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November 2013
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Guitammer Surpasses Key Milestones & Sets Stage for Robust Growth


By TDM Financial The Guitammer Co. (OTCBB: GTMM) surpassed two key operational milestones
and reported several financial improvements during the third quarter.
4D Sports powered by ButtKicker®, the Company’s patented tactile
broadcasting technology, went live on the National Hot Rod Association
(NHRA) telecasts on ESPN2 and set the stage for long-term recurring
revenues. In the meantime, several large cinema orders were received
during the third quarter and began shipping this quarter. Management was
also successful in improving the company’s overall financial position.

In this article, we’ll take a look at the company’s third quarter
performance and discuss why investors may want to consider taking a
position in the stock.

NHRA Telecasts on ESPN2 Go Live

The Guitammer Co.’s approval from The Walt Disney Company’s (NYSE: DIS)
ESPN2 network to tactilely enhance the NHRA telecasts marks a
significant milestone in its corporate development. While the current
agreement is limited to NHRA telecasts, it sets a precedent for future
agreements and validates the patented broadcast technology as ESPN2 is
available nationally via all means of transmission (satellite, cable,
FiOS) and reaches approximately 100 million US households. Success with
the NHRA could lead to implementation across a wide variety of other
live sporting events with other broadcasters and transmission partners.

According to its third quarter 10-Q filing:

“The company spent] considerable time and effort implementing and
commercializing its patented tactile broadcast technology for the ESPN2
broadcasts of the National Hot Rod Association (NHRA). On July 12th,
2013 the Company and the NHRA executed the “Broadcast Technology and
Promotional Rights Agreement” between NHRA and The Guitammer Company.
During July, August and September the Company spent considerable
personnel time and resources implementing this Agreement and was
rewarded with the approval of ESPN to tactically enhance the NHRA
broadcasts on a live national basis beginning with the September 14th,
2013 NHRA telecast and all subsequent broadcasts through the date of
this filing.”

“4D Sports powered by ButtKicker” enables the company to accelerate both
its hardware sales and build a recurring revenue stream. The recurring
revenue would come from broadcasters or transmission partners that
license the technology to encode broadcasts, and accelerated hardware
sales could follow as consumers take advantage of the new features. This
circular feedback loop has the potential to generate significant
long-term shareholder value as new agreements are signed.

Expanding Theater Footprint

The Guitammer Co. received several large purchase orders toward the end
of the third quarter, according to its 10-Q filing. Since these orders
will not ship until the fourth quarter, they aren’t included in the
company’s third quarter results, which means investors could see a
strong finish to the year in the fourth quarter. The expanding theater
footprint continues to drive its near-term revenues while exposing a
greater number of people to the technology.

According to comments in its 10-Q filing:

“Several larger purchase orders in excess of $260,000 [were] received at
the end of the third quarter of 2013, but will not ship until the
fourth quarter … the Company intends to increase its advertising and
marketing expenses by advertising directly to customers who experience
its products in ButtKicker equipped cinemas.”

The upcoming winter holiday shopping season could further enhance its
fourth quarter sales, which should already come in above expectations
given these recent purchase orders
for 18 auditoriums totaling 3,100 seats. Consumers also remain very
happy with the company’s product lines, which regularly attract
five-star reviews on Inc.’s (NASDAQ: AMZN) ubiquitous retail
website and other outlets.

Potential Investment Opportunity

The Guitammer Co. represents an attractive investment opportunity at its
current levels. With a market capitalization of just $13.6 million,
shareholders could see significant stock price appreciation as
management executes its licensing business model for its broadcast
technology. In the meantime, theater installations and hardware sales
should continue to grow as the company works to unlock long-term
shareholder value.

Management sums up this potential nicely toward the end of its 10-Q filing:

“We believe the combination of the Company’s recent success in
tactically enhancing the NHRA on ESPN2, increased advertising and
marketing spending and the addition of one or more sales people will
drive demand for our products and will increase revenue and cash flow.”

Management has also been successful in lowering interest expense by
37.4%, raising over $1 million to bolster its balance sheet, and
ultimately reducing its shareholders’ deficit by 13.2%. If the
$260,000-plus in cinema orders had been included in its third quarter
results, the company would have also reported a 10% improvement in
revenues for the quarter year over year.

As a result, investors in the home entertainment space, including
companies like Dolby Laboratories Inc. (NYSE: DLB) or Sony Corporation
(NYSE: SNE), may want to take a closer look at the company given these
upcoming catalysts and financial improvements.

Additional Information


Except for the historical
information presented herein, matters discussed in this release contain
forward-looking statements that are subject to certain risks and
uncertainties that could cause actual results to differ materially from
any future results, performance or achievements expressed or implied by
such statements. Emerging Growth LLC is not registered with any
financial or securities regulatory authority, and does not provide nor
claims to provide investment advice or recommendations to readers of
this release. For making specific investment decisions, readers should
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