UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

x	ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the fiscal year ended: December 31, 2015

¨	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from___________ to ___________

For the fiscal year ended: December 31, 2014

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from________ to ________

Commission File No.: 000-54331

THE GUITAMMER COMPANY

(Exact name of registrant as specified in its charter)

Nevada		61-1650777
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

6117 Maxtown Road, Westerville, OH 43082

(Address of principal executive offices)

Registrant’s telephone number, including area code: (614) 898-9370

Securities registered pursuant to Section 12(b) of the Exchange Act: None

Securities registered pursuant to Section 12(g) of the Exchange Act:

Common Stock, Par Value $0.001

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ¨ No x

Indicate by check mark whether the registrant has (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x¨ No ¨x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S- K (§229.405) is not contained herein, and will not be contained, to the best of the registrant'’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

The aggregate market value of the voting and non-voting common equity held by non-affiliates as of June 30, ~~2014~~2015, was $76,~~859~~973,~~274~~736 (computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity as of the last business day of the registrant's most recently completed second fiscal quarter). For purposes of the foregoing calculation only, directors, executive officers, and holders of 10% or more of the issuer’s common capital stock have been deemed affiliates.

The number of shares outstanding of the Registrant’s Common Stock as ~~March~~August 1331, ~~2015~~2016 was 83,~~187~~343,~~998.~~057

DOCUMENTS INCORPORATED BY REFERENCE:

None.

THE GUITAMMER COMPANY

Annual Report on Form 10-K

TABLE OF CONTENTS

		Page
PART I
Item 1.	Business		3
Item 1A.	Risk Factors		910
Item 1B.	Unresolved Staff Comments		910
Item 2.	Properties		910
Item 3.	Legal Proceedings		910
Item 4.	Mine safety disclosures		910
PART II
Item 5.	Market for our Common Equity and Related Stockholder Matters		1011
Item 6.	Selected Financial Data		1112
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations		1112
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk		17
Item 8.	Financial Statements and Supplementary Data		17
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosures		18
Item 9A.	Controls and Procedures		18
Item 9B.	Other Information		19
PART III
Item 10.	Directors, Executive Officers and Corporate Governance		20
Item 11.	Executive Compensation		22
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		30
Item 13.	Certain Relationship and Related Transactions, and Director Independence		31
Item 14.	Principal Accountant Fees and Services		33
PART IV
Item 15.	Exhibits and Financial Statement Schedules		34
~~Signatures~~	Signatures		4140

Item 1. Business.

Historical Overview

The Guitammer Company (“Guitammer-Ohio”) was incorporated in Ohio on March 6, 1990, as a research, development and licensing company and manufacturer and marketer of low frequency audio transducers that allows users to feel low frequency sound (“bass”) like a subwoofer but silent. (See Articles of Incorporation and amendments thereto, Exhibits 3.0 through 3.2 inclusive, incorporated herein by reference.)

On May 18, 2011, Guitammer-Ohio caused the formation of a Nevada corporation with the same name (the “Registrant” “Company”, “Guitammer-Nevada”, “we”, “us” and “our”) and entered into a Plan and Agreement of Reorganization with Guitammer-Nevada pursuant to which (i) the shareholders of Guitammer-Ohio would exchange (on a one (1) for thirty-one thousand, two hundred and six (31,206) shares basis) their aggregate 1,602.3 issued and outstanding shares of common stock for an aggregate of 50,001,374 shares of Common Stock, par value $0.001 per share, of Guitammer-Nevada evidencing the same proportional interest in Guitammer-Nevada as they held in Guitammer-Ohio, and (ii) option and warrant holders to purchase an aggregate of 1,397.7 shares of common stock of Guitammer-Ohio would exchange (on a one (1) for thirty-one thousand, two hundred and six (31,206) shares basis) their options and warrants for options and warrants to purchase an aggregate of 43,616,626 shares of Common Stock, par value $0.001 per share, of Guitammer-Nevada in the same proportional interest in Guitammer-Nevada as they held in Guitammer-Ohio (the “Reorganization”). In addition, the Company issued to two lenders warrants to purchase shares of Guitammer-Ohio which because of the Reorganization would be converted into warrants to purchase an aggregate of 225,000 shares of our Common Stock, par value $0.001 per share. In order to save time and expense of creating and issuing new Guitammer-Nevada options and warrants, the Company’s Board of Directors passed a resolution that the outstanding Guitammer-Ohio options and warrants would be and are deemed to be and constitute the Guitammer-Nevada options and warrants (on the said 1 for 31,206 shares basis) to purchase an aggregate of 43,841,626 shares of our Common Stock.

The name, Guitammer – pronounced “Git”-“tammer” – comes from the conjunction of the words “guitar” and “hammer”. In January 1991 we finished development of and licensed for sale, our original product, the Hammer Jammer™, a patented guitar accessory. Our initial products (low frequency audio transducers) were developed to solve a problem of our founder, who was a musician and unable to feel the low frequency end of the music he was playing without turning the stage monitors up very loud which interfered with the playing ability of the rest of the musicians. Today our principal product is a low frequency transducer sold under the trademarked brand name ~~ButtKicker®~~ButtKickerÒ (“ButtKicker”). The ButtKicker enables the user to feel low frequency sound (or bass) in a realistic, powerful and exciting way. However, unlike the overly loud, booming subwoofers with which most people are familiar, the ButtKicker brand products enables the end user to accurately experience – i.e. “feel” – “bass” or low frequency vibrations without creating any sound.

ButtKicker brand products are used by around the world by cinemas, home theater and video game enthusiast, by leading musicians and for commercial applications including simulators and industrial applications.

In 2007 we began to develop “4D Sports powered by ButtKicker”, originally named “ButtKicker Live!®Ò” , which enables haptic and tactile events to be broadcast in addition to and distinct from a live broadcasts’ audio and video. In March of 2011 the Company was issued US Patent #7,911328 for the “Capture and remote reproduction of haptic events in synchronous association with the video and audio capture and reproduction of these events”. In late 2011 we began marketing this technology to potential customers in the sports, broadcast and distribution business (i.e., cable, DBS, and FTTH companies).

3We are focused on increasing the deployment and monetization of our patented broadcast technology, supported by on-going cinema and consumer hardware sales.

We3 ~~are~~Table ~~focused on increasing the deployment and monetization~~ of ~~our patented broadcast technology, supported by on-going cinema and consumer hardware sales.~~Contents

Broadcast ~~and Consumer Electronics~~ Market Sizes

* The consumer electronics industry was forecast to be a record $211.3 billion by the Consumer Electronics Association. * Audience includes over 59mm digital cable, 44mm satellite and approximately 7mm FTTH TV subscribers. * ESPN is available in ~ 100 million households and the NBC Sports Network in over 75 million households. * Number of sports and conference specific cable ~~networksare~~networks are increasing and their ~~penetrationis~~penetration is growing. * “Over-the-Top” Content and “Second Screen” / TV ~~Everywhere~~ is ~~seen~~an ~~to be a~~ $1818B ~~Billion~~market ~~marketopportunity~~opportunity.

Broadcast Technology – “4D Sports powered by ButtKicker”; ButtKicker Live!®Ò

In March of 2011 the Company was issued US Patent #7,911328 for the “Capture and remote reproduction of haptic events in synchronous association with the video and audio capture and reproduction of these events”. In late 2011 we began marketing this technology to potential customers in the sports, broadcast and distribution business (i.e., cable, DBS, and FTTH companies).

We believe that the benefits, market opportunities and competitive advantages of our broadcast technology include the following:

· The Company developed the technology; owns the patent for haptic-tactile -“4D”- broadcasting. As such, any future broadcast that includes haptic events - feeling, tactile, motion - will be subject to licensing from the company. ~~This patent is less than four years old.~~ · The Company believes this is analogous to one company owning the patents for HD or 3D TV and being able to secure a license fee from every device – STB, TV, streaming box, end user hardware, etc. – that decodes and utilizes haptic-tactile data. · The ability to monetize value added content, by way of “micro transactions” that literally turn the data feed on or off from a live action sport and allow fans at home to “play as” their favorite player, is a significant revenue opportunity for all the stakeholders involved – the sport, the athletes / teams, the broadcasters, the distribution (cable, FTTH, IPTV) partners and Guitammer. · Licensing the broadcast patent and the hardware installs that are bundled with content in a manner similar to TiVo or Sling box. Cable and satellite TV providers may also offer subscribers a premium bundle that can also provide a recurring revenue stream. · The opportunity to license and/or co-brand products for the end user to other large consumer electronics manufacturers. · Luxury boxes, premium seating area and “fan zones” can be equipped with the Companies broadcast and hardware solutions to provide a more compelling and engaging in-arena and in-stadium fan experience.

4 Table of Contents

We ~~believes~~believe that haptic- tactile broadcasting combined with growing trend of “over-the-top” content and the “second screen” viewer experiences, along with the increasing deployment of internet or IPTV broadcasting, will allow it to offer value added opportunities to broadcasters, ~~distributers~~distributors and sports leagues that enable its viewers to “play as” or “drive as” their favorite or fantasy player as a way to gain and maintain customers. Additionally, we see a large opportunity to generate revenue by being able to charge the end user an additional small fee ~( ($0.99 – $1.99) on a per player or driver basis.

On January 29, 2015, the Company filed additional US and International patents to help expand its intellectual property in the broadcast markets, (US Application No. 14/609,185 and Application No. PCT/US2015/013558) for “HAPTIC-TACTILE, MOTION OR MOVEMENT SIGNAL CONVERSION SYSTEM AND ASSEMBLY” with Mark Luden as the inventor and assigned to The Guitammer Company.

InOn ~~July~~August of29, ~~2013~~2014 the Company, ~~and~~ the ~~NHRA~~San ~~executed~~Jose ~~the~~Sharks (“~~Broadcast~~Sharks”) ~~Technology~~NHL hockey team and ~~Promotional~~Comcast ~~Rights~~SportsNet ~~Agreement~~California (“CSNCA”) ~~between~~executed ~~NHRA~~a ~~and~~“Letter ~~The~~Agreement ~~Guitammer~~Regarding ~~Company.~~Technology ~~The~~Initiative” ~~NHRA~~to ~~telecasts~~integrate ~~were~~Guitammer’s broadcast ~~with~~technology anin ~~enhanced~~the ~~tactile~~SAP ~~effect~~Center ~~(in~~at ~~“4D~~San ~~powered~~Jose byand ~~ButtKicker”~~into ~~beginning~~the ~~with~~CSNCA’s ~~their~~telecasts ~~September~~of ~~14th,~~the ~~2013~~San ~~telecast~~Jose ~~and~~Sharks ~~all~~home ~~subsequent~~games ~~2013~~at ~~telecasts~~the onSAP ~~ESPN2~~Center.) WeDuring ~~released~~the ~~“The~~2014/15 ~~Making~~NHL season, all of ~~Tactile~~the ~~Broadcasting”~~CSNCA’s inSharks telecasts were successfully broadcast with the ~~fall~~addition of ~~2013~~the ~~explaining~~haptic ~~and~~signal; ~~demonstrating~~i.e. ~~this~~“in ~~new~~4D”, ~~broadcast~~using Guitammer’s technology. ~~available~~Reviews onwere very favorable including this review which aired in the ~~Guitammer~~San ~~YouTube~~Jose ~~channel~~area orin ~~directly~~January atof ~~http~~2015: https://www.youtube.com/watch?~~feature~~v=~~player_embedded~~0AkMpTo8tXs&vfeature=~~RQ3lPbtDt5E~~ youtu. ~~This Agreement ended in January of 2014.~~be

OnIn ~~August~~July ~~29,~~of ~~2014~~2013 the Company, and the ~~San~~NHRA ~~Jose~~executed ~~Sharks~~the (“~~Sharks”)~~Broadcast ~~NHL~~Technology ~~hockey team~~ and ~~Comcast~~Promotional ~~SportsNet~~Rights ~~California (“CSNCA~~Agreement”) ~~executed~~between aNHRA ~~“Letter~~and ~~Agreement~~The ~~Regarding~~Guitammer ~~Technology~~Company. ~~Initiative”~~The toNHRA ~~integrate~~telecasts ~~Guitammer’s~~were broadcast ~~technology~~with inan ~~the~~enhanced ~~SAP~~tactile ~~Center~~effect at(in ~~San~~“4D ~~Jose~~powered ~~and~~by ~~into~~ButtKicker” ~~the~~beginning ~~CSNCA’s~~with ~~telecasts~~their ofSeptember ~~the~~14th, ~~San~~2013 ~~Jose~~telecast ~~Sharks~~and ~~home~~all ~~games~~subsequent at2013 ~~the~~telecasts ~~SAP~~on ~~Center~~ESPN2.) ~~for~~We ~~the~~released ~~2014/15~~“The ~~NHL~~Making ~~season,~~of ~~and~~Tactile toBroadcasting” ~~collectively~~in ~~promote and market~~ the ~~enhanced~~fall ~~broadcast~~of to2013 ~~the~~explaining ~~San Jose Sharks~~ and ~~CSNCA~~demonstrating ~~viewers.~~this ~~Starting~~new ~~from~~broadcast ~~the~~technology ~~first~~available ~~home game~~ on ~~October 11th to present,~~ the ~~CSNCA’s~~Guitammer ~~Sharks~~YouTube ~~telecasts~~channel ~~have~~or ~~successfully~~directly ~~been~~at ~~broadcast~~http://www.youtube.com/watch?feature=player_embedded&v=RQ3lPbtDt5E ~~in 4D using Guitammer’s technology~~. ~~Recent~~This ~~favorable~~Agreement ~~reviews~~ended ~~of these “4D” broadcasts include this review which aired~~ in ~~the San Jose area in~~ January of ~~2015: http://wn~~2014.~~ktvu.com/clip/11022053/san-jose-new-technology-for-sharks-fans-watching-from-home.~~

We are actively ~~involved~~engaged with the Society of Motion Pictures & Television Engineers (SMPTE) working to draft standards for haptic-tactile broadcasting that we believe ~~may~~will ~~assist~~help infacilitate wide adoption of haptic-tactile broadcasting using our technology.

We are ~~actively~~ pursuing more opportunities and strategic partnerships in the sports and broadcast space to deploy this technology in ~~2015~~2016.

Cinema Sales

In ~~2014~~2015 we continued to increase our cinema deployment notably with AMC ~~Prime~~Theatres for use in their “Dolby Cinema at AMC” in the US and with Lumiere Pavilions in China.

InMore ~~late~~information ~~2013~~regarding ~~AMC~~our ~~Theatres~~worldwide ~~introduced~~cinema ~~it’s~~deployments ~~new~~including ~~theater~~locations ~~concept:~~and ~~“Prime”~~product -information ~~“feel~~can ~~every~~be ~~WOW.”~~found [at http://www.~~amctheatres~~guitammer.com/~~amc-prime] and each of these new concept~~ theaters features ButtKicker brand transducers in every seat in the theater auditorium. So far, every seat, more than 1,900 AMC Theatre Prime seats in all 10 of their locations nationwide are outfitted with our products.

~~More~~5 ~~than~~Table ~~400,000 people will experience a movie using Guitammer’s “4D” technology in the US in 2014; over 500,000 in China.* (*According to average auditorium attendance per the National Assoc.~~ of ~~Theater Operators multiplied by the total number of deployed “4D powered by ButtKicker” cinema seats.)~~Contents

We continue to increase our focus on cinema sales for the following reasons: Itit offers a large global market opportunity; and cinema installations can be a profitable cash flow positive means to large scale consumer advertising that we believe are more advantageous to the Company than “Big Box” product placements and in-store demonstrations. asCinema ~~cinema~~ sales can result in a two -hour product demonstration; ~~i.e.,~~ while ~~watching~~viewing the movie.

5Marketing

~~Marketing~~Our marketing efforts in 2015 primarily focused on our efforts with the San Jose Sharks and Comcast SportsNet CA by way of a 30 second commercial that is designed to drive the fan to our direct sales website: www.shakemycouch.com .

Our ~~marketing~~television ~~efforts~~commercials incan ~~2014~~be ~~primarily~~seen ~~focused~~at onwww.shakemycouch ~~our~~.com ~~efforts with the San Jose Sharks~~ and ~~Comcast~~all ~~SportsNet CA by way~~ of acompanies ~~:30~~video ~~second~~and ~~commercial~~commercials ~~that~~can isbe ~~designed~~seen toat ~~drive~~ the ~~fan~~Guitammer toYouTube ~~our direct sales website~~channel: https://www.~~shakemycouch~~youtube.com /user/Guitammer.

~~Our~~Other ~~television~~marketing ~~commercials~~efforts ~~can~~consist beof ~~seen~~online atpromotions ~~www~~with our major partners such as Amazon.~~shakemycouch.~~com ~~and~~sponsorships ~~all~~ of ~~companies~~online ~~video~~racing and ~~commercials~~simulator ~~can~~leagues beand ~~seen~~teams, atand ~~the~~endorsements ~~Guitammer~~from ~~YouTube~~well ~~channel:~~known ~~https://www~~musicians.~~youtube.com/user/Guitammer.~~

~~Other~~ButtKickerÒ ~~marketing~~Brand ~~efforts~~Consumer ~~consist~~Electronics ofHardware ~~online promotions with our major partners such as Amazon.com sponsorships of online racing and simulator leagues and teams, and endorsements from well know musicians.~~

We sell three (3) main categories of hardware products: 1) ButtKicker brand ~~Consumer~~low ~~Electronics~~frequency ~~Hardware~~audio transducers, 2) audio amplifiers and 3) accessories, with different sizes and configurations based upon the market and use. We sell more than twenty (20) different standalone and all-in-one packaged products. Our products include six (6) different types of ButtKicker brand transducers which provide the vibration or low frequency audio (bass) effects, several models of amplifiers, two wireless options, and the accessories necessary to facilitate the use of our products in our core markets. Our products are sold for use in home theater, cinema, gaming in addition to utilization by musicians and professional audio technicians.

