtube.com/watch?v=o0sIAwgrAog&list=UUGWzDvT6KmdSMBRsbcdToSg respectively.

 

Commenting on the size and potential of the haptic-tactile market, Mr. Luden stated, “We see the market for haptic, tactile and motion (immersive) broadcasting increasing greatly in the next two to five years. Literally everything and everyone – from your family pet to now NFL players – have some kind of sensor on them transmitting all types of information, including location, motion and force, for further use. According to recent studies, this “over-the-top” content on “second screens” is seen as an $18 billion market.  We believe being able to create and standardize the “pipe” – the path from the live event to the end user without regard to what brand or type of end user hardware is used – will help drive this multi-billion dollar market and allow Guitammer to reap the ensuing rewards. 

 

Imagine experiencing the action from your favorite player’s point of view and feeling the intensity of their live game action.  This ability to literally “be the player” is coming very soon.  We believe the ability to monetize this value added content, by way of “micro transactions” that literally turn the data feed on or off from a live action sport, will be a tremendous revenue opportunity for all the stakeholders involved – the sport, the athletes / teams, the broadcaster and the distribution (cable, FiOS, IPTV) partner.”

 

 

- financial tables follow

 

THE GUITAMMER COMPANY

 

CONSOLIDATED BALANCE SHEETS

 

 

 

 

      (unaudited)

 

 

 

 

 

 

 

 

         June 30,

 

 

 

  December 31,

 

 

 

 

2014

 

 

 

2013

 

ASSETS

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

   Cash and cash equivalents

 

$

19,297

 

 

$

140,231

 

   Accounts receivable, net

 

 

34,446

 

 

 

62,505

 

   Inventory

 

 

323,089

 

 

 

443,761

 

   Prepaid expenses and other current assets

 

 

3,030

 

 

 

6,141

 

               Total current assets

 

 

379,862

 

 

 

652,638

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

77,715

 

 

 

127,186

 

Deferred financing costs, net

 

 

38,433

 

 

 

38,335

 

Other assets, net

 

 

34,056

 

 

 

21,472

 

               Total Assets

 

$

530,066

 

 

$

839,631

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

   Line of credit

 

$

39,523

 

 

$

39,523

 

   Accounts payable

 

 

652,523

 

 

 

533,438

 

   Accrued expenses

 

 

353,269

 

 

 

376,188

 

   Deferred revenue

 

 

55,215

 

 

 

68,823

 

   Current portion of long-term debt – related parties

 

 

604,530

 

 

 

584,352

 

   Current portion of long-term debt – non-related parties

 

 

833,177

 

 

 

559,987

 

 

 

 

 

 

 

 

 

 

               Total current liabilities

 

 

2,538,237

 

 

 

2,162,311

 

 

 

 

 

 

 

 

 

 

Long-term debt, net of current portion – related parties

 

 

335,344

 

 

 

250,000

 

Long-term debt, net of current portion – non-related parties

 

 

  

 

 

 

302,479

 

Total Liabilities

 

 

2,873,581

 

 

 

2,714,790

 

 

 

 

 

 

 

 

 

 

Commitments

 

 

  

 

 

 

  

 

 

 

 

 

 

 

 

 

 

Stockholders’ deficit

 

 

 

 

 

 

 

 

Common stock, par value of $.001, 150,000,000 shares authorized;   78,592,748 and  77,905,248 shares issued, and outstanding at  June 30, 2014 and December 31, 2013, respectively

 

 

78,594

 

 

 

77,906

 

Additional paid-in capital

 

 

7,414,799

 

 

 

7,253,730

 

   Accumulated deficit

 

 

(9,836,908

)

 

 

(9,206,795

)

 

 

 

 

 

 

 

 

 

Total Stockholders’ deficit

 

 

(2,343,515

)

 

 

(1,875,159

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders’ deficit

 

$

530,066

 

 

$

839,631

 

 

 

THE GUITAMMER COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended

 

 

June 30,

 

 

2014

 

2013

Total revenue

 

$

494,902

 

 

$

953,610

 

 

 

 

 

 

 

 

 

 

Cost of goods Sold

 

 

265,980

 

 

 

550,955

 

        Gross profit

 

 

228,922

 

 

 

402,655

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

      General and Administrative

 

 

741,381

 

 

 

868,635

 

   Research and Development

 

 

10,782

 

 

 

23,617

 

 

 

 

752,163

 

 

 

892,252

 

 

 

 

 

 

 

 

 

 

         Loss from Operations

 

 

(523,241

)

 

 

(489,597

)

 

 

 

 

 

 

 

 

 

Other Income

 

 

 

 

 

 

 

 

  Interest expense

 

 

(106,875

)

 

 

(100,232

)

  Interest income

 

 

3

 

 

 

39

 

 

 

 

(106,872

)

 

 

(100,193

)

 

 

 

 

 

 

 

 

 

Loss before provision for

 

 

 

 

 

 

 

 

        Income taxes

 

 

(630,113

)

 

 

(589,790

)

 

 

 

 

 

 

 

 

 

Provision for Income taxes

 

 

  

 

 

 

  

 

        Net Loss

 

$

(630,113

)

 

$

(589,790

)

 

 

 

 

 

 

 

 

 

Basic and diluted loss per share

 

$

(0.008

)

 

$

(0.008

)

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average common shares outstanding

 

 

78,122,444

 

 

 

70,755,969

 

 

 

 

 

 

 

 

 

 

 

About The Guitammer Company

The Guitammer Company, based in Westerville, Ohio, is a leader in low frequency sound products and broadcast technology.  The Guitammer Company’s patented broadcast technology “ButtKicker Live!®  or “4D Sports powered by ButtKicker” enables the excitement, impact and feeling of live sporting events to be broadcast along with the sound and video, and puts the viewer into the action, whether at home or at the event.  “4D Sports powered by ButtKicker” technology is available for cable, satellite, fiber optic, IPTV and over-the-air broadcasts. For more information see www.guitammer.com/4Dsports. ButtKicker® and ButtKicker Live are registered trademarks of The Guitammer Company. 

 

The Company’s innovative and award-winning line of patented ButtKicker-brand low frequency audio transducers let users feel low-frequency sound (bass). ButtKicker brand products are used around the world by leading entertainment and theater companies such as AMC Theatres, Alamo Drafthouse, IMAX, Disney and Lumiere Pavilions in movie theaters and attractions; by world-famous musicians; and in home theaters, by consumers for video games, simulators and car audio.

 

ButtKicker brand products are distributed by Pearl Drums for musicians under the trade name, “Pearl’s Throne Thumper by ButtKicker”.  ButtKicker brand products’ patented design makes them musically accurate, powerful and virtually indestructible. 
 

For additional information on The Guitammer Company and detailed product information, visit www.guitammer.com and www.shakemycouch.com .  To like our Facebook page or follow us on Twitter for company updates, visit www.facebook.com/Guitammer and www.twitter.com/Guitammer
 

 

Safe Harbor:

 

This letter contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby.  Investors are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation, the ability of the Company to successfully implement its turnaround strategy, changes in costs of raw materials, labor, and employee benefits, as well as general market conditions, competition and pricing.  Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements included in this letter will prove to be accurate.  In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as representation by the Company or any other person that the objectives and plans of the Company will be achieved.  In assessing forward-looking statements included herein, readers are urged to carefully read those statements. When used in the Annual Report on Form 10-K, the words "estimate," "anticipate," "expect," "believe," and similar expressions are intended to be forward-looking statements.

 

 

For More Information Contact:

Media

The Guitammer Company

(614) 898-9370

media@guitammer.com

 

 

 

 

SOURCE: The Guitammer Company