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The Guitammer Company Announces 2013 Financial Results

Company Achieves Key Milestone of Initial "4D powered by ButtKicker" Broadcast With the NHRA on ESPN2; Significantly Increases Deployment of "4D powered by ButtKicker" Cinema Seats

WESTERVILLE, OH -- (Marketwired) -- 03/14/14 -- 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 that its revenue increased in the 4th quarter ending December 31, 2013 by approximately $111,312 or 23% to $600,337 compared to revenue of $489,025 for the 4th quarter of 2012. Revenue for the entire year ending December 31, 2013 decreased $215,324 or 10.1% to $1,917,300 as compared to revenue of $2,132,624 for the year ended December 31, 2012.

2013 Full Year Financial Highlights and Recent Developments

  • National launch of the patented "4D Sports powered by ButtKicker" tactile enabled broadcast technology for the National Hot Rod Association (NHRA) on ESPN2 telecasts. Debuting with the September 14th, 2013 telecast and then for all subsequent 2013 telecasts.

  • Significant acceleration in worldwide cinema deployment with over 4,000 "4D Cinema powered by ButtKicker" seats added in 22 auditoriums in the US, China and Hong Kong which almost doubled the Company's US footprint and more than doubled the Company's footprint in China & Hong Kong.

  • Cinema deployment included outfitting every seat, totaling approximately 1,100, in all 5 locations of a new concept theater by a US top 4 theater operator.

  • Total revenues decreased 10 percent year-over-year to approximately $1.92 million, primarily due to a decrease in international sales, noted below.

  • US sales increased over 10% to approximately $1,060,000 in 2013 from approximately $960,000 in 2012.

  • International sales decreased to $860,000 in 2013 from approximately $1,170,000 in 2012, primarily due to weakness in sales to the European market and most notably France.

  • Gross margins increased to 42 percent for all of 2013 as compared to 40 percent for all of 2012.

  • Approximately $1.25 million of new equity was raised from private placements in FY2013.

  • Continued trend from 2012 of improving working capital deficit with an improvement of (i.e. a decrease of) $70,000 or 4.4 percent in 2013 as compared to 2012.

Rich Conn, Guitammer's CFO, stated, "We are pleased with our Q4 2013 results, last year's gross margin, and the fact that we were able to continue to invest in and begin to commercialize our broadcast technology."

Additional Full Year 2013 Recent Developments

"2013 was a pivotal year for Guitammer as we delivered on our promise of broadcasting sports in "4D" on a national basis and significantly increased our "4D" cinema presence, especially in the US market. In 2013 our strategy of building awareness of our scalable and disruptive broadcast technology supported by cinema sales took several important steps forward and we look for that trend to continue in 2014," said Mark A. Luden, Guitammer's President / CEO.

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" is now live on ESPN2 for the National Hot Rod Association (NHRA) broadcasts. "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.

- Financial tables follow -

                           THE GUITAMMER COMPANY
                        CONSOLIDATED BALANCE SHEETS

                                                 December 31,  December 31,
                                                 ------------  ------------
                                                     2013          2012
                                                 ------------  ------------
Current assets
  Cash and cash equivalents                      $    140,231  $     79,136
  Accounts receivable, net                             62,505        21,011
  Inventory                                           443,761       629,251
  Prepaid expenses and other current assets             6,141       131,639
                                                 ------------  ------------
    Total current assets                              652,638       861,037

  Property and equipment, net                         127,186        12,208
  Deferred financing costs, net                        38,335        58,336
  Other assets, net                                    21,472        28,780
                                                 ------------  ------------
    Total Assets                                 $    839,631  $    960,361
                                                 ------------  ------------

Current liabilities
  Line of credit                                 $     39,523  $     39,523
  Accounts payable                                    533,438       742,451
  Accrued expenses                                    376,188       459,168
  Deferred revenue                                     68,823       129,385
  Current portion of long-term debt - related
   parties                                            584,352       517,004
  Current portion of long-term debt - non-
   related parties                                    559,987       554,124
                                                 ------------  ------------
    Total current liabilities                       2,162,311     2,441,655