WeThree ~~sell~~of ~~three~~our ~~(3)~~most ~~main~~popular ~~categories~~products ofare ~~hardware~~the ~~products:~~wireless 1) ButtKicker ~~brand low frequency audio transducers~~Kit, 2)the ~~audio~~ButtKicker ~~amplifiers~~LFE ~~and~~Kit ~~3) accessories, with different sizes~~ and ~~configurations based upon~~ the ~~market and use. We sell more than twenty (20) different standalone and all-in-one packaged products. Our products include six (6) different types of~~ ButtKicker ~~brand~~Gamer2, ~~transducers~~ which provide the vibration or low frequency audio (bass) effects, several models of amplifiers, two wireless options, and the accessories necessary to facilitate the use of our products in our core markets. Our products are ~~sold~~described ~~for use~~ in ~~home~~greater ~~theater,~~detail ~~cinema, gaming, and by musicians and professional audio technicians~~below.

~~Three~~Wireless ~~of our most popular products are the wireless~~ ButtKicker Kit~~, the ButtKicker LFE Kit and the ButtKicker Gamer2, which are described in greater detail below.~~

~~Wireless~~The wireless ButtKicker Kit is designed for home theater and gaming use. Included in the kit is one ButtKicker Advance low frequency transducer, one ButtKicker Power Amplifier with wireless send and receive units and remote control, one Chair/Couch Mounting Kit, and all the cables and wires necessary to hook the system up to home theater and gaming systems. The mounting kit enables the average consumer to quickly and easily use the ButtKicker with any couch or chair. The entire system easily integrates into existing home theater and gaming systems as well. The wireless ButtKicker Kit currently retails from $199 to $399 depending on various marketing promotions and discounts available from time to time.

~~The wireless~~ ButtKicker ~~Kit~~LFE is designed for home theater and gaming use. Included in the kit is one ButtKicker Advance low frequency transducer, one ButtKicker Power Amplifier with wireless send and receive units and remote control, one Chair/Couch Mounting Kit, and all the cables and wires necessary to hook the system up to home theater and gaming systems. The mounting kit enables the average consumer to quickly and easily use the ButtKicker with any couch or chair. The entire system easily integrates into existing home theater and gaming systems as well. The wireless ButtKicker Kit currently retails from $199 -$399 depending on various marketing promotions and discounts available from time to time..

The ButtKicker LFE Kit is designed for home theater and gaming use. Included in the kit is one ButtKicker LFE low frequency transducer, one ButtKicker 1,000 watt power amplifier, one Chair/Couch Mounting Kit, and all the cables and wires necessary to hook the system up to home theater and gaming systems. The mounting kit enables the average consumer to quickly and easily use the ButtKicker with any large three-person couch or chair. The entire system easily integrates into existing home theater and gaming systems as well. The ButtKicker LFE Kit currently retails from $599 -$699.

~~The~~6 ~~ButtKicker~~Table ~~LFE~~of Kit is designed for home theater and gaming use. Included in the kit is one ButtKicker LFE low frequency transducer, one ButtKicker 1000 watt power amplifier, one Chair/Couch Mounting Kit, and all the cables and wires necessary to hook the system up to home theater and gaming systems. The mounting kit enables the average consumer to quickly and easily use the ButtKicker with any large three person couch or chair. The entire system easily integrates into existing home theater and gaming systems as well. The ButtKicker LFE Kit currently retails for $599 -$699.Contents

ButtKicker Gamer

The ButtKicker Gamer2 (the “Gamer”) is designed for gaming and simulator use with video games for use with ~~PC’s~~personal computers, game consoles, ~~and~~along with both racing and flight simulators. The Gamer enables the user to precisely and powerfully feel gunshots, explosions and special effects of video games as well as the bass beat for music. The Gamer works with all types of computers, all gaming systems and any type of digital music player; including any MP3 player or iPod. It works by simply splitting the audio signal from the PCpersonal computer, game console or iPod into the Gamer’s amplifier. The Gamer easily attaches to the center post of most office type chairs. Included in the kit are one ButtKicker Gamer with integrated chair mounting arm, one ButtKicker Gamer power amplifier and all the cables and wires necessary to hook the system up to ~~PCs~~personal computers, gaming systems and digital music players. A Quick Start Guide and manual are also included with the Gamer. The Gamer is priced at between $129 and $149.

6Sales Strategy

~~Sales~~Our ~~Strategy~~products are sold worldwide through independent manufacturers’ sales representatives, dealers and distributors. Our sales network includes custom home theater, specialty electronics, furniture, musician, professional audio, consumer home theater and electronics dealers.

~~Our~~Historically, ~~products~~approximately ~~are~~20% ~~sold~~- ~~worldwide~~54% ~~through~~of ~~independent~~our ~~manufacturers’~~ sales ~~representatives,~~have ~~dealers~~been ~~and~~outside ~~distributors~~the United States. Our ~~sales~~products ~~network~~have ~~includes~~been ~~custom~~sold ~~home~~globally ~~theater,~~having ~~specialty~~active ~~electronics,~~distributors ~~furniture,~~and ~~musician,~~dealers ~~professional~~throughout ~~audio,~~the ~~consumer home theater and electronics dealers~~world.

~~Historically~~Additionally, ~~approximately~~we ~~20%~~have -an ~~54%~~royalty offee ~~our~~agreement ~~sales~~with ~~have~~Pearl ~~been~~Drums ~~outside~~whereby ~~the~~they ~~United~~sell ~~States.~~“Pearl’s ~~Our~~Throne ~~products~~Thumper ~~have~~by ~~been~~ButtKicker” ~~sold~~to ~~around~~ the ~~world.~~musician Weand ~~have~~pro ~~active~~audio ~~distributors~~markets ~~and dealers~~ in ~~Canada,~~the ~~United~~US ~~Kingdom, France, Germany, Denmark, Holland, Switzerland, Belgium, Israel, Russia, China, Hong Kong, Turkey, Brazil,~~ and ~~Australia / New Zealand~~Europe.

~~Additionally,~~We have historically not had large amounts of sales through traditional brick and mortar retail stores as we have anfocused ~~agreement~~our efforts with ~~Pearl~~large ~~Drums~~online ~~whereby~~resellers ~~they~~such ~~sell~~as ~~“Pearl’s~~Amazon.com, ~~Throne~~MusiciansFriend.com ~~Thumper~~and byother ~~ButtKicker”~~specialty toconsumer electronics retailers. In the ~~musician~~future, ~~and~~we ~~pro~~may ~~audio~~choose ~~markets~~to insell ~~the~~lower USpriced ~~and~~items ~~Europe~~which ~~and~~appeal ~~pay~~more usto aindividual ~~per~~consumers ~~unit~~in ~~royalty~~more ~~fee~~traditional brick and mortar retail stores.

WeOur ~~have~~ButtKicker ~~historically~~brand ~~not~~hardware ~~had large amounts of~~ sales ~~through~~strategy ~~traditional~~is ~~brick~~to ~~and~~continue ~~mortar~~to ~~retail~~increase ~~stores,~~our ~~but~~cinema ~~have~~sales ~~concentrated~~to ~~more~~help ~~with~~build ~~the~~brand ~~large~~awareness ~~online~~so ~~resellers such~~ as ~~Amazon.com and MusiciansFriend.com and with specialty electronics retailers. Moving forward, however, we may choose~~ to ~~sell~~increase ~~lower~~our ~~priced~~consumer ~~items~~hardware ~~which~~sales ~~appeal~~through ~~more~~all toof ~~individual~~our ~~consumers~~distribution ~~and we may seek to sell at brick and mortar retail stores~~channels.

Our “4D Sports powered by ButtKicker” ~~brand~~broadcast ~~hardware~~technology sales strategy is to ~~continue~~form tostrategic ~~increase~~partnerships with larger companies involved in making broadcast, sports more immersive for fans and partner companies and use our ~~cinema~~technology ~~sales~~in conjunction with their product offerings and marketing efforts to help ~~build~~facilitate ~~brand~~those ~~awareness~~goals. soWe asare toengaged ~~increase~~in ~~our~~discussions ~~consumer~~with ~~hardware~~several ~~sales~~of ~~through~~these ~~all~~types of companies. Additionally, we are in discussions directly with other rights holders and broadcast partners to deploy our ~~distribution~~broadcast ~~channels~~technology.

~~Our~~7 ~~“4D~~Table Sports powered by ButtKicker” broadcast technology sales strategy is to form strategic partnerships with larger companies involved in making broadcast, sports more immersive for fans and partner companies and use our technology in conjunction with their product offerings and marketing efforts to help facilitate those goals. We are in early stage discussions with several of ~~these types of companies. Additionally, we are in discussions directly with other rights holders and broadcast partners to deploy our broadcast technology.~~Contents

Manufacturing

We outsource the manufacturing of our products; however, we do perform kitting and light assembly of several products in our Westerville, Ohio facilities. The Company does have a material contracts in place with LFT manufacturing (a related party, see Footnote 11). With our other suppliers, we purchase products under agreed upon payment and supply terms that may change from time to time.

Some of our products that are sourced in China are assembled by a manufacturing partner in the State of Kentucky. Additionally, some low volume products are sourced locally in Central Ohio. We are focused on reducing our cost of goods sold and sourcing all of our products as finished goods from China. We are heavily dependent upon product purchased from ~~four~~three principal suppliers.: ~~Our principal suppliers are~~ Eminence Speaker, LLC (Eminence, KY); Shenzhen Actiway Industrial Co. - Shenzhen Actiway Electronics Co., Ltd. Factory (Shenzhen, China); and LFT Manufacturing, LLC (Westerville, Ohio) ~~( and Sonavox Electronics SIP, Sonavox Canada Inc~~. ~~(Suzhou, China and Markham, Ontario, Canada).~~ These ~~four~~three suppliers accounted for approximately 9389% of Company product purchases in ~~2014~~2015 and ~~2013. Purchases from Eminence were 31~~80% ~~and 52% respectively of our total product purchases~~ in 2014 ~~and 2013~~. Purchases from ~~Actiway~~Eminence were 300% and 930% respectively of our total product purchases in ~~2014~~2015 and ~~2013~~2014. Purchases from ~~LFT~~Actiway were 20% and 030% ~~(not a supplier in 2013)~~ respectively of our total product purchases in ~~2014~~2015 and ~~2013~~2014. Purchases from ~~Sonavox~~LFT were 1369% and 3220% respectively of our total product purchases in ~~2014~~2015 and ~~2013~~2014. We expect the percentages of Company product purchases from LFT to increase ~~slightly~~ while the percentages of Company product purchases from the other suppliers will decrease ~~slightly~~proportionately for ~~2015~~2016.

7Warehousing and Fulfillment

~~Warehousing~~We ship most of our products from our warehouse in Westerville, Ohio. We also direct-ship products to Asia and ~~Fulfillment~~Europe from our manufacturing partners in China significantly reducing transportation time and handling costs.

WeBroadcast ~~warehouse~~Technology and ~~ship~~Consumer ~~most~~Hardware of our products from our warehouse in Westerville, Ohio. We also direct-ship products to Asia and Europe from our manufacturing partners in China, which saves us time and transportation and handling costs.Competition

~~Broadcast~~We ~~Technology~~are not aware of competing products, technologies or plans to introduce anything to the market that is similar to our broadcast technology for live sports and ~~Consumer~~events ~~Hardware~~and ~~Competition~~believe we may very well have a “blocking patent” in this space. Accordingly, all brands of end user hardware, existing and yet to be developed, as well as broadcasters, distributors and content providers, would have to license Guitammer’s broadcast technology to take advantage of the technology.

WeThere are ~~not~~several ~~aware~~competitors ofin ~~competing~~the ~~products,~~low ~~technologies~~frequency or ~~plans~~tactile totransducer ~~introduce anything to the~~ market ~~that~~segment is(described ~~similar~~below), towe ~~our broadcast technology for live sports and events and~~ believe wethat ~~may~~the ~~very~~ButtKicker ~~well~~Brand ~~have a “blocking patent” in this space. If this~~ is ~~true~~the ~~then~~leading ~~all~~brand ~~brands~~due ~~of end user hardware, existing and yet~~ to beits ~~developed~~power, asmusical ~~well~~accuracy ~~as broadcasters, distributors~~ and ~~content providers would have to license Guitammer’s broadcast technology in order to make use of it~~longevity.

~~There~~8 ~~are~~Table ~~several~~of ~~competitors in the low frequency or tactile transducer market segment (described below), we believe that the ButtKicker brand is the leading brand due to its power, musical accuracy and longevity.~~Contents

Competitive advantages which we believe ButtKicker ~~brand~~Brand products have are:

~~Lower Range:~~	~~ButtKicker~~Lower ~~transducers have a greater low frequency range than most other device (5 – 200 Hertz (“Hz”)) and have a resonant frequency of 9Hz, well below the range of most of the competition.~~Range:	ButtKicker transducers have a greater low frequency range than most other device (5 – 200 Hertz (“Hz”)) and have a resonant frequency of 9Hz, well below the range of most of the competition.
~~Musical Accuracy:~~	~~ButtKicker~~Musical ~~transducers provide a more realistic listening experience possible. ButtKicker transducers have a smooth, musical response without resonant frequency peaks or hot spots.~~Accuracy:	ButtKicker transducers provide a more realistic listening experience possible. ButtKicker transducers have a smooth, musical response without resonant frequency peaks or hot spots.
~~Power:~~	~~ButtKicker transducers have the power to produce more aggressive sound reproduction, at a lower total cost and with more amazement which consumers are demanding.~~Power:	ButtKicker transducers have the power to produce more aggressive sound reproduction, at a lower total cost and with more amazement which consumers are demanding.
~~Affordability:~~	~~One ButtKicker transducer can shake a heavy three-person couch and can replace several of the competitors’ units and typically cost one-half to one-fourth of the competitors’ prices.~~Affordability:	One ButtKicker transducer can shake a heavy three-person couch and can replace several of the competitors’ units and typically cost one-half to one-fourth of the competitors’ prices.
~~Consumer Packaging:~~	~~ButtKicker~~Consumer brand products are designed for mass market consumer electronics distribution with the appropriate packaging, pricing and all-in-one kit ease of use that the average consumer requires in order to purchase and install.Packaging:	ButtKicker brand products are designed for mass market consumer electronics distribution with the appropriate packaging, pricing and all-in-one kit ease of use that the average consumer requires in order to purchase and install.

8Intellectual Property

~~Intellectual~~We ~~Property~~have a registered trademark for the name “ButtKicker” and the name “ButtKicker Live!”. In July 1998, Marvin Clamme filed a comprehensive patent for the Low Frequency Vibrator, ButtKicker technology. Subsequently, Mr. Clamme assigned to us all rights, title and interest to the patent in the United States and all foreign countries. In 1999, we were awarded a patent for the technology United States Patent Number 5,973,422. We have since secured patents in Europe, Canada and Japan for this technology.

WeIn ~~have~~May a2009, ~~registered~~we ~~trademark~~filed ~~for~~a ~~the~~provisional ~~name~~patent ~~“ButtKicker”~~application ~~and~~for ~~the~~our ~~name “~~ButtKicker Live!” InTechnology ~~July~~which ~~1998,~~was ~~Marvin~~assigned ~~Clamme~~to ~~filed~~us aby ~~comprehensive patent for the Low Frequency Vibrator, ButtKicker technology~~Mr. ~~Subsequently~~Luden, Mr. Clamme ~~assigned~~and toMr. usMcCaw. ~~all~~On ~~rights~~March 22, ~~title~~2011, ~~and interest to~~ the ~~patent in the~~ United States Patent and ~~all~~Trademark ~~foreign~~Office ~~countries.~~issued Insuch ~~1999, we were awarded a~~ patent ~~for~~to the ~~technology~~Company ~~United~~under ~~States~~patent ~~Patent~~number ~~Number 5~~7,~~973~~911,~~422~~328. ~~We have since secured patents in Europe, Canada and Japan for this technology.~~

In ~~May~~September ~~2009~~2010, weMarvin Clamme filed a provisional patent application for ~~our~~a ~~ButtKicker~~new ~~Live!~~type ~~Technology~~of low frequency transducer which was assigned to us by Mr. ~~Luden, Mr~~Clamme. ~~Clamme~~“Vibration Transducer and ~~Mr.~~Actuator” ~~McCaw~~Application No. On61,403,033, ~~March~~dated ~~22,~~September ~~2011~~6, ~~the~~2010. ~~United~~A ~~States~~patent ~~Patent~~application ~~and~~was ~~Trademark~~filed ~~Office~~for ~~issued~~this ~~such~~invention ~~patent~~on toOctober ~~the~~16, ~~Company~~2012 ~~under~~for ~~patent~~both ~~number~~the ~~7,911,328~~United States and Europe.

InOn ~~September~~January ~~2010~~29, ~~Marvin~~2015, ~~Clamme~~we filed aInternational ~~provisional~~and ~~patent~~US ~~application~~patents ~~for~~(US aApplication ~~new type of low frequency transducer which was assigned to us by Mr~~No. ~~Clamme.~~14/609,185 ~~“Vibration Transducer~~ and ~~Actuator”~~ Application No. ~~61,403,033,~~PCT/US2015/013558) ~~dated~~for ~~September 6~~“HAPTIC-TACTILE, ~~2010.~~MOTION AOR ~~patent~~MOVEMENT ~~application~~SIGNAL ~~was~~CONVERSION ~~filed~~SYSTEM ~~for~~AND ~~this~~ASSEMBLY” ~~invention~~with onMark ~~October~~Luden ~~16,~~as ~~2012~~the ~~for~~inventor ~~both~~and ~~the~~assigned ~~United~~to ~~States~~The ~~and~~Guitammer ~~Europe~~Company.

On January 29, 2015, we filed International and US patents (US Application No. 14/609,185 and Application No. PCT/US2015/013558) for “HAPTIC-TACTILE, MOTION OR MOVEMENT SIGNAL CONVERSION SYSTEM AND ASSEMBLY” with Mark Luden as the inventor and assigned to The Guitammer Company.Employees

~~Employees~~We have seven full-time employees as well as several individuals working for us in contracted roles in manufacturing, sourcing, marketing, developing and selling our ButtKicker Brand hardware and “4D Sports powered by ButtKicker”; ButtKicker Live! Broadcast technology. None of our employees are covered by a collective bargaining agreement. We believe that we have a good relationship with our employees and contractors.

We9 ~~have~~Table eight full-time employees as well as several individuals working for us in contracted roles in manufacturing, sourcing, marketing, developing and selling our ButtKicker brand hardware and “4D Sports powered by ButtKicker; ButtKicker Live! Broadcast technology. None of ~~our employees are covered by a collective bargaining agreement. We believe that we have a good relationship with our employees and contractors.~~Contents

Item 1A. Risk Factors.

Guitammer is a smaller reporting company, and as such, is not required to provide information pursuant to this item.

Item 1B Unresolved Staff Comments.

None.

Item 2. Properties.

We are located at 6117 Maxtown Road, Westerville, Ohio 48032. We lease approximately 15,000 square feet of office and warehouse space for $7,~~150~~350 per month. The facilities include a loading dock, drive through overhead door, warehouse space, product development areas, showroom, demonstration theater and corporate offices. On September 1, 2009, the Company entered into a four year lease for the rental of the office and warehouse space expiring on August 31, 2013. In July of 2013, the Company entered into a four year extension of the lease for the rental of the office and warehouse space expiring on August 31, 2017. We believe that our current space is adequate to meet our current needs.

Item 3. Legal Proceedings.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

910 Table of Contents

~~Part~~PART II

The common stock of the Company is traded on the OTC Bulletin Board Market under the symbol GTMM.OB. OnDue ~~March~~to 5the late filing of the Company’s 10-K, the Company was moved to the Pink Sheets until such time the 2015 10-K and 2016 quarterly 10-Q’s are filed within 6 months of the 2015 10-K due date. As of September 19, 2016, the last sales price of the Company's common stock was $0.~~1025~~09.

On May 27, 2011 the Company filed a General Form for the Registration of Securities on Form 10 to register its common stock, par value $0.001 per share pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended. The Registration became effective sixty days later. The Company secured a market maker, Finance 500 of Irvine, CA, who filed a Form 15(c)-211 with FINRA on behalf of the Company. On October 7, 2011 FINRA approved the Form 15(c)-211 and gave the Company the ticker symbol of “GTMM”. The Company began actively trading on November 17, 2011 on the Over-the-Counter Bulletin Board (“OTCBB”) as GTMM.OB.

The following table sets forth the high and low bid prices of the Company's common stock ~~for the periods indicated,~~ as reported by the NASDAQ Trading and Market Services for the periods indicated:

Calendar period	High		Low
2012 First Quarter	$	0.27	$	0.12
2012 Second Quarter	$	0.21	$	0.15
2012 Third Quarter	$	0.20	$	0.14
2012 Fourth Quarter	$	0.35	$	0.08
2013 First Quarter	$	0.20	$	0.12
2013 Second Quarter	$	0.21	$	0.14
2013 Third Quarter	$	0.19	$	0.09
2013 Fourth Quarter	$	0.20	$	.015
2014 First Quarter	$	0.19	$	0.12
2014 Second Quarter	$	0.17	$	0.09
2014 Third Quarter	$	0.16	$	0.02
2014 Fourth Quarter	$	0.16	$	0.03
2015 First Quarter	$	0.13	$	0.07
2015 Second Quarter	$	0.12	$	0.06
2015 Third Quarter	$	0.11	$	0.055
2015 Fourth Quarter	$	0.10	$	0.025
2016 First Quarter	$	0.08	$	0.042
2016 Second Quarter	$	0.125	$	0.09

The table above ~~quotations~~reflects ~~reflect~~ inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

1011 Table of Contents

Dividend Policy

The Company has declared no cash dividends on our common stock, and does not expect to pay cash dividends in the near term. We intend to retain future earnings, ~~if any,~~ to provide funds for operations and the continued expansion of our business.

There are ~~approximately~~ 84 holders of record of the Company's Common Stock as of December 31, ~~2014~~2015.

On February 1, 2012, the Board approved stock option grants in the amount of 600,000 stock options for three of its employees, with an exercise price of $.25 per share with a vesting schedule of 60% on the first anniversary of the grant, 20% on the second anniversary of the grant and the final 20% on the third anniversary of the grant.

On November 26, 2012, the Board approved stock option grants of 3,000,000 stock options to the President and CEO of the Company, with an exercise price of $.25 per share with a vesting schedule of 33 and 1/3% of the options on the first anniversary of the grant, 33 and 1/3% of the options on the second anniversary of the grant and the final 33 and 1/3% on the third anniversary of the grant.

On ~~December~~July 328, 2014, the Board ~~reduced~~of ~~the~~Directors ~~exercise~~authorized ~~price on~~ the ~~600,000~~Company ~~and~~to 3issue 200,000,000 ~~stock~~of ~~options~~Common ~~issued~~Stock onat ~~February~~$0.001 1,per ~~2012~~value ~~and~~per ~~November 26, 2012, respectively, from $~~share.~~25 to $.075.~~

On December 3, 2014, the Board ~~approved~~reduced ~~and~~the ~~granted 1,950,000 stock options to five of its employees, with an~~ exercise price ~~of $.075 per share with a vesting schedule of 60%~~ on the ~~first anniversary of the grant~~600,000 ~~20% on the second anniversary of the grant~~ and ~~the final 20% on the third anniversary of the grant. On December~~ 3, ~~2014~~000, ~~the Board approved and granted 1,500,~~000 stock options toissued ~~two of the Company’s directors with an exercise price of $.075 per share with a vesting schedule of 25%~~ on ~~the~~February ~~first~~1, ~~anniversary~~2012 ofand ~~the~~November ~~grant~~26, ~~25%~~2012, ~~on the second anniversary of the grant~~respectively, ~~25%~~from ~~on the third anniversary of the grant and~~ $.25% ~~on the fourth anniversary of the grant. Full vesting is~~ to ~~occur upon a change in ownership of the Company on the stock options~~$.075.

~~Item~~On 6December 3, 2014, the Board approved and granted 1,950,000 stock options to five of its employees with an exercise price of $.075 ~~Selected~~per ~~Financial~~share ~~Data~~with a vesting schedule of 60% on the first anniversary of the grant, 20% on the second anniversary of the grant and the final 20% on the third anniversary of the grant. On December 3, 2014, the Board approved and granted 1,500,000 stock options to two of the Company’s directors with an exercise price of $.075 per share with a vesting schedule of 25% on the first anniversary of the grant, 25% on the second anniversary of the grant, 25% on the third anniversary of the grant and 25% on the fourth anniversary of the grant. Full vesting is to occur upon a change in ownership of the Company on the stock options.

~~Not~~On ~~required~~May 4, 2015, the Company sold in a private offering to a current Board member and to two other accredited investors that are existing shareholders, a total of 50,000 shares of its Series A Preferred Stock. The Preferred Stock pays an annual dividend of $.80 cents per share (payable in cash or Common Stock at the Company’s discretion) and each share is convertible into 66.67 shares of Common Stock at the Company’s discretion. Forty million shares of Common Stock have been reserved for ~~smaller~~the ~~reporting~~purposes ~~companies~~of payment of dividends on preferred stock and the conversion of Preferred Stock into Common Stock. The Preferred Stock ranks senior to the Common Stock in liquidation.

~~Item~~On 7.June ~~Management’s~~20, ~~Discussion~~2016, ~~and~~the ~~Analysis~~Board of ~~Financial~~Directors ~~Condition~~declared ~~and~~a ~~Results~~dividend to be paid to Preferred Stockholders, on record as of ~~Operation~~March 31, 2016, in common stock at a rate of $0.15 per share.

~~The~~Item ~~following~~6. ~~discussion~~Selected ~~and analysis should be read in conjunction with Guitammer's Audited Consolidated Annual~~ Financial Statements and notes thereto included elsewhere in this Form 10-K (the “Financial Statements”). Except for the historical information contained herein, the discussion in this Form 10-K contains certain forward looking statements that involve risks and uncertainties, such as statements of Guitammer’s plans, objectives, expectations and intentions. The cautionary statements made in this Form 10-K should be read as being applicable to all related forward-looking statements wherever they appear in this Form 10-K. These statements include, without limitation, statements concerning the potential operations and results of Guitammer described below. Guitammer's actual results could differ materially from those discussed here. Factors that could cause or contribute to such differences include, without limitation, those factors discussed herein and in Guitammer's Form 10 Registration Statement.Data

11Not required for smaller reporting companies.

~~RESULTS~~Item OF7. ~~OPERATIONS~~Management’s Discussion and Analysis of Financial Condition and Results of Operation

~~Fiscal~~ The ~~Year~~following ~~ended~~discussion ~~December~~and 31analysis should be read in conjunction with Guitammer's Audited Consolidated Annual Financial Statements and notes thereto included elsewhere in this Form 10-K (the “Financial Statements”). Except for the historical information contained herein, ~~2014~~the ~~compared~~discussion in this Form 10-K contains certain forward looking statements that involve risks and uncertainties, such as statements of Guitammer’s plans, objectives, expectations and intentions. The cautionary statements made in this Form 10-K should be read as being applicable to ~~Fiscal~~all ~~year~~related ~~ended~~forward-looking ~~December~~statements 31wherever they appear in this Form 10-K. These statements include, ~~2013~~without limitation, statements concerning the potential operations and results of Guitammer described below. Guitammer's actual results could differ materially from those discussed here. Factors that could cause or contribute to such differences include, without limitation, those factors discussed herein and in Guitammer's Form 10 Registration Statement.

~~All~~12 ~~references~~Table ~~below to per share and shares~~ of ~~Common Stock of the Company reflect the Reorganization.~~Contents

~~Results~~RESULTS ofOF ~~Operations~~OPERATIONS

~~During~~Fiscal ~~the~~Year ~~second~~ended ~~half~~December ~~of 2013 and the first quarter of 2014~~31, ~~the~~2015 ~~Company~~compared spent considerable capital resources implementing and commercializing its patented haptic-tactile broadcast technology (“ButtKicker Live!®” /“4D Sports powered by ButtKicker”) for the ESPN2 broadcasts of the National Hot Rod Association (NHRA) and in related activities with other broadcast parties in order to ~~prove~~Fiscal that it has the ability to bring the actual feel of live sporting events to sports fans while watching in the comfort of their own home. Because of this, 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 year. ~~The~~ended ~~Company~~December ~~received some cash through the exercise of stock warrants by existing stock holders that lead to improved sales in the 4th quarter of 2014 increasing by approximately $275~~31,~~000~~ ~~over the third quarter of~~ 2014.

OnAll ~~August~~references ~~29,~~below ~~2014 the Company, the San Jose Sharks (“Sharks”) NHL hockey team and Comcast SportsNet California (“CSNCA”) executed a “Letter Agreement Regarding Technology Initiative”~~ to ~~integrate~~per ~~Guitammer’s~~share ~~broadcast technology in the SAP Center at San Jose~~ and ~~into~~shares ~~the~~of ~~CSNCA’s~~Common ~~telecasts~~Stock of the ~~San~~Company ~~Jose~~reflect ~~Sharks home games at~~ the ~~SAP Center for the 2014/15 NHL season, and to collectively promote and market the enhanced broadcast to the San Jose Sharks and CSNCA viewers~~Reorganization. Starting from the first home game on October 11th to present, the CSNCA’s Sharks telecasts have successfully been broadcast in 4D using Guitammer’s technology. The official public launch of this agreement was November 20th, 2014.

~~Management~~Results ~~believes that the continued development and implementation~~ of this broadcast technology will produce the greatest amount of long-term value for its shareholders and will help to enable it to secure the financing needed to purchase adequate levels of all inventory items in future periods while continuing the implementation and commercializing its patented haptic-tactile broadcast technology for live sporting events.Operations

~~Revenue~~During ~~decreased $866,281 or 45.2%, to $1,051,019 for~~ the ~~year~~second ~~ended~~half ~~December~~of ~~31,~~ 2014, ~~compared~~and tothe ~~revenue~~first quarter of $12015,~~917,300~~ ~~for~~ the ~~year~~Company ~~ended~~spent ~~December~~considerable ~~31,~~capital ~~2013.~~resources ~~Shortages~~implementing ofand ~~key~~commercializing ~~inventory~~its ~~items~~patented ~~significantly~~haptic-tactile ~~contributed~~broadcast totechnology ~~the~~(“ButtKicker ~~decrease~~Live!Ò” in/“4D ~~revenue.~~Sports Atpowered ~~December~~by ~~31,~~ButtKicker”) ~~2014,~~for the ~~Company~~Comcast ~~has~~SportsNet aCA ~~sales~~telecasts ~~backorder~~ of ~~more than $375,000. As a result of being able to purchase some of~~ the ~~inventory~~San ~~needed~~Jose bySharks ~~the~~and ~~Company~~ in ~~October,~~related ~~2014,~~activities ~~sales~~with ~~for~~other ~~the 4th~~broadcast ~~quarter~~parties ofin ~~2014~~order ~~showed~~to ~~significant~~further ~~improvement~~demonstrate ~~over~~ the ~~3rd~~ ~~quarter~~technical ~~of 2014~~ and ~~therefore~~marketing ~~management~~viability ~~believes~~of ~~revenues~~adding ~~for~~ the ~~year~~“feel” ~~ended~~of ~~December~~live ~~31,~~sporting ~~2014,~~events ~~could~~to ~~have~~sports ~~been~~fans ~~significantly~~while ~~larger~~watching ifin itthe ~~had~~comfort ~~sufficient~~of ~~inventory~~their toown ~~meet its sales demands~~home.

12Additionally, the Company experienced a shortage of available working capital required to fund certain inventory requirements related to its existing consumer products business which had a corresponding negative effect on revenues for the year.

~~Cost~~Management ofbelieves ~~goods~~that ~~sold~~the ~~decreased~~continued ~~$500,335~~development orand ~~45.2%,~~implementation toof ~~$605,934,~~this ~~for~~broadcast ~~the~~technology ~~year~~will ~~ended~~produce ~~December~~the ~~31,~~greatest ~~2014,~~amount ~~compared to cost~~ of ~~goods~~long-term ~~sold~~value ~~of $1,106,269~~ for ~~the~~our ~~year~~shareholders ~~ended~~and ~~December~~will ~~31,~~help ~~2013.~~to ~~The~~enable ~~45.2%~~it ~~decrease~~to insecure the ~~cost~~financing ofneeded ~~goods~~to ~~sold~~purchase ~~for~~adequate ~~the~~levels ~~year~~of ~~ended~~all ~~December~~inventory ~~31,~~items ~~2013~~in isfuture ~~the~~periods ~~same~~while ascontinuing the ~~45.2%~~implementation ~~decrease in revenue for the same time period~~ and ~~reflects~~commercializing ~~similar~~its ~~profit~~patented ~~margins~~haptic-tactile onbroadcast ~~the~~technology ~~products sold~~ for ~~both~~live ~~years~~sporting events.

~~Gross~~Revenue ~~profit~~increased ~~decreased by~~ $~~365~~526,~~946~~653 or 4550.1%, to $~~445~~1,~~085~~577,672 for the year ended December 31, ~~2014,~~2015 compared to ~~gross~~revenue ~~profit~~ of $~~811~~1,~~031~~051,019 for the year ended December 31, ~~2013~~2014. ~~Our~~The ~~gross~~Company ~~margin~~was ~~percentage~~able ~~remained~~to atobtain ~~approximately~~key ~~42%~~inventory ~~for~~items due to its relationship with LFT Manufacturing as explained in Note 11 of the ~~years~~financial ~~ended~~statements ~~December~~which 31allowed the Company to secure some amount of inventory during most of the year and consequently, the Company was able to show significant improvement in revenue 2015 compared to 2014. ~~and~~Management believes revenues for the year ended December 31, ~~2013~~2015, could have been larger if it had sufficient inventory to meet its sales demands throughout the entire year.

~~General~~Cost ~~and~~of ~~administrative~~goods ~~expenses~~sold ~~decreased~~increased $~~147~~242,~~673,~~508 or ~~8.6~~40%, to $1848,~~579~~442,~~507~~ for the year ended December 31, ~~2014~~2015, compared to ~~general~~cost ~~and~~of ~~administrative~~goods ~~expenses~~sold of $1605,~~727,180~~934 for the year ended December 31, ~~2013~~2014. ~~Significant~~This ~~variations~~increase ~~within~~is ~~the~~in ~~general~~line ~~and~~with ~~administrative~~the ~~expenses~~revenue ~~were~~increase asfor ~~follows:~~the year.