Long-term debt, net of current portion - related
 parties                                              250,000       317,348
Long-term debt, net of current portion - non-
 related parties                                      302,479       391,018
                                                 ------------  ------------
Total Liabilities                                   2,714,790     3,150,021
                                                 ------------  ------------

                                                 ------------  ------------
Commitments                                                 -             -
                                                 ------------  ------------

Stockholders' deficit
  Common stock, par value of $.001, 150,000,000
   shares authorized; 77,905,248 and 68,779,482
   shares issued, and outstanding at December
   31, 2013 and December 31, 2012, respectively        77,906        68,780
  Additional paidddin capital                       7,253,730     5,641,492
  Accumulated deficit                              (9,206,795)   (7,899,932)
                                                 ------------  ------------

Total Stockholders' deficit                        (1,875,159)   (2,189,660)
                                                 ------------  ------------
Total Liabilities and Stockholders' deficit      $    839,631  $    960,361
                                                 ------------  ------------

                           THE GUITAMMER COMPANY

                                                 Year Ended December 31,
                                                  2013            2012
                                             --------------  --------------
Total revenue                                $    1,917,300  $    2,132,624

Cost of Goods Sold                                1,106,269       1,282,168
                                             --------------  --------------
    Gross profit                                    811,031         850,456
                                             --------------  --------------

Operating expenses
  General and administrative                      1,727,180       1,568,067
  Research and development                          197,006          75,474
                                             --------------  --------------
                                                  1,924,186       1,643,541
                                             --------------  --------------

    Loss from operations                         (1,113,155)       (793,085)
                                             --------------  --------------

Other income (expense)
  Interest expense                                 (193,776)       (278,928)
  Interest income                                        68              45
                                             --------------  --------------
                                                   (193,708)       (278,883)
                                             --------------  --------------

Loss before provision of income taxes            (1,306,863)     (1,071,968)

Provision for income taxes                                                -
                                             --------------  --------------
  Net loss attributable to common
   stockholders                              $   (1,306,863) $   (1,071,968)
                                             --------------  --------------

Basic and diluted loss per share             $        (0.02) $        (0.02)

Basic and diluted weighted average common
 shares outstanding                              73,712,472      64,861,800

Reconciliation of U.S. GAAP Net loss to EBITDA and Adjusted EBITDA:

EBITDA is defined as earnings (loss) before net interest expense, taxes, depreciation and amortization. Adjusted EBITDA is defined as earnings before net interest expense, income taxes, depreciation, amortization, stock warrant expense, payment of stock and warrants to consultants and employee stock-based compensation. Although EBITDA and Adjusted EBITDA are not measures of performance calculated in accordance with generally accepted accounting principles ("GAAP"), Guitammer believes that these non-GAAP measures will allow for a better evaluation of the operating performance of the business and facilitate meaningful comparison of the results in the current period to those in prior periods and future periods. However, investors should not consider these measures in isolation or as a substitute for net income, operating income, or any other measure for determining Guitammer's operating performance that is calculated in accordance with GAAP. A reconciliation of EBITDA and Adjusted EBITDA to the most comparable GAAP financial measure, net loss, follows:

                    Reconciliation of U.S. GAAP net loss
                       To EBITDA and Adjusted EBITDA

                                                 Year ended December 31,
                                                  2013            2012
                                             --------------  --------------
Net Loss                                     $   (1,306,863) $   (1,071,968)
  Interest expense                                  193,776         278,928
  Depreciation and patent amortization               31,623          12,965
  Taxes                                                   -               -
                                             --------------  --------------
EBITDA                                           (1,081,464)       (780,075)
                                             --------------  --------------
Less non-cash expenses from:
Stock warrant expense                               (20,441)         80,141
Payment of stock and warrants to consultants        184,771         183,239
Employee stock options expense                      153,455          41,002
                                             --------------  --------------
Adjusted EBITDA                              $     (763,679) $     (475,693)
                                             ==============  ==============

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