	December 31,2014			December 31,2013			Increase (Decrease)
Payroll and related expenses	$	722,805		$	624,517		$	98,288
Stock warrant expense		(109,926	)		(20,441	)		(89,485	)
Advertising and Marketing		153,065			239,521			(86,456	)
Professional fees		307,674			375,914			(68,240	)
Freight and related expenses		91,506			143,225			(51,719	)
Travel and entertainment		104,575			67,674			36,901
License and permits		45,938			26,597			19,341
Depreciation and patent amortization		46,334			31,623			14,711
All other general & admin. expenses		217,536			238,550			(21,014	)
	$	1,579,507		$	1,727,180		$	147,673

Gross profit increased by $284,145 or 63.8% to $729,230 for the year ended December 31, 2015, compared to gross profit of $445,085 for the year ended December 31, 2014. Our gross margin percentage of revenue was 46.2% and 42.3% for the years ended December 31, 2015 and December 31, 2014, respectively due to a favorable product mix.

~~Payroll~~13 ~~expense~~Table ~~increased by $98,288 in the year ended December 31, 2014 compared to the year ended December 31, 2013 due primarily to $50,112 in additional expense in 2014 for the cost~~ of ~~employee stock option plan and a $30,000 bonus being awarded by the Directors to the CEO of the Company.~~Contents

~~Stock~~General ~~warrant~~and ~~expense~~administrative expenses decreased by $8995,~~485 in the year ended December 31~~641, ~~2014~~or ~~compared to the year ended December 31~~6.1%, ~~2013 due~~ to adjusting the stock warrants liability based on the Black-Scholes valuation model which is used to estimate the fair value of the warrants. As shown in footnote 6 of the Notes to the Company’s Consolidated Financial statements, the Company has recorded a warrant liability of $491,~~404 and $159~~483,~~330~~866 asfor ofthe ~~December~~year ~~31,~~ended ~~2014 and~~ December 31, ~~2013~~2015, ~~respectively,~~compared ~~which is based on the Black-Scholes valuation model~~ to ~~estimate~~general ~~the~~and ~~fair~~administrative ~~value~~expenses of ~~the warrants. The significant assumptions considered by the model were the remaining term of the warrants, the fair value per share stock price of~~ $~~.07 and $.17~~1,579,507 ~~a risk free treasury rate~~ for .5the ~~years~~year ~~and~~ended ~~1.5 years of .12% and .26% at~~ December 31, 2014. ~~and~~Significant ~~December~~variations ~~31,~~within ~~2013,~~the ~~respectively~~general and anadministrative ~~expected~~expenses ~~volatility~~were ofas ~~60%.~~follows:

	December 31, 2015			December 31, 2014			Increase (Decrease)
Payroll and related expenses	$	760,296		$	722,805		$	37,491
Stock warrant expense		(43,217	)		(109,926	)		66,709
Advertising and Marketing		112,202			153,065			(40,863	)
Professional fees		235,857			307,674			(71,817	)
Freight and related expenses		95,419			91,506			3,913
Travel and entertainment		82,580			104,575			(21,995	)
License and permits		22,736			45,938			(23,202	)
Depreciation and patent amortization		36,175			46,334			(10,159	)
All other general & admin. expenses		181,818			217,536			(35,718	)
	$	1,483,866		$	1,579,507		$	(95,641	)

~~Advertising~~Payroll ~~and Marketing~~ expense ~~decreased~~increased by $8637,~~456~~491 in the year ended December 31, ~~2014~~2015 compared to the year ended December 31, ~~2013.~~2014 Indue ~~the~~to ~~third quarter of 2013,~~ the ~~Company,~~cost ~~as a part~~ of anemployee ~~agreement~~stock ~~with~~options ~~the~~issued ~~NHRA, was involved with the tactile enhancement of the NHRA’s telecasts on ESPN2. The Company developed a commercial for television and incurred other advertising costs~~ in ~~the~~December, ~~second half of 2013. After the first quarter of~~ 2014, ~~the~~expensed ~~company~~over ~~was~~3 noyear ~~longer~~vesting ~~involved~~schedule ~~with~~and the ~~NHRA.~~increase ~~Advertising and marketing expenditures increased again~~ in ~~the~~officers’ ~~fourth~~salaries ~~quarter~~awarded ofby ~~2014 as~~ the Company ~~began the tactile enhancement of CSNCA~~’s ~~broadcasts~~Board ~~of the San Jose Sharks telecasts of their home games from the SAP Center and developed a commercial for television and incurred other advertising costs. But the fourth quarter increase~~ in ~~Advertising~~December, ~~and~~2014 ~~marketing~~effective ~~expenditures was smaller than the amount spent~~ in ~~the second half of 2013 with the NHRA~~2015.

~~Professional~~Stock ~~fees~~warrant ~~decreased~~expense increased by $6866,~~240~~709 in the year ended December 31, ~~2014~~2015 compared to the year ended December 31, ~~2013,~~2014 ~~primarily~~ due to aadjustment ~~decrease~~of inthe ~~consulting~~stock ~~expenses~~warrants ~~related~~liability tobased ~~investor~~on ~~relations.~~the ~~This~~Black-Scholes ~~decrease~~valuation ~~was~~model ~~offset~~which ~~partially~~is byused ~~the increased legal fees related~~ to ~~increasing~~estimate the ~~number~~fair value of ~~countries~~the ~~where~~warrants ~~our~~in ~~products are patented~~2015.

~~Freight~~Advertising and ~~related~~Marketing ~~expenses~~expense decreased by $5140,~~719~~863 in the year ended December 31, ~~2014~~2015 compared to the year ended December 31, ~~2013,~~2014. ~~primarily~~The decrease is mainly due to the ~~receipt~~wind down of ~~fewer~~television ~~containers~~commercial costs associated with the Company’s use of ~~finished~~it ~~product~~haptic-tactile ~~from~~broadcast ~~our~~technology ~~overseas~~for ~~manufacturers~~Comcast ~~during~~Sports Net CA’s (“CSNCA”) telecasts of the ~~year~~San ~~ended~~Jose ~~December~~Sharks’ ~~31,~~home ~~2014~~games from the SAP Center in the first quarter of 2015.

~~Travel~~Professional ~~and~~fees ~~entertainment~~decreased ~~expense increased by~~ $3671,~~901~~817 in the year ended December 31, ~~2014~~2015 compared to the year ended December 31, ~~2013,~~2014. The decrease was primarily due to ~~the~~a ~~increase~~decrease in ~~travel~~stock ~~related~~based ~~to:~~consulting ~~tactile~~expense ~~enhanced~~related ~~live~~to ~~sports~~marketing ~~broadcast of~~ the ~~NHRA in the first quarter of 2014, the tactile enhancement of CSNCA~~Company’s ~~broadcasts~~broadcast of the San Jose Sharks telecasts of their home games from the SAP Center, and work throughout 2014 with the Society of Motion Pictures and Television Engineers (SMPTE) to develop standards for the coding and transport of haptic-tactile broadcaststechnology.

~~License~~Freight and ~~permits~~related ~~expense~~expenses increased by $193,~~341~~913 in the year ended December 31, ~~2014~~2015 compared to the year ended December 31, ~~2013~~2014, primarily due to ~~the~~increased ~~expenses~~sales ~~related to increasing the number of countries~~ where ~~our~~shipping ~~products~~costs are ~~patented~~paid ~~and~~by the ~~annual~~Company ~~licensing~~in ~~fees for a newly filed low frequency transducer patent~~2015.

~~Depreciation~~Travel and ~~amortization~~entertainment expense ~~increased~~decreased by $1421,~~711~~995 in the year ended December 31, ~~2014~~2015 compared to the year ended December 31, ~~2013,~~2014. ~~due~~The toprimary ~~the~~reason ~~increased~~for ~~depreciation associated with~~ the ~~purchases~~decrease ofin ~~$139,293~~personnel oftravel ~~property~~costs ~~and~~related ~~equipment~~to ~~purchased for~~ the ~~tactile~~use ~~enhanced live sports broadcast~~ of the ~~NHRA~~Company’s ~~that~~broadcast ~~began~~technology in the ~~3rd~~first quarter of ~~2013.~~2015 ~~Much~~with ~~of this equipment was not needed for~~ the ~~tactile~~CSNCA ~~enhance~~/ ~~broadcast~~San ofJose ~~the~~Sharks ~~NHL’s~~broadcasts ~~hockey~~which ~~games~~did ~~and~~not ~~consequently,~~continue ~~has~~for ~~been sold by~~ the ~~Company~~balance ~~in second and third quarters~~ of ~~2014~~2015.

~~Research~~14 ~~and~~Table ~~development expenses decreased $174,435 to $22,570 for the year ended December 31, 2014, compared to $197,006 for the year ended December 31, 2013. In the third quarter~~ of 2013, research and development expense was incurred in field testing and national proof of concepts for our patented “ButtKicker Live!®/ “4D Sports powered by ButtKicker” haptic-tactile broadcast technology for the NHRA telecasts of ESPN2. These expenses were partially offset by research and development spent early in the 4th quarter of 2014 on the tactile enhancement of CSNCA’s broadcasts of the San Jose Sharks telecasts of their home games from the SAP Center.Contents

~~Loss~~License ~~from~~and ~~operations~~permits ~~increased~~expense decreased by $4323,~~837~~202 orin ~~3.9% for~~ the year ended December 31, ~~2014~~2015 ~~to $1,156,992 as~~ compared to ~~$1,113,155 for~~ the year ended December 31, ~~2013.~~2014 ~~The additional operating loss was~~ primarily ~~caused~~due byto ~~the~~more ~~decrease~~patents inrenewing, ~~revenue~~2014 and ~~gross profit partially offset by~~ the ~~decreases~~Company intaking ~~general~~advantage ~~and~~of ~~administrative~~an ~~expense~~early ~~and~~payment ~~research~~discount ~~and~~on ~~development~~the ~~expense~~annual aspatent ~~explained above~~renewals.

14Depreciation and amortization expense decreased by $10,159 in the year ended December 31, 2015 compared to the year ended December 31, 2014, primarily due to the additional depreciation in the first six months of 2014, associated with equipment purchased for use with NHRA broadcasts which was disposed in 2014.

~~Interest~~Impairment ~~expense~~of ~~increased~~investment in Joint Venture in the amount of $2793,~~353~~500 orrepresents ~~14.1%,~~an adjustment to ~~$221,129~~the ~~for~~valuation of the ~~year~~Company’s ~~ended~~investment in the Joint Venture. Based on events and circumstances that have occurred subsequent to December 31, ~~2014,~~2015 ~~compared~~but prior to ~~interest~~issuance ~~expense~~ of ~~$193~~these consolidated financial statements,~~776~~ ~~for~~management conducted an analysis of fair value of the ~~year~~investment ~~ended~~in ~~December~~the ~~31,~~Joint ~~2013~~Venture. ~~The~~Based ~~increase~~on ~~was~~this ~~due~~analysis, ~~primarily~~management todetermined the ~~borrowing~~fair value of anthe ~~additional~~investment ~~$100,000,~~to asbe ~~illustrated~~less than the ~~Notes~~carrying tovalue ~~the~~recorded ~~Financial~~at ~~Statements~~December ~~and~~31, ~~the~~2015. ~~increased~~Therefore, ~~financing~~management ~~fees~~has ~~associated~~recorded ~~with~~an ~~delayed~~impairment ~~payments~~of toinvestment ~~vendors~~in ~~resulting~~Joint ~~from~~Venture ~~cash~~of ~~shortages~~$93,500 for the year ended December 31, 2015.

~~Our~~Research ~~net~~and ~~loss~~Development ~~increased~~expense ~~$71,238~~decreased ~~for~~by ~~the year ended December 31, 2014. We had net loss of~~ $115,~~378,101~~188 (or ~~basic and diluted net loss per share of $0~~67.~~02)~~3% ~~compared~~ to ~~net loss of~~ $17,~~306,863~~382 ~~(or~~in ~~basic and diluted net loss per share of $0.02) for~~ the year ended December 31,2015 ~~2013.~~as ~~The~~compared ~~increase~~to $22,750 in ~~loss~~2014. ~~was~~This ~~caused by the~~ decrease inis ~~gross~~a ~~profit~~result ~~and~~of the ~~increase~~wind indown ~~interest~~of ~~expense,~~development ~~partially~~efforts ~~offset~~associated bywith the ~~decrease~~NHRA ~~in general~~ and ~~administrative~~San ~~expense~~Jose ~~and~~Sharks ~~research~~broadcasts ~~and~~beginning ~~development~~in ~~expense,~~the ~~all~~2nd ~~explained~~Quarter ~~above~~of 2015.

~~The~~Loss ~~following~~from ~~table~~operations ~~sets~~decreased ~~forth~~$394,474 ~~EBITDA~~or ~~and~~34.1% ~~adjusted EBITDA~~ for the ~~Company,~~year ~~which~~ended isDecember ~~a non-GAAP measurement. EBITDA is defined as earnings (loss) before net interest expense~~31, ~~income~~2015 ~~taxes,~~to ~~depreciation and amortization. Adjusted EBITDA is defined as earnings before net interest expense~~$762,108 ~~income taxes, depreciation, amortization, and non-cash expenses such~~ as ~~stock~~compared ~~warrant expense and stock based compensation~~ to ~~consultants and employees. Although EBITDA and Adjusted EBITDA are not measures of performance calculated in accordance with generally accepted accounting principles (“GAAP”)~~$1,156,992 ~~management believes that these non-GAAP measures will allow~~ for ~~a better evaluation of~~ the ~~operating~~year ~~performance~~ended ofDecember ~~the~~31, ~~business~~2014. ~~and~~The ~~facilitate~~decrease ~~meaningful~~was ~~comparison~~caused ofby the ~~results~~increase in ~~the~~gross ~~current~~profit ~~period~~and tothe ~~those~~decrease in ~~prior~~research ~~periods~~ and ~~future~~development ~~periods.~~expense ~~However~~and, ~~investors~~to ~~should not consider these measures in isolation or as~~ a ~~substitute~~minor ~~for net income (loss)~~degree, ~~operating~~offset ~~income~~by ~~(loss),~~an orincrease ~~any other measure for determining the Company’s operating performance that is calculated~~ in ~~accordance~~payroll ~~with GAAP. A reconciliation of EBITDA~~ and ~~Adjusted~~related ~~EBITDA~~expense ~~to the most comparable GAAP financial measure, net loss, follows:~~

	December 31,2014			December 31,2013
Net Loss	$	(1,378,101	)	$	(1,306,863	)
Adjustments
Interest expense		221,129			193,776
Depreciation and patent amortization		46,334			31,623
Taxes		-			-
EBITDA		(1,110,638	)		(1,081,464	)
Less non-cash expenses from:
Stock warrant expense		(109,926	)		(20,441	)
Payment of stock and warrants to consultants		90,362			184,771
Employee stock options expense		203,567			153,455
Adjusted EBITDA	$	(926,635	)	$	(763,679	)

Interest expense increased $49,184 or 22.2%, to $270,313 for the year ended December 31, 2015, compared to interest expense of $221,129 for the year ended December 31, 2014. The increase was due primarily to a retroactive and ongoing interest rate change from 12% to 25% per a provision in the loan agreement.

~~EBITDA~~Our ~~decreased~~net ~~$29,174~~loss ordecreased ~~2.7% to~~ $(1275,~~110,638)~~474 for the year ended December 31, ~~2014~~2015. We had net loss of $1,102,627 (or basic and diluted net loss per share of $0.01) compared to (net loss of $1,~~081~~378,~~464~~101 (or basic and diluted net loss per share of $0.02) for the year ended December 31, ~~2013~~2014. The decrease ~~was mainly due to the increase~~ in ~~net~~ loss ~~from~~was ~~operations,~~caused anby the increase in ~~interest~~gross ~~expense,~~profit ~~partially~~ offset by aincrease ~~decrease~~ in ~~research~~interest ~~and development~~ expense.

~~Adjusted~~The following table sets forth EBITDA, ~~decreased~~and ~~$162~~adjusted EBITDA for the Company,~~956~~ orwhich 21is a non-GAAP measurement.3% toEBITDA $is defined as earnings (~~926,635~~loss) ~~for~~before ~~year~~net ~~ended~~interest ~~December~~expense, 31income taxes, ~~2014~~depreciation and amortization. Adjusted EBITDA is defined as earnings before net interest expense, ~~compared~~income taxes, depreciation, amortization, and non-cash expenses such as stock warrant expense and stock based compensation to consultants and employees. Although EBITDA and Adjusted EBITDA, are not measures of $performance calculated in accordance with generally accepted accounting principles (~~763,679~~“GAAP”), management believes that these non-GAAP measures will allow for a better evaluation of the ~~year~~operating ~~ended~~performance ~~December~~of ~~31,~~the ~~2013.~~business ~~Adjusted~~and ~~EBITDA~~facilitate ~~decreased~~meaningful ~~from~~comparison of the ~~prior~~results ~~year~~in ~~primarily~~the ~~due~~current period to ~~lower~~those ~~revenue~~in prior periods and ~~gross~~future ~~profit~~periods. However, ~~partially~~investors ~~offset~~should bynot ~~reduced~~consider ~~research~~these ~~and~~measures ~~development~~in ~~expense~~isolation ~~and~~or ~~administrative~~as ~~expenses~~a insubstitute ~~the~~for ~~year~~net ~~ended~~income ~~December 31~~(loss), ~~2014~~operating income (loss), ~~compared~~or any other measure for determining the Company’s operating performance that is calculated in accordance with GAAP. A reconciliation of EBITDA and Adjusted EBITDA to the ~~year~~most ~~ended~~comparable ~~December~~GAAP 31financial measure, ~~2013.~~net loss, follows:

15 Table of Contents

Liquidity and Capital Resources

	December 31,			December 31,
	2015			2014
Net Loss	$	(1,102,627	)	$	(1,378,101	)
Adjustments
Interest expense		270,313			221,129
Depreciation and patent amortization		36,175			46,334
Taxes		-			-
EBITDA		(796,139	)		(1,110,638	)
Less non-cash expenses from:
Stock warrant expense		(43,217	)		(109,926	)
Payment of stock and warrants to consultants		8,500			90,362
Employee stock options expense		195,923			203,567
Adjusted EBITDA	$	(634,933	)	$	(926,635	)

~~Total~~EBITDA ~~current~~increased ~~assets~~$314,499 ~~were~~or 28.3% to $~~402~~(796,~~678~~139) atfor the year ended December 31, ~~2014~~2015, ~~consisting~~compared ofto ~~cash of~~ $16(1,~~185~~110,638) ~~net~~for ~~accounts~~the ~~receivable~~year ofended ~~$25~~December 31,~~139,~~ ~~inventory~~2014. ofThe ~~$361,223~~increase ~~and~~was ~~prepaid~~mainly due to the decrease in net loss from operations and ~~other~~an ~~current~~increase ~~assets~~in ofinterest ~~$131~~expense.

~~Total~~Adjusted ~~current~~EBITDA, ~~liabilities~~increased ~~were~~$291,702 or 31.5% to $2(634,~~697~~933) for year ended December 31,~~452~~ as2015, compared to Adjusted EBITDA, of $(926,635) for the year ended December 31, 2014,. ~~consisting~~Adjusted ofEBITDA ~~accounts~~increased ~~payable~~from ~~and~~the ~~accrued~~prior ~~expenses~~year ofprimarily $1due to increase warrant expense,~~220,871,~~ ~~current~~reduction ~~maturities~~of payment of ~~long-term~~warrants ~~debt~~to ofconsultants $1in the year ended December 31,~~400,159~~ ~~and~~2015 ~~other~~compared ~~current~~to ~~liabilities~~the ofyear ~~$76~~ended December 31,~~422~~ 2014.

AsLiquidity ofand ~~December~~Capital ~~31, 2014, our working capital deficit increased $785,101 or 52% to $(2,294,774) compared to our working capital deficit of $(1,509,673) for the year ended December 31, 2013.~~Resources

~~Cash~~Total ~~Flows~~current ~~during~~assets ~~the~~were $253,447 at year ended December 31, ~~2014~~2015, consisting of cash of $12,305, net accounts receivable of $103,123, inventory of $137,888 and prepaid and other current assets of $131.

~~During~~Total ~~the~~current ~~year~~liabilities ~~ended~~were ~~December 31~~$3, ~~2014~~158,989 weas ~~had a net decrease in cash and cash equivalents~~ of ~~$124~~December 31,~~046~~ 2015 consisting of ~~net~~accounts ~~cash~~payable ~~used~~and inaccrued ~~operating~~expenses ~~activities~~ of $~~576~~1,~~172~~446,646, ~~net~~current ~~cash~~maturities ~~provided~~of bylong-term ~~investing~~debt ~~activities~~of $61,~~776~~675,921 and ~~net~~other ~~cash~~current ~~provided~~liabilities ~~by financing activities~~ of $~~445~~62,~~350~~833.

~~Net~~As ~~cash~~of ~~used by operating activities was $576,172 for the year ended~~ December 31, ~~2014~~2015, ~~consisting~~our ofworking ancapital ~~increase~~deficit ~~in:~~increased ~~accounts payable and accrued expenses of~~ $~~440~~610,~~248~~768 ~~and~~or ~~decreases in accounts receivable and provision for credit losses of $37,366, net inventory of $82,538, prepaid expenses of $6,010, and deferred revenue of $31,924~~26.7% ~~These~~to ~~changes were reduced by net loss of~~ $1(2,~~378~~905,~~101~~542) ~~which~~compared ~~had~~to ~~adjustments~~our ~~for~~working ~~depreciation~~capital ~~and~~deficit ~~amortization~~ of $73(2,~~067~~294,774) ~~amortization of debt discount of $8,974, employee stock options of $203,567 stock and warrants issued~~ for ~~services of $90,362, loss on~~ the ~~sale~~year ofended ~~assets~~December ~~of $1~~31,~~647~~ ~~and change in fair value of warrant liability of $(109,926)~~2014.

~~Net~~Cash ~~cash~~Flows ~~provided~~during ~~by investing activities was $6,776 for~~ the year ended December 31, ~~2014, consisting of the purchase of intangible assets of $16,552, proceeds on the sale of property of $38,249 and the purchase of property and equipment of $14,921.~~2015

~~Net~~During ~~cash provided by financing activities was $445,350 for~~ the year ended December 31, ~~2014~~2015, ~~primarily~~we ~~consisting~~had ofa ~~proceeds~~net ~~from~~decrease ~~options~~in cash and ~~warrants~~cash ~~exercised~~equivalents of $~~411~~3,~~088,~~880 ~~proceeds~~consisting ~~from~~of ~~debt~~net cash used in operating activities of $~~100~~425,~~000~~805 and $3,890 ~~partially~~used in investing activities, offset by ~~the~~net ~~payment~~cash ofprovided ~~debt~~by financing activities of $65425,~~738~~815.

~~The~~Net ~~Company~~cash ~~also~~used ~~expects~~in tooperating ~~need~~activities ~~approximately~~was $2425,~~000,000~~805 offor ~~cash~~the toyear ~~purchase~~ended ~~inventory:~~December ~~$900~~31,~~000~~ ~~within the next six months and $1~~2015,~~100,000~~ ~~more~~due ~~within~~primarily ~~the succeeding 6 months. The Company expects~~ to ~~generate~~the ~~these~~decrease ~~funds~~in ~~from~~the ~~operations~~net ~~with~~operating ~~any~~loss ~~deficit~~and toincreases bein ~~funded~~accounts ~~through~~payable ~~capital~~and ~~raises.~~accrued Weexpenses ~~estimate~~offset ~~that~~by ~~for~~decrease ~~the~~in ~~next~~net ~~12 months we will also need $482,000 for debt service~~inventory.

16Net cash provided by financing activities was $425,815 for the year ended December 31, 2015, primarily consisting of proceeds from the private offering of preferred stock offset by payments on outstanding debt.

The Company historically has incurred net losses, negative cash flows from operating activities, and has an accumulated deficit of approximately $10,585,000 at December 31, 2014. In addition, at December 31, 2014 the Company had a cash balance of $16~~,185~~ ~~and~~Table ~~working capital deficiency~~ of approximately $2,295,000. Although the working capital deficiency has improved by approximately $1,032,000 since December 31, 2011, in both the near and long term, without additional financing, the Company is and will be in an illiquid position. The Company received cash through the sales of Common Stock and warrants to purchase Common Stock in the amount of $150,000 in the third quarter of 2011, $250,000 in the fourth quarter of 2011, $375,000 in the first quarter of 2012, $770,000 in the second quarter of 2012, $540,000 in the third quarter of 2012, $250,000 in the first quarter of 2013, $675,000 in the second quarter of 2013, $175,000 in the third quarter of 2013, $150,000 in the fourth quarter of 2013, $237,125 in the third quarter of 2014, and an additional $172,400 in the fourth quarter of 2014. The Company believes that the receipt of additional equity will enable it to purchase adequate inventory to meet its existing sales demand and to be able to increase sales through advertising and marketing related activities. There is no assurance that the Company will have any additional sales of stock or that the Company will be able to become operationally cash flow positive.Contents

IfThe ~~the~~ Company ishistorically ~~successful~~has inincurred ~~raising~~net ~~significant~~losses, ~~additional~~negative ~~capital~~cash (flows from operating activities, and has an accumulated deficit of ~~which~~approximately ~~there~~$11,687,523 isat noDecember ~~assurance)~~31, 2015. In addition at December 31, 2015 the Company ~~intends~~had toa ~~increase~~cash ~~its~~balance ~~budgets~~of ~~for~~$12,305 ~~advertising~~ and ~~marketing,~~working ~~targeting~~capital ~~consumers~~deficiency ~~who~~of ~~have~~approximately ~~shown~~$2,905,542. anWithout ~~interest~~additional infinancing, the Company’s oris ~~similar~~and ~~products~~will be in an illiquid position. ~~Additionally,~~The Company received cash through the ~~Company~~sales ~~intends~~of Common Stock and warrants to ~~increase~~purchase ~~its~~Common ~~advertising~~Stock ~~and~~in ~~marketing~~the ~~expenses~~amount byof ~~advertising~~$237,125 ~~directly~~in tothe ~~customers~~third ~~who~~quarter ~~experience~~of ~~its~~2014 ~~products~~and $172,400 in ~~ButtKicker~~the ~~equipped~~fourth ~~cinemas~~quarter of 2014. During 2015, $500,000 was received from the sale of preferred stock. The Company ~~also~~believes ~~intends~~that the receipt of additional equity will enable it to ~~hire~~purchase ~~one~~adequate orinventory ~~more~~to meet its existing sales ~~people~~demand and to ~~sell~~be able to increase sales through advertising and marketing related activities. There is no assurance that the Company’s ~~products~~will tohave ~~key~~any ~~markets~~additional ~~including~~sales of stock or that the ~~home~~Company ~~theater,~~will ~~commercial~~be ~~cinema~~able ~~and~~to ~~international~~become ~~markets~~operationally cash flow positive.

WeIf ~~believe~~ the ~~combination of the~~ Company’s ~~recent~~is ~~success~~successful in ~~tactically~~raising ~~enhancing~~significant additional capital, the ~~San~~Company ~~Jose~~intends ~~Sharks~~to ~~telecasts~~increase onits ~~Comcast,~~budgets ~~increased~~for advertising and marketing, ~~spending~~targeting ~~and~~consumers who have shown an interest in the ~~addition~~Company’s ofor similar products. The Company also intends to hire one or more sales people ~~will~~to ~~drive~~sell ~~demand~~the ~~for~~Company’s ~~our~~ products ~~and~~to ~~will~~key ~~increase~~markets ~~revenue~~including cinema, home theater and ~~cash~~video ~~flow~~gaming and international markets.

At this time, we have not secured additional financing. We do not have any commitments for additional capital from third parties or from our officers or directors or any of our shareholders to supplement our operations or provide us with financing in the future. There can be no assurance that additional capital will be available to us, or that, if available, it will be on terms satisfactory to us. If we are unable to increase revenues from operations, to raise additional capital from conventional sources and/or additional sales of stock in the future, we may be forced to curtail or cease our operations. These factors raise substantial doubt in our ability to continue as a going concern. Our financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty. There is substantial doubt that we can continue as a going concern for the next 12 months unless additional funding is secured by the Company.

For a discussion of critical accounting policies and estimates, please see Note 1 to our consolidated financial statements, which are included in this report.

For a discussion of recently issued accounting pronouncements, please see Note 1 to our consolidated financial statements, which are included in this report.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Foreign Currency Exchange

Our customers are located in the US and around the world. However, ~~but~~ all payments received are ~~made~~ in U.S. currency dollars towith ~~us.~~the ~~Our~~exception ~~suppliers~~of ~~are~~one ~~located~~customer in ~~the~~China USwhose ~~and~~price inmay ~~China~~be ~~and~~adjusted weby ~~pay~~the ~~all~~Company ofto compensate for currency fluctuations. Payments to our ~~vendors~~China-based suppliers are also in U.S. ~~dollars~~currency. WeAccordingly, we have nolimited foreign currency exchange exposure.

Item 8. Financial Statements and Supplementary Data.

Information required by this Item appears in the Consolidated Financial Statements and Report of Independent Registered Public Accounting Firm contained in Item 15(a) (1 and 2).

17 Table of Contents

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

The Company has no disagreements with its accountants.

Item 9A. Controls and Procedures.

Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Securities Exchange Act of 1934 (the "Exchange Act") is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms and is accumulated and communicated to the Company's management, as appropriate, in order to allow timely decisions in connection with required disclosure.

Evaluation of Disclosure Controls and Procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 ("Exchange Act"), the Company carried out an evaluation, with the participation of the Company’s management, including Mark Luden, the Company's Chief Executive Officer ("CEO") and Richard Conn, the Company's Chief Financial Officer ("CFO") (the Company’s principal financial and accounting officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures were not effective as of December 31, ~~2014~~2015 to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure, due to the material weaknesses described below.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act, is a process designed by, or under the supervision of, the chief executive officer and chief financial officer, or persons performing similar functions, and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

18 Table of Contents

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. The Company believes its weaknesses in internal controls and procedures is due in part to the Company's lack of sufficient personnel with expertise in the area of compliance with the financial reporting guidelines as established by the Securities and Exchange Commission, generally accepted accounting principles (GAAP) and tax accounting procedures. In addition, the Company lacks the personnel structure, size and complexity to segregate duties sufficiently for proper controls.

Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Our management, under the supervision and with the participation of chief executive officer and chief financial officer, conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control— Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 1992 (COSO). Based on its evaluation our management concluded that our internal control over financial reporting was not effective as of December 31, ~~2014~~2015.

Remediation of Material Weakness in Internal Control over Financial Reporting

The Company is currently seeking additional personnel with expertise in these areas necessary to segregate duties for proper controls; however, until such time as additional personnel is hired, the Company believes that it will continue to recognize a weakness in its internal controls and procedures. The Company’s plan is to hire additional personnel to properly implement a control structure when the appropriate funds become available. In the meantime, the Chief Executive Officer and Chief Financial Officer will continue to perform or supervise the performance of additional accounting, ~~and~~ financial analyses and other post-closing procedures including detailed validation work with regard to balance sheet account balances, additional analysis on income statement amounts and managerial review of all significant account balances and disclosures, to ensure that the Company's Annual report and the financial statements forming part thereof are in accordance with accounting principles generally accepted in the United States of America.

Changes in Internal Controls

During the year ended December 31, ~~2014~~2015, there were no significant changes in internal controls of the Company or other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Item 9B. Other Information.

None.

19 Table of Contents

~~Part~~PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Our executive officers and directors and their ages and positions are as follows:

Name	Age	Position
Mark A. Luden	5556	President, CEO, Secretary and Director
Richard E. Conn	59	Chief Financial Officer and Treasurer
Richard E. Conn*	60	Chief Financial Officer and Treasurer
Marvin Clamme	6162	Vice President of Engineering
Kenneth McCaw	6364	Director
Walter J. Doyle	7980	Director

Mark A. Luden has served as our President, CEO, Secretary, Treasurer and a member of our board of directors since March 1999. Mr. Luden is a seasoned sales, marketing and management executive with over fourteen (14) years of sales, marketing and management experience in the enterprise financial software industry. From March 1998 to February 1999, Mr. Luden served as Director of Sales and Marketing for Invata International, a privately funded, startup enterprise real estate software company. At Invata, he was responsible for developing all sales and marketing programs. From February 1997 to March 1998, Mr. Luden served as National Accounts Manager for Computer Associates in Columbus, Ohio, where he was responsible for selling enterprise-wide systems, databases and applications software to Fortune 100 companies. From August 1987 to February 1997, he worked for CCH in various capacities including Sales Manager in the Ohio Division, Branch Manager in Dallas, Texas, Sales Director and Account Representative in Columbus, Ohio, and Sales Representative in Bangor, Maine. While with CCH, Mr. Luden was part of a four person executive team managing the $80 million ProSystem fx tax software business unit.

In addition to leading the strategic and day-by-day operations of the Company, Mr. Luden is a member of the Consumer Electronics Association (CEA) Board of Industry Leaders and has served as Chairman of the Small Business Council, ~~the~~ Chairman of Division Executive Board, and was a member of the Executive Board of the CEA for 2010 and 2011. Mr. Luden is also a member of the Standards Committee of the Society of Motion Picture and Television Engineers (SMPTE). Mark is the author of one issued patent, "Capture and remote reproduction of haptic events in synchronous association with the video and audio capture and reproduction of those events." and one pending patent, “HAPTIC-TACTILE, MOTION OR MOVEMENT SIGNAL CONVERSION SYSTEM AND ASSEMBLY”. Mr. Luden’s past sales and managerial experience and serving as our President, CEO, Secretary, and a member of our board of directors since 1999, being a substantial shareholder of the Company and his affiliation with the CEA, led the Board of Directors to the conclusion that he is qualified to serve as a director of the Company.

Richard E. Conn has served as our Controller since April 2006 and CFO and Treasurer since May 18, 2011. From April 1982 to March 2006 he served as Vice President of Finance for CoreSource, Inc. whose principal business is Health insurance. Mr. Conn is a Certified Public Accountant in good standing and a member of the Ohio Society of Certified Public Accountants.

Table of Contents

*Lawrence L. Lemoine assumed the offices of both Chief Operating Officer and Chief Financial Officer of the Company on February 5, 2016. Richard E. Conn, the previous Chief Financial Officer of The Guitammer Company has retired from his offices with the Company effective on the same date.

Before joining the Company, Mr. Lemoine, age 64, was CEO of Wave Entertainment Network where he created and successfully launched a new entertainment platform of a “first of its kind” IPTV worldwide entertainment platform for the maritime and hospitality industries. Prior to Wave, he was VP Finance of DIRECTV, involved in DIRECTV’s growth from the early stages to a subscriber base of over 12 million. In addition, Mr. Lemoine held the Controller post for the 1984 Olympic Organizing Committee, the most profitable Olympic Games in history and also served as an executive consultant to various start-ups that include a Paris-based satellite service organization, Daytona Prototype motor racing team (U.S.) and a sports video production organization. Mr. Lemoine and the Company entered into an agreement were he will receive 200,000 shares of common stock per month for three months and will receive $10,000 per month during this time period once the receipt by the Company of $6,000,000 of financing.

Marvin Clamme has served as a member of our board of directors and one of our employees since March 1999. Mr. Clamme resigned from the board of directors effective April 5, 2010 and was replaced by Mr. Doyle. Mr. Clamme is a professional studio engineer. Mr. Clamme is also the inventor of the ButtKicker low frequency audio transducer, and has since assigned all of his rights and interest in ButtKicker and the ButtKicker patent to the Company.

Kenneth McCaw, our founder, has served as a member of our board of directors since March 1990. Mr. McCaw is an accomplished producer, writer and inventor. He is a graduate of the University of California at Los Angles Film Scoring program. Mr. McCaw has written approximately 200 original music pieces and has produced over 25 albums. Mr. McCaw has written and produced music for The White House, Walt Disney Productions, The United States Olympic Committee, Opryland Productions, as well as numerous theaters and playhouses throughout the United States. Mr. McCaw is the inventor of the Hammer Jammer™, a patented, consumer key hammering mechanism for acoustic and electric guitars. Mr. McCaw founded the Company, been on the Board since its inception, invented the Hammer Jammer™ and is a substantial shareholder of the Company, all of which led the Board of Directors to the conclusion that he is qualified to serve as a director of the Company.

Walter J. Doyle was elected a director on April 5, 2010 at the Company’s Annual Meeting of Shareholders. Since January 1995, Mr. Doyle has served as the President of Forest Capital, an angel capital firm, located in Powell, Ohio. Previously, Mr. Doyle was founder, President and CEO of Industrial Data Technologies Corp. (IDT) for ~~21 years~~21years. IDT designed, developed, manufactured and marketed high-tech products for factory automation projects in the steel, automotive, food and chemical industries. Earlier, he worked for Industrial Nucleonics/Accuray Corporation (NYC and Columbus, Ohio). Even earlier, he was a US Army Paratrooper.

Mr. Doyle earned an Electrical Engineering degree from The City College of New York (CCNY) and an MBA from the Harvard Business School. He is a member and/or on the board of a number of businesses and local civic organizations. As discussed below under Certain Relationships and Related Transactions and Director Independence, Forest Capital, a company controlled by Mr. Doyle, made the Working Capital Loan to the Company. As provided for in the loan documents, the Company agreed to provide Forest Capital the right to appoint one member of the board of directors of the Company, which member is Mr. Doyle. (See Working Capital Loan and Consulting Agreement, Exhibit 10.15, incorporated herein by reference.) Mr. Doyle’s said past executive experience being a substantial shareholder of the Company and being nominated to the Board by Forest Capital as aforesaid, led the Board of Directors to the conclusion that he is qualified to serve as a director of the Company.

Table of Contents

There are no family relationships among our directors and executive officers. The Company does not have an audit, nominating or compensation committee. In the opinion of the Board of Directors, no Director may be deemed independent.

We are not aware of the occurrence during the last ten years of any events that are material to an evaluation of the ability or integrity of any of our directors or executive officers such as the following:

	·	Any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

	·	Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

	·	Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting the involvement of such person in any type of business, securities or banking activities; and

	·	Being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

Other Directorships

Other than as indicated above, none of the Company's directors hold or have been nominated to hold a directorship in any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 or subject to the requirements of Section 15(d) of the Securities Act of 1933 or any company registered as an investment company under the Investment Company Act of 1940.

Item 11. Executive Compensation.

Compensation Discussion and Analysis

General

We have provided what we believe is a competitive compensation package to our executive management team through a combination of base salary, equity participation and an employee benefits program.

This Compensation Discussion and Analysis explains our compensation philosophy, policies and practices since we became a public reporting company.

Our objective is to attract and retain executives with the ability and the experience necessary to lead us and deliver strong performance and value to our shareholders,. weWe strive to provide a total compensation package that is competitive with ~~total~~ compensation ~~generally~~commensurate ~~provided~~with to executives in ~~our~~companies ~~industry~~within ~~and~~our ~~general~~ industry ~~companies~~ of similar size in terms of revenue and ~~market~~ capitalization. ~~Those are the organizations against whom we generally compete for executive talent.~~

Table of Contents

The compensation package for our executive officers may include both cash and equity incentive plans that align an executive's compensation with our short-term and long-term performance goals and objectives.

Offer competitive benefits package to all full-time employees.

We provide a benefits package to all full-time employees including health and welfare benefits such as medical insurance. We have no structured executive perquisite benefits (e.g., club memberships or sports tickets) for any executive officer, including the ~~named~~Named ~~executive~~Executive ~~officers~~Officers, and we currently do not provide any deferred compensation programs or supplemental pensions to any executive officer, including the ~~named~~Named ~~executive~~Executive ~~officers~~Officers.

Provide fair and equitable compensation.

We provide a total compensation program that we believe will be perceived by both our executive officers and our shareholders as fair and equitable. In addition to market pay levels and ~~considering~~the consideration individual circumstances related to each executive officer, we also consider the pay of each executive officer relative to each other executive officer and ~~relative~~ to other members of the management team. We have designed the total compensation programs to be consistent ~~for~~within our executive management team.

Our Executive Compensation Process

Our ~~board~~executive ofofficers ~~directors~~are ~~acts~~elected asby ~~our~~the ~~compensation~~Board ~~committee~~of Directors. ~~Our~~The ~~executive~~Board ~~officers~~also ~~are~~acts ~~elected~~as by our ~~board~~Compensation ~~of directors~~Committee. The following discussions are generally ~~the~~based ~~Company's~~on ~~and~~ the ~~board~~Board of ~~directors~~Directors' historical ~~practices. Based on their~~ understanding of executive compensation for comparable positions at ~~similarly~~similar ~~situated~~ companies, experience in making these types of decisions and judgment. ~~regarding~~Compensation ~~the~~is ~~appropriate~~proposed ~~amounts~~by ~~and types of executive compensation to pay and in part on recommendations where appropriate, from~~ our ~~chief~~Chief ~~executive~~Executive ~~officer,~~Officer ~~along~~followed ~~with~~by ~~other~~approval ~~considerations~~by ~~discussed below,~~ the ~~board~~Board of ~~directors approve the annual compensation package of our executive officers with respect to the appropriate base salary, and the grants of long-term equity incentive awards~~Directors.

We have two executive officers. ~~The~~whose annual performance review ~~of our executive officers~~ is considered by the ~~board~~Board of ~~directors~~Directors when making decisions on setting base salary and grants of long-term equity incentive awards.

The ~~board~~Board of ~~directors~~Directors review the annual performance of ~~any~~personnel ~~parties~~reporting ~~related~~ to the CEO and consider the recommendations of the related person's direct supervisor with respect to base salary ~~and~~along with grants of long-term equity incentive awards. The ~~board~~Board of ~~directors~~Directors review and may approve these recommendations with modifications as deemed appropriate.

Table of Contents

Our Executive Compensation Programs

Overall, our executive compensation programs are designed to be consistent with the objectives and principles set forth above. The basic elements of our executive compensation programs are summarized in the table below, followed by a more detailed discussion of each compensation program.

Element Characteristics Purpose Base salary Fixed annual cash compensation; for all executives are periodically eligible for ~~periodic~~ increases in ~~base~~ salary based on performance ~~and~~comparable market ~~pay~~compensation ~~levels.~~ Keep our annual compensation competitive with the market for skills and experience necessary toand meet the requirements of the executive's role with us. Long-term equity incentive plan awards (stock options) Performance-based equity award which has value to the extent our common stock price increases over time; targeted at the market pay level and/or competitive practices at similar companies. Align interest of management with shareholders; motivate and reward management to increase the shareholder value of the company over the long term. Health & welfare benefits ~~Fixed~~Provides ~~component. The same/compar-able~~ health &and welfare benefits (including medical and disability insurance~~) are available for all full-time employees~~. ~~Provides~~To ~~benefits~~ensure tothat ~~meet~~ the health and & welfare meet the needs of our employees and their families.

Allocation between Long-Term and Currently Paid Out Compensation

The compensation we currently pay consists of a base ~~pay~~salary. The long-term compensation ~~consists~~includes ~~entirely of~~ awards of stock options pursuant to our stock option plans. The allocation between long-term and ~~currently~~current ~~paid out~~ compensation is based on our objectives and how comparable companies use long-term and ~~currently~~base salaries paid ~~compensation~~ to ~~pay~~ their executive officers.

Allocation between Cash and Non-Cash Compensation

It is our policy to allocate all currently paid compensation in the form of cash and all long-term compensation in the form of awards of options to purchase our common stock. We consider competitive markets when determining the allocation between cash and non-cash compensation.

Other Material Policies and Information

All pay elements are cash-based except for the long-term equity incentive program, which is an equity-based (stock options) award. We consider market pay practices and practices of comparable companies in determining the amounts to be paid, ~~what~~in ~~components~~the ~~should~~combination beof ~~paid in~~ cash ~~versus~~and equity, and ~~how~~the ~~much~~percentage of ~~a named executive officer's~~ compensation ~~should~~in be short-term versus long-term compensation opportunities for our executive officers,. ~~including~~Our ~~our~~compensation ~~named~~packages ~~executive officers,~~ are designed to be competitive with comparable companies. Weand believe that a substantial portion of ~~each named executive officer's~~ compensation should be in performance-based pay.

In determining whether to increase or decrease annual compensation to our executive officers, including our ~~named~~Named ~~executive~~Executive ~~officers~~Officers, ~~annually~~ we take into account the changes (if any) in ~~the~~ market pay levels, the contributions made ~~by the executive officer~~, ~~the~~ performance ~~of the executive officer~~, ~~the~~ increases or decreases in responsibilities and roles ~~of the executive officer~~, ~~the~~ business needs ~~for the executive officer~~, ~~the~~ transferability of managerial skills to another employer, ~~the~~ relevance of ~~the executive officer's~~ experience to other potential employers and ~~the~~ readiness ~~of the executive officer~~ to assume a more significant role with another organization. In addition, we consider the executive officer's current base salary in relation to the market pay of similar companies.

~~Compensation~~24 orTable ~~amounts realized by executives from prior compensation from us, such as gains from previously awarded stock options or options awards, are taken into account in setting other elements~~ of compensation, such as base pay, or awards of stock options under our long-term equity incentive program. We believe that our executive officers should be fairly compensated each year relative to market pay levels of similar companies and equity among all our executive officers. Moreover, we believe that our long-term incentive compensation program furthers our significant emphasis on pay for performance compensation.Contents

24Compensation or amounts realized by executives from prior compensation from us, such as gains from previously awarded stock options or options awards, are taken into account in setting other elements of executive compensation, such as base pay or awards of stock options under our long-term equity incentive program. We believe that our executive officers should be fairly compensated each year relative to market pay levels of similar companies and equity among all our executive officers. Moreover, we believe that our long-term incentive compensation program furthers our significant emphasis on pay for performance compensation.

Annual Cash Compensation

To attract and retain executives with the ability and the experience necessary to lead us and deliver strong performance to our shareholders, we provide a competitive total compensation package for companies comparable to Guitammer. To ensure that weeach ~~compare~~executive ~~with.~~is ~~Base~~appropriately compensated, base salaries and total compensation are targeted atto market levels of similar companies, in addition to considering individual performance and experience~~, to ensure that each executive is appropriately compensated~~.

Base Salary

Annually, we review salary ranges and individual salaries for our executive officers. WeBase ~~establish the base~~ salary for each executive officer ~~based~~is determined on consideration ofby market pay levels of similar companies and internal factors, such as the individual's performance, ~~and~~ experience, and the pay of others on the executive team.

We consider market pay levels among ~~individuals in~~ comparable industry positions with transferable skills within our industry and comparable companies in general industry. When establishing the base salary of any executive officer, we also consider business requirements for certain skills, individual experience, ~~and~~ contributions, ~~the~~and roles and responsibilities of ~~the executive~~ and other relevant factors. We believe a competitive base salary is necessary to attract and retain an executive management team with the appropriate abilities and experience required to lead us. Approximately 30% to 90% of an executive officer’s total cash compensation, depending on the executive's role with us, is paid as a base salary.

The base salaries that are paid to our ~~named~~Named ~~executive~~Executive ~~officers~~Officers are set forth below in the Summary Compensation Table - See "Summary of Compensation." For the fiscal year ended December 31, ~~2014~~2015, cash compensation to our ~~named~~Named ~~executive~~Executive ~~officers~~Officers was $~~100~~153,~~000~~870 to our ~~chief~~Chief ~~executive~~Executive ~~officer~~Officer and $7567,~~000~~245 to our ~~CFO~~Chief Financial Officer.

Long-term Equity Incentive Compensation

We award long-term equity incentive grants to executive officers and directors, including certain ~~named~~Named ~~executive~~Executive ~~officers~~Officers, as part of our total compensation package. These awards are consistent with our pay for performance principles and align the interests of the executive officers to the interests of our shareholders. The ~~board~~Board of ~~directors~~Directors ~~reviews~~review and approve the amount of each award to be granted to each named executive officer ~~and approves each award~~. Long-term equity incentive awards are made pursuant to our stock option plans.

Our long-term equity incentive compensation is currently exclusively in the form of options to acquire our common stock. The value of the stock options awarded is dependent upon the performance of our common stock price. The ~~board~~Board of ~~directors~~Directors and management believe that stock options currently are the appropriate vehicle to provide long-term incentive compensation to our executive officers. Other types of long-term equity incentive compensation may be considered in the future as our business strategy evolves. Stock options are awarded on the basis of anticipated service to us and vest as determined by the ~~board~~Board of ~~directors~~Directors.

~~Options~~25 ~~are~~Table ~~granted with an exercise price equal to the fair market value~~ of our common stock on the date of grant. Fair market value is defined as the closing market price of a share of our common stock on the date of grant. We do not have any program, plan or practice of setting the exercise price based on a date or price other than the fair market value of our common stock on the grant date. Like our other pay components, long-term equity incentive award grants are determined based on competitive market levels of comparable companies.Contents

Options are granted with an exercise price equal to the fair market value of our common stock on the date of grant. Fair market value is defined as the closing market price of a share of our common stock on the date of grant. We do consider or offer programs, plans or practices of setting the exercise price based on a date or price other than the fair market value of our common stock on the grant date. Like our other pay components, long-term equity incentive award grants are determined based on competitive market levels of comparable companies.

Generally, we do not consider an executive officer's stock holdings or previous stock option grants in determining the number of stock options to be granted. We believe that our executive officers should be fairly compensated each year relative to market pay levels of comparable companies and relative to our other executive officers. Moreover, we believe that our long-term incentive compensation program furthers our significant emphasis on pay for performance compensation. We do not have any requirement that executive officers hold a specific amount of our common stock or stock options.

25The Board of Directors have the discretion to make stock option awards to executive officers at other times such as the hiring of a new executive officer, the promotion of an executive officer, to reward executive officers, for retention purposes or other circumstances recommended by management. The exercise price of any such grant is the fair market value of our stock on the grant date.

The board of directors retains discretion to make stock option awards to executive officers at other times, including in connection with the hiring of a new executive officer, the promotion of an executive officer, to reward executive officers, for retention purposes or for other circumstances recommended by management. The exercise price of any such grant is the fair market value of our stock on the grant date.

For accounting purposes, we apply the guidance in Accounting Standards Codification 718, stock compensation (ASC 718), to record compensation expense for our stock option grants. ASC 718 is used to develop the assumptions necessary and the model appropriate to value the awards as well as the timing of the expense recognition over the requisite service period, generally the vesting period, of the award.

Executive officers recognize taxable income from stock option awards when a vested option is exercised. We generally receive a corresponding tax deduction for compensation expense in the year of exercise. The amount included in the executive officer's wages and the amount we may deduct is equal to the common stock price when the stock options are exercised less the exercise price multiplied by the number of stock options exercised. We currently do not pay or reimburse any executive officer for any taxes due upon exercise of a stock option.

Overview of ~~2014~~2015 Compensation

We believe that the total compensation paid to our ~~named~~Named ~~executive~~Executive ~~officers~~Officers for the fiscal year ended December 31, ~~2014~~2015 achieves the overall objectives of our executive compensation program. Executive compensation for ~~2014~~2015 was competitive with comparable companies. See "Summary of Compensation."

Other Benefits

Health and Welfare Benefits

All full-time employees, including our ~~named~~Named ~~executive~~Executive ~~officers~~Officers, may participate in our health and welfare benefit program.

Table of Contents

Stock Ownership Guidelines

Stock ownership guidelines have not been implemented by the ~~board~~Board of ~~directors~~Directors for our executive officers. We continue to periodically review best practices and re-evaluate our position with respect to stock ownership guidelines.

Securities Trading Policy

Our securities trading policy states that executive officers, including the named executive officers, and directors may not purchase or sell puts or calls to sell or buy our stock, engage in short sales with respect to our stock, or buy our securities on margin.

Tax Deductibility of Executive Compensation

Limitations on deductibility of compensation may occur under Section 162(m) of the Internal Revenue Code which generally limits the tax deductibility of compensation paid by a public company to its chief executive officer and certain other highly compensated executive officers to one million dollars in the year the compensation becomes taxable to the executive officer. There is an exception to the limit on deductibility for performance-based compensation that meets certain requirements.

Although deductibility of compensation is preferred, tax deductibility is not a primary objective of our compensation programs. We believe that achieving our compensation objectives set forth above is more important than the benefit of tax deductibility and we reserve the right to maintain flexibility in how we compensate our executive officers that may result in limiting the deductibility of amounts of compensation from time to time.

Summary Compensation Table~~. The table below sets forth for our last three completed fiscal years, the compensation earned by our President and CEO and CFO, who are our only “Named Executive Officers”.~~

SUMMARY COMPENSATION TABLE
Name and Principal Position	Year		Salary ($)			Option Awards($)(1)(5)		All Other Compensation ($)(2)		Total ($)
Mark A. Luden		2014	$	130,000(4	)	$	45,327	$	1,499	$	176,826
President, CEO, Secretary		2013	$	100,000		$	-	$	1,394	$	101,394
		2012	$	117,692(3	)	$	472,602	$	1,499	$	581,793
Richard E. Conn		2014	$	75,000		$	17,421	$	2,747	$	95,168
CFO and Treasurer		2013	$	75,000		$	-	$	2,119	$	77,119
		2012	$	71,250		$	76,017	$	1,999	$	149,266

The table below sets forth for our last three completed fiscal years, the compensation earned by our President and CEO and CFO, who are our only “Named Executive Officers”.

(1) In 2012, Mr. Luden received ten-year options to purchase 3,000,000 shares of our Common Stock, at an exercise price of $0.25 per share as additional compensation for his service to the Company. The options were valued at $472,602 according to the Black-Scholes option pricing model. Also in 2012, Mr. Conn received ten-year options to purchase 500,000 shares of our Common Stock, at an exercise price of $0.25 per share as additional compensation for his service to the Company. The options were valued at $76,017 according to the Black-Scholes option pricing model. The exercise price was lowered to $0.075 by the Board of Directors on December 4, 2014 to reflect the current trading range of the stock as the original exercise price of $0.25 did not provide the incentives originally expected by the Board when the options were granted.

SUMMARY COMPENSATION TABLE
Name and Principal Position	Year	Salary ($)			Option Awards ($)		All Other Compensation ($)(1)		Total ($)

Mark A. Luden	2015	$	165,000	(3)	$	-	$	1,940	$	166,940
President, CEO, Secretary	2014	$	130,000	(2)	$	45,327	$	1,499	$	176,826
	2013	$	100,000		$	-	$	1,394	$	101,394

Richard E. Conn	2015	$	70,620	(4)	$	-	$	2,132	$	72,752
CFO and Treasurer	2014	$	75,000		$	17,421	$	2,747	$	95,168
	2013	$	75,000		$	-	$	2,119	$	77,119

~~(2)~~______________ ~~Represents health insurance premiums paid by the Company.~~

(3) Includes $10,000 performance bonus from 2012, paid in 2013.

(1)	Represents health insurance premiums paid by the Company.

(2)	This includes a bonus of $30,000 approved by the Board on 12/2/2014, but was not paid in 2014 or 2015

(3)	This amount was approved by the Board 12/2/2014. $11,130 was deferred and not paid in 2015.

(4)	This amount was approved by the Board 12/2/2014. $3,375 was deferred and not paid in 2015.

~~(4)~~27 ~~This~~Table ~~includes a bonus~~ of ~~$30,000 which was approved by the Board on 12/2/2014, but was not paid in 2014.~~Contents

(5) Compensation expense includes the value of the reduction in the exercise price of stock options issued in 2012 from $.25 to $.075 which was $45,327 for Mark Luden and $8,461 for Richard Conn.

Compensation of Directors

On December 3, 2014, the Board approved and granted 1,500,000 stock options to the two non-employee directors of the Company with an exercise price of $.075 per share with a vesting schedule of 25% on the first anniversary of the grant, 25% on the second anniversary of the grant, 25% on the third anniversary of the grant and 25% on the fourth anniversary of the grant. Full vesting is to occur upon a change in ownership of the Company for all of these stock options. We reimburse our directors for their reasonable expenses incurred in attending meetings of our board of directors. Provisions of Nevada Law allow us to indemnify our officers, employees, directors and director nominees against liabilities and other expenses incurred as the result of defending or administering any pending or anticipated legal issue in connection with their service to us if it is determined that that person acted in good faith and in a manner which he reasonably believed was in our best interest.

Retention and Bonus Plan for Key Employees

In December of 2006, our board of directors approved a retention and bonus plan for key employees. Our board approved the plan in order to induce key employees to remain with the Company, particularly in the event of a “change of control” such as the following: a merger or consolidation of which the Company is not the surviving corporation; a merger or consolidation in which the Company’s then current shareholders hold less than 50% of the Company’s outstanding stock; the sale of all or substantially all of the Company’s assets; the acquisition, sale or transfer of more than 50% of the outstanding voting securities of the Company; or the effectiveness of the filing of a registration statement for the public offering of securities of the Company and sale of more than 50% of the outstanding securities of the Company pursuant to such registration. If within six (6) months after a change of control a participant of the plan (which participants are determined in the sole discretion of the board of directors) is terminated from employment by the Company due to his or her disability, death or by the Company for any reason other than cause, such participant is due severance compensation from 0% to 250% of the participant’s base salary based on the amount of total consideration paid in connection with the change of control. Our board has sole authority to administer and/or amend the plan.

On November 16, 2011, the Board of Directors approved a stock option plan for its employees and approved 600,000 stock options for three of its employees. The Board was advised by its legal counsel that certain changes to the stock option plan were needed and would require the previous plan and option grants to be cancelled and then replaced with a new plan and new option grants. On February 1, 2012, the Board cancelled the plan approved on November 16, 2011 and approved a new 2012 Incentive Stock Option Plan (“2012 ISOP”) and 600,000 stock options for three of its employees, (500,000 of which were granted to Rich Conn, CFO) with an exercise price of $0.25 per share with a vesting schedule of 60% on the first anniversary of the grant, 20% on the second anniversary of the grant and the final 20% on the third anniversary of the grant. On November 26, 2012, the Board approved a stock option plan and granted 3,000,000 stock options to the Company’s president and CEO, with an exercise price of $.25 per share with a vesting schedule of 33 and 1/3% on the first anniversary of the grant, 33 and 1/3% on the second anniversary of the grant and the final 33 and 1/3% on the third anniversary of the grant. See discussion below of the 2012 ISOP that was approved by the Majority Shareholders on December 31, 2012. On November 26, 2012, the Board approved a CEO Compensation plan that resulted in the Company’s president and CEO being awarded a $10,000 bonus as a result of the Company’s revenues exceeding $2,100,000 dollars and the Company’s gross margin exceeding 37.5%. The compensation plan was for 2012 only.

On December 4, 2014, the Board of Directors approved the following: the exercise price of incentive stock options previous issued by the Company on February 1, 2012 and November 26, 2012, were changed to $0.075 per share, the closing price of the Company’s stock on December 4^th, 2014. The Company issued incentive stock options exercisable at $0.075 per share, the closing price of the Company’s stock on December 4^th, 2014, to incentivize the Company’s employees as follows: 1,000,000 incentive stock options to Marvin Clamme, 500,000 incentive stock options to Nancy Luden, 250,000 incentive stock options to Rich Conn, 100,000 incentive stock options to Brendan Kelly, 100,000 incentive stock options to Andrew Luden. The vesting schedule will be as follows: of 60% on the first anniversary of the grant, 20% on the second anniversary of the grant and the final 20% on the third anniversary of the grant. The Company will issue incentive stock options exercisable at $0.075 per share, the closing price of the Company’s stock on December 4^th, 2014 as follows: 750,000 incentive stock options to Walter Doyle and 750,000 incentive stock options to Ken McCaw. The vesting schedule will be as follows: 25% on the first anniversary of the grant, 25% on the second anniversary of the grant, 25% on the third anniversary of the grant and 25% on the fourth anniversary of the grant.

28 Table of Contents

Outstanding Equity Awards at Fiscal Year End

The table below shows outstanding equity awards for the Company's executive officers as of the fiscal year ended December 31, ~~2014~~2015, which equity awards consists of ten-year, non-qualified stock options granted under the Company’s 1999 Non-Qualified Stock Option Plan (the "1999 Options"), all of which are vested and exercisable but none of which have been exercised and options granted under the 2012 ISOP, ~~some~~ none of which are vested ~~as shown below~~.

	~~Option Awards~~	Option Awards				~~Stock Awards~~											Stock Awards
Name	~~Number of Securities Underlying Unexercised Options (#) Exercisable~~	Number of Securities Underlying Unexercised Options (#) ~~Unexercisable~~Exercisable	~~Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)~~	~~Option Exercise Price ($)~~	~~Option Expiration Date~~	Number of ~~Shares~~Securities orUnderlying ~~Units~~Unexercised ofOptions ~~Stock That Have Not Vested~~ (#) Unexercisable	~~Market Value of Shares or Units of Stock That Have Not Vested ($)~~	~~Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)~~	~~Equity Incentive Plan Awards Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)~~	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)		OptionExercise Price ($)		Option ExpirationDate			Number of Shares or Units of Stock That Have Not Vested (#)		Market Value of Shares or Units of Stock That Have Not Vested ($)		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)		Equity Incentive Plan Awards Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
	(1)
			(1	)
Mark A. Luden CEO	3,838,690	0	0	$0.0032	(2)	0	$0	0	$0
Mark A.			2,588,690				0				0	$	0.0032		(2	)		0	$	0		0	$	0
	6,074,533	0	0	$0.02	(3)	0	$0	0	$0
Luden,			6,574,533				0				0	$	0.02		(3	)		0	$	0		0	$	0
	3,000,000	0	3,0000,000	.075	(4)	1,000,000	$0	1,000,000	$0
CEO			3,000,000				0				3,0000,000		.075		(4	)		1,000,000	$	0		1,000,000	$	0
Richard E. Conn CFO	355,629	0	0	$.0032	(5)	0	$0	0	$0
Richard E.			355,629				0				0	$	.0032		(5	)		0	$	0		0	$	0
	500,000	0	500,000	.075	(6)	100,000	$0	100,000	$0
Conn			500,000				0				500,000		.075		(6	)		0	$	0		0	$	0
	200,000	0	0	$.0032	(7)	0	$0	0	$0
CFO			200,000				0				0	$	.0032		(7	)		0	$	0		0	$	0
	~~250,000~~	0	250,000	~~.075~~	~~(8)~~	~~250,000~~	0	~~250,000~~	$0		250,000		.075		(8	)		100,000				100,000	$	0

~~(1) Post-Reorganization shares aggregate 14,218,852 shares at a conversion ratio of 31,206 to 1.~~______________

(2) Options for 1,640,851 shares expire June 29, 2019, for 1,029,798 shares December 14, 2020 and for 1,168,041 shares December 30, 2019.

(1)	Post-Reorganization shares aggregate 12,045,436 shares at a conversion ratio of 31,206 to 1.

(2)	Options for 2,496,480 shares expire June 30, 2019, for 29,798 shares December 15, 2019 and for 62,412 shares December 31, 2019.

(3)	Options for 1,581,573 shares expire March 31, 2017 and for 4,492,960 shares March 13, 2019.

(4)	The exercise price was lowered to $0.075 by the Board of Directors on December 4, 2014 to reflect the current trading range of the stock as the original exercise price of $0.25 did not provide the incentives originally expected by the Board when the options were granted.

(5)	Options for 355,629 shares expire June 30, 2019 and were assigned to Richard E. Conn from Mark A. Luden, CEO on April 19, 2012.

(6)	The exercise price was lowered to $0.075 by the Board of Directors on December 4, 2014 to reflect the current trading range of the stock as the original exercise price of $0.25 did not provide the incentives originally expected by the Board when the options were granted.

(7)	Options for 200,000 shares expire December 31, 2019 and were purchased from Kenneth McCaw on November 25, 2013.

(8)	Remaining options vest 50,000 on December 4, 2016, and 50,000 on December 4, 2017.

~~(3)~~29 ~~Options~~Table ~~for~~of ~~1,581,573 shares expire February 28, 2018 and for 4,492,960 shares March 12, 2019.~~Contents

(4) Options for 3,000,000 shares expire November 25, 2022. Shares vest 1,000,000 on November 25, 2013, 1,000,000 on November 25, 2014, and 1,000,000 on November 25, 2015. The exercise price was lowered to $0.075 by the Board of Directors on December 4, 2014 to reflect the current trading range of the stock as the original exercise price of $0.25 did not provide the incentives originally expected by the Board when the options were granted.

(5) Options for 355,629 shares expire June 29, 2019 and were assigned to Richard E. Conn from Mark A. Luden, CEO on April 19, 2012.

(6) Options for 500,000 shares expire January 31, 2022. Shares vest 300,000 on January 31, 2013, 100,000 on January 31, 2014, and 100,000 on January 31, 2015. The exercise price was lowered to $0.075 by the Board of Directors on December 4, 2014 to reflect the current trading range of the stock as the original exercise price of $0.25 did not provide the incentives originally expected by the Board when the options were granted.

(7) Options for 200,000 shares expire December 30, 2019 and were purchased from Kenneth McCaw on November 25, 2013.

(8) Options for 250,000 shares expire December 4, 2024. Shares vest 150,000 on December 4, 2015, 50,000 on December 4, 2016, and 50,000 on December 4, 2017.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth information concerning the beneficial ownership of the Company’s Common Stock on December 31, ~~2014~~2015 by (i) each person who is known by the Company to own beneficially more than 5% of the Common Stock, (ii) each director of The Guitammer Company, (iii) each of the executive officers of The Guitammer Company and (iv) all directors and executive officers of The Guitammer Company as a group.

Name and Address(1) of Beneficial Owner	Shares BeneficiallyOwned		Options and Warrants BeneficiallyOwned			Total Shares and Options BeneficiallyOwned			Percentages(2)
Name and Address of Beneficial Owner (1)	Shares Beneficially Owned		Options and Warrants Beneficially Owned			Total Shares and Options Beneficially Owned			Percentages (2)
Mark Luden President, CEO and Director		6,058,610		13,463,223(5	)		19,521,833			20.24	%
Mark LudenPresident, CEO and Director		6,058,610		12,713,223	(5)		18,771,833	(5)		13.07	%
Richard E. Conn, CFO and Treasurer		39,206		1,305,629			1,344,835			10.6094	%
Marvin Clamme Vice President		6,397,230		6,297,166			12,694,396			14.22	%
Marvin ClammeVice President		6,397,230		5,680,900			12,078,130			8.41	%
Kenneth McCaw Director		2,340,450		8,903,946			11,244,396			12.23	%
Kenneth McCawDirector		2,340,450		8,903,946			11,244,396			7.83	%
Walter J. Doyle(3) Director		2,631,614		750,000			3,381,614			4.04	%
Walter J. Doyle(3)Director		2,631,614		750,000			3,381,614			2.35	%
Christopher Doyle(4) 1970 Jewett Rd Powell, OH 43065		12,929,246		6,699,928			19,629,174			21.88	%
Christopher Doyle(4)1970 Jewett RdPowell, OH 43065		14,595,996		6,699,928			21,295,924			14.83	%
Julie E. Jacobs Trust c/o Francine I. Jacobs, Trustee 1105 Schrock Road Suite 602 Columbus, OH 43229		9,413,451		2,699,857			12,113,308			14.13	%
Julie E. Jacobs Trustc/o Francine I. Jacobs, Trustee1105 Schrock RoadSuite 602Columbus, OH 43229		9,413,451		3,199,856			12,613,307			8.41	%
All Officers and Directors as a a Group (5 Persons)		17,467,110		30,719,964			48,187,074			42.37	%
All Officers and Directors as aa Group (5 Persons)		17,467,110		29,353,698			46,820,808			32.60	%

~~(1)~~_______________ ~~Addresses for the officers and directors are the Company’s address.~~

(2) The number of shares of Common Stock owned are those "beneficially owned" as determined under SEC regulations, including any shares of Common Stock as to which a person has sole or shared voting or investment power and any shares of Common Stock which the person has the right to acquire within 60 days through the exercise of any option, warrant or right. More than one person may be deemed to be a beneficial owner of the same securities. The percentage of beneficial ownership by any person as of a particular date is calculated by dividing the number of shares beneficially owned by such person, which includes the number of shares as to which such person has the right to acquire voting or investment power within 60 days, by the sum of the number of shares outstanding as of such date plus the number of shares as to which such person has the right to acquire voting or investment power within 60 days. Consequently, the denominator used for calculating such percentage may be different for each beneficial owner. As of December 31, 2014, there were 83,000,498 shares of Common Stock outstanding.

(1)	Addresses for the officers and directors are the Company’s address.

(2)	The number of shares of Common Stock owned are those "beneficially owned" as determined under SEC regulations, including any shares of Common Stock as to which a person has sole or shared voting or investment power and any shares of Common Stock which the person has the right to acquire within 60 days through the exercise of any option, warrant or right. More than one person may be deemed to be a beneficial owner of the same securities. The percentage of beneficial ownership by any person as of a particular date is calculated by dividing the number of shares beneficially owned by such person, which includes the number of shares as to which such person has the right to acquire voting or investment power within 60 days, by the sum of the number of shares outstanding as of such date plus the number of shares as to which such person has the right to acquire voting or investment power within 60 days. Consequently, the denominator used for calculating such percentage may be different for each beneficial owner. As of December 31, 2015, there were 83,343,057 shares of Common Stock outstanding.

(3)	Includes shares held in The Walter J. Doyle Trust, which shares, options and warrants Mr. Doyle is deemed to beneficially own.

(4)	Christopher Doyle is the adult son of Walter J. Doyle. His shares include shares and warrants owned by Forest Capital which Christopher Doyle is deemed to be beneficial owner.

(5)	Includes 550,000 options owned by Nancy Luden, wife of Mark Luden.

~~(3)~~30 ~~Includes~~Table ~~shares~~of ~~held in The Walter J. Doyle Trust, which shares, options and warrants Mr. Doyle is deemed to beneficially own.~~Contents

(4) Christopher Doyle is the adult son of Walter J. Doyle. His shares include shares and warrants owned by Forest Capital which Christopher Doyle is deemed to beneficially own.

(5) Includes 550,000 options owned by Nancy Luden, wife of Mark Luden.

Except for the transactions described below, none of our directors, officers or principal shareholders, or any associate or affiliate of the foregoing, have any interest, direct or indirect, in any transaction or in any proposed transactions, during the years ended December 31, ~~2013~~2015 and ~~2012~~2014.

In July of 2009, we entered into a Working Capital Loan and Consulting Agreement (the “Working Capital Loan”), with Forest Capital, LLC (“Forest”), which is controlled by Walter J. Doyle, a Director of the Company. Pursuant to the Working Capital Loan, Forest loaned us an aggregate of $250,000, which amount bore interest at the rate of 10% per annum. The principal amount of the loan was initially payable by us upon the earlier to occur of (a) the completion of a significant funding transaction or (b) December 31, 2009, provided that the Company could extend the loan to December 31, 2010, provided that we pay all of the accrued interest then due on the loan by December 31, 2009, and that we agree to increase the interest rate of the Working Capital Loan to 20% per annum, compounded monthly and payable annual. The Working Capital Loan was so extended and was due on demand. As of February 29, 2012, the balance due on this loan was $150,000. In consideration for Forest agreeing to the Working Capital Loan, we agreed to issue and in January 2010 issued to Forest 85.3 shares of Guitammer-Ohio which because of the Reorganization have been converted into an aggregate of 2,661,871 shares of the Company’s common stock (subsequently transferred to The Walter J. Doyle Trust) and granted 10-year options to purchase shares of Guitammer-Ohio which because of the Reorganization have been converted into options to purchase 655,326 shares of the Company’s Common Stock at an exercise price of $0.02 per share. Also, the Company’s directors, including Mr. Luden, Mr. McCaw and Mr. Clamme agreed to transfer and have each transferred to Forest options to purchase shares of Guitammer-Ohio which because of the Reorganization have been converted into options to purchase 2,014,971 shares of the Company’s Common Stock (a total of 6,044,914 shares) at an exercise price of $0.02 per share. Also, the Company agreed to provide Forest the right to appoint one member of the board of directors of the Company, which member is Mr. Doyle. On December 21, 2011, $100,000 of the principal and all interest due on the loan was converted to shares of the Company’s stock pursuant to the note conversion agreement. Also, the note was amended on December 21, 2011 reissued and now bears interest at a rate of 8%. The first interest payment was due on January 3, 2013 and was paid by issuing 49,562 shares of the Company’s stock. On January 27, 2014, the Guitammer Company (the Company) entered into a Note Restatement Agreement with a revised principal balance of $162,106.52, which is the sum of (a) $150,000, the original unpaid principal amount of the 2011 Note, plus (b) $12,106.52, which is the unpaid accrued interest on that original unpaid principal balance computed from January 1, 2013 through January 3, 2014, and which is being converted into unpaid principal as of January 3, 2014. All accrued and unpaid interest on the Note is payable on January 3, 2015, and all unpaid principal and all remaining accrued and unpaid interest on the Note is payable in full on January 3, 2016.

In May 2003, we borrowed $800,000 at 8% interest per annum from Thelma Gault (the “Gault Loan”) (a shareholder of the Company and owner of Eminence Speaker LLC, a manufacturing partner of the Company). The Gault Loan included a security interest over substantially all of our assets, and required that we needed Ms. Gault’s prior approval before incurring any additional debt. In connection with the Gault Loan, we granted Ms. Gault options to purchase shares of Guitammer-Ohio which because of the Reorganization have been converted into options to purchase an aggregate of 3,276,630 shares of our Common Stock. All of the options have an exercise price of $0.02 per share and have vested. The Gault Loan was originally due May 6, 2008.

The Gault Loan was amended in January 2008 to increase the interest rate to 10% per annum (beginning on May 6, 2008), provide for 72 monthly payments to be made on the loan starting in June 2008, to extend the due date of the loan until June 1, 2014, and to provide that in the event the Company obtains financing of over $4,000,000, the Company shall use commercially reasonable efforts to negotiate to use a portion of the funding to repay the Gault Note and that the Company shall use its commercially reasonable efforts to make yearly prepayments on the loan in an amount equal to 7.5% of the Company’s available cash on hand as of the end of the immediately preceding year. The amendment to the Gault Loan also added certain events of default under the loan including if Mark Luden is no longer active in the day-to-day operations of the Company, absent the written approval of a replacement by Ms. Gault.

Table of Contents

On April 25, 2008 Ms. Gault signed an Intercreditor Agreement with the Director of Development of the State of Ohio, also a creditor of the Company, in which she agreed to share, paripassu, with the Director her security interest in the assets of the Company securing the Gault Loan.

In February 2009, the Gault Loan was amended again to subordinate the repayment of the loan to the repayment of the Credit Agreement described below. In November 2010, the Gault Loan was amended once again to subordinate the repayment of the loan to the repayment of the Julie E. Jacobs Trust’s and the Standard Energy Company’s loans described below. The outstanding balance on the Gault Loan as of December 31, 2013 was $584,352 and it is due on demand.

On March 9, 2009, we entered into a Credit Facilitation Agreement (the “Credit Agreement”) with Walter J. Doyle, as Trustee of the Walter J. Doyle Trust dated February 5, 1992, and Francine I. Jacobs, Trustee of the Revocable Trust created by Julie E. Jacobs under Agreement dated November 25, 2009 (collectively “Doyle and Jacobs”), both of whom were investors in the Company. Pursuant to the Credit Agreement, Doyle and Jacobs each agreed to guarantee 50% of a Merrill Lynch line of credit loan to the Company of $400,000, which loan carries a variable interest rate tied to the LIBOR rate. The amount loaned pursuant to the Credit Agreement was to be used to acquire inventory and finance accounts receivable. The loan is secured by a first priority security interest and lien on all of Guitammer property and assets. We agreed to pay Doyle and Jacobs an annual fee of 4% of the outstanding amount of the Credit Agreement, to sell to each of Doyle and Jacobs an aggregate of 20% of the then outstanding shares of Guitammer-Ohio for $1.00 per share, or 292 shares of Guitammer-Ohio each which because of the Reorganization have been converted into 9,112,152 shares of our Common Stock, an aggregate of 18,224,304 shares, and pay the legal fees associated with the Credit Agreement. On December 21, 2011, the annual fee that was due on the loans was converted to shares of the Company’s stock pursuant to the note conversion agreement.

Additionally, in connection with the Credit Agreement, we agreed to grant to certain of our key employees, directors and officers options to purchase shares of Guitammer-Ohio which because of the Reorganization were converted into options to purchase shares of our Common Stock, as follows:

	·	Ken McCaw – Options to purchase 3,744,720 shares of Common Stock;

	·	Marvin Clamme – Options to purchase 3,744,720 shares of Common Stock; and

	·	Mark Luden – Options to purchase 4,992,960 shares of Common Stock.

All of the options have an exercise price of $0.02 per share and have vested.

The Credit Agreement is due and payable on demand. The balance due of the Credit Agreement as of December 31, 2013 was $395,350.

On April 7, 2010 the Julie E. Jacobs Trust (“Jacobs Trust”) loaned us $100,000. The loan was due on June 7, 2010 but has not been paid. The Note bore interest at the rate of 30% per annum and was payable on demand. As additional consideration for the loan, the Company agreed to issue to the Jacobs Trust Warrants to purchase 125,003 shares of our Common Stock post- Reorganization at $0.005 per share at the time of a Company IPO. On December 21, 2011, the interest due on the loan was converted to shares of the Company’s stock pursuant to the note conversion agreement. Also, the note was amended on December 21, 2011 reissued and now bears interest at a rate of 8%. The first interest payment was due on January 3, 2013 and was paid by issuing 33,042 shares of the Company’s stock. On January 27, 2014, the Company entered into a Note Restatement Agreement with the Julie Jacobs Trust with a revised principal balance of $108,071.01, which is the sum of (a) $100,000, the original unpaid principal amount of the 2011 Note, plus (b) $8,071.01, which is the unpaid accrued interest on that original unpaid principal balance computed from January 1, 2013 through January 3, 2014, and which is being converted into unpaid principal as of January 3, 2014. All accrued and unpaid interest on the Note is payable on January 3, 2015, and all unpaid principal and all remaining accrued and unpaid interest on the Note is payable in full on January 3, 2016.

32 Table of Contents

On October 5, 2010 the Standard Energy Company loaned us $100,000. Standard Energy Company is controlled by Gerald Jacobs, a substantial shareholder of the Company. The loan bore interest at the rate of 10% per annum, is unsecured and was payable September 30, 2011. On December 21, 2011, the principal and interest due on the loan was converted to shares of the Company’s stock pursuant to the note conversion agreement.

On October 5, 2010 the Company issued its Promissory Note payable to Walter J. Doyle Trust in the amount of $25,000 to evidence a loan made to the Company that date. The note bore interest at the rate of 10% per annum and was due September 30, 2011. On December 21, 2011, the principal and interest due on the loan was converted into 112,108 shares of the Company’s Common Stock.

On November 12, 2010 the Company arranged an inventory financing agreement with the Walter J. Doyle Trust and the Julie E. Jacobs Trust, for an aggregate of $300,000 and a monthly interest rate of 2%. The loan was evidenced by two-$150,000 promissory notes payable to the lenders (one of which is the Standard Energy Company) and secured by a first lien on all of the assets of the Company. The notes were due on October 14, 2011. On December 21, 2011, the principal and interest on the loan was converted into 1,500,456 shares of the Company’s Common Stock.

Director Independence

In the opinion of the Board of Directors, no Director may be deemed independent.

Item 14. Principal Accounting Fees and Services

	Year ending December 31,2014		Year ending December 31,2013
	Year ending		Year ending
	December 31,2015		December 31,2014
Audit and review fees	$	61,000	$	61,000
Audit-related Fees		-		-
Tax fees		-		-
All other fees		-		-

33 Table of Contents

PART IV

Item 15. Exhibits, Financial Statement Schedules

1. Consolidated Financial Statements.

The following consolidated financial statements of The Guitammer Company and subsidiary, are submitted as a separate section of this report (See F-pages) and are incorporated by reference in Item 8:

~~F-1~~	~~Report of Independent Registered Public Accounting Firm~~F-1	Report of Independent Registered Public Accounting Firm
~~F-2~~	~~Consolidated Balance Sheets as of December 31, 2014 and 2013~~F-2	Consolidated Balance Sheets as of December 31, 2015 and 2014
~~F-3~~	~~Consolidated Statements of Operations for the years ended December 31, 2014 and 2013~~F-3	Consolidated Statements of Operations for the years ended December 31, 2015 and 2014
~~F-4~~	~~Consolidated Statement of Changes in Stockholders' Deficit for the years ended December 31, 2014 and 2013~~F-4	Consolidated Statement of Changes in Stockholders' Deficit for the years ended December 31, 2015 and 2014
~~F-5~~	~~Consolidated Statements of Cash Flows for the years ended December 31, 2014 and 2013~~F-5	Consolidated Statements of Cash Flows for the years ended December 31, 2015 and 2014
~~F-6~~	~~Notes to Consolidated Financial Statements~~F-6	Notes to Consolidated Financial Statements

All schedules are omitted because they are either not required or not applicable or the required information is shown in the Consolidated Financial Statements or Notes thereto.

2. Exhibits

a. The following exhibits are filed as part of this report or incorporated herein as indicated.

Exhibit No.	Date of Document	Name of Document
2.0*	May 17, 2011	Agreement and Plan of Reorganization
3.0*	March 3, 1990	Articles of Incorporation of Guitammer-Ohio
3.1*	June 6, 2005	Certificate of Amendment of Guitammer- Ohio
3.2*	June 17, 2005	Certificate of Amendment of Guitammer- Ohio
3.3*		Code of Regulations of Guitammer - Ohio
3.4*	May 17, 2011	Articles of Incorporation of Guitammer- Nevada
3.5*		Bylaws of Guitammer - Nevada
4.0*	~~September~~Sept. 30, 1999	1999 Non-Qualified Stock Option Plan, as amended
4.1*		Form of Option Agreement
4.2*	June 17, 2005	2005 Amendment to1999 Non-Qualified Stock Option Plan
4.3**	July 14, 2011	Form of Warrant issued to The Walter J. Doyle Trust
4.4**	July 14, 2011	Form of Warrant issued to Standard Energy Company
10.1*	November 1, 2002	Richard B. Luden $82,000 Note
10. 1*	Nov. 1, 2002	Richard B. Luden $82,000 Note
10.1A#	~~December~~Dec 21, 2011	Richard Luden Conversion Agreement 82K
10.2*	May 13, 2005	Note Purchase Agreement—Walter Doyle, John O. Huston and Eric Roy
10. 2*	May 13, 2005	Note Purchase Agreement—Walter Doyle, John O. Huston and Eric Roy
10.3*	September 1, 2007	First Amendment To Note Purchase Agreement—Walter Doyle, John O. Huston and Eric Roy
10. 3*	Sept.1, 2007	First Amendment To Note Purchase Agreement—Walter Doyle, John O. Huston and Eric Roy
10.4*	May 13, 2005	Walter J. Doyle $150,000 Note
10. 4*	May 13, 2005	Walter J. Doyle $150,000 Note
10.4A*	September 1, 2007	Amended and Restated Walter Doyle Note
10.4B###	January 31, 2012	Walter Doyle ~~150K~~150k Jan 31, 2012 Note Conversion Agreement
10.5*	May 13, 2005	Eric Roy $100,000 Note
10. 5*	May 13, 2005	Eric Roy $100,000 Note
10.5A*	March 28, 2011	Agreement to Convert An Existing Note—Eric P. Roy
10.5B*	September 1, 2007	Eric Roy 9.4 Stock Options on 100K ~~0901207 note~~0901207note
10.5C*	May 13, 2005	Eric Roy 16 stock options 05132005
10.5D*	May 13, 2006	Eric Roy 16 Stock options 05132006
10.5E*	September 1, 2007	Amended and Restated Eric Roy Note
10.5F###	January 31, 2012	Eric Roy Jan 31 2012 Note Conversion Agreement
10. 6*	May 13, 2005	John O. Huston $50,000 Promissory Note
10.6A*	September 1, 2007	John O. Huston 4.7 Stock options 09012007
10.6B*	May 13, 2005	John O. Huston 8 Stock Options 05132005
10.6C*	May 13, 2006	John O. Huston 8 Stock Options 05132006
10.6D*	September 1, 2007	Amended and Restated John O. Huston Promissory Note
10.6E###	January 31, 2012	John Huston Jan 31 2012 Note Conversion Agreement
10.7*	June 29, 2005	Note Purchase Agreement—Walter Doyle, Andrea L. Levenson and Gust Van Sant
10.8*	September 1, 2007	First Amendment To Note Purchase Agreement—Walter Doyle, Andrea L. Levenson and Gust Van Sant

35 Table of Contents

10.5D*	May 13, 2006	Eric Roy 16 Stock options 05132006
10.5E*	September 1, 2007	Amended and Restated Eric Roy Note
10.5F###	January 31, 2012	Eric Roy Jan 31, 2012 Note Conversion Agreement
10.6*	May 13, 2005	John O. Huston $50,000 Promissory Note
10.6A*	September 1, 2007	John O. Huston 4.7 Stock options 09012007
10.6B*	May 13, 2005	John O. Huston 8 Stock Options 05132005
10.6C*	May 13, 2006	John O. Huston 8 Stock Options 05132006
10.6D*	September 1, 2007	Amended and Restated John O. Huston Promissory Note
10.6E###	January 31, 2012	John Huston Jan 31 2012 Note Conversion Agreement
10.7*	June 29, 2005	Note Purchase Agreement—Walter Doyle, Andrea L. Levenson and Gust Van Sant
10.8*	September 1, 2007	First Amendment To Note Purchase Agreement—Walter Doyle, Andrea L. Levenson and Gust Van Sant
10.9*	June 29, 2005	Walter J. Doyle $50,000 Promissory Note
10.9A*	September 1, 2007	Amended and Restated Walter Doyle Note
10.9B###	January 31, 2012	Walter Doyle 50K Jan 31, 2012 Note Conversion Agreement
10.10*	June 29, 2005	Andrea Lerner Levenson $50,000 Promissory Note
10.10A*	September 1, 2007	Andrea Lerner Levenson 4.7 Stock Options on 50K 09012007 note
10.10B*	June 29, 2006	Andrea Lerner Levenson 8 stock options 6292006
10.10C*	June 29, 2005	Andrea Lerner Levenson 8 stock options 06292005
10.10D*	September 1, 2007	Amended and Restated Andrea L. Levenson Promissory Note
10.10E###	January 31, 2012	Andrea Levenson Jan 31, 2012 Note Conversion Agreement
10.11*	June 29, 2005	Gust Van Sant $50,000 Promissory Note
10.11A*	September 1, 2007	Gust Van Sant 4.7 Stock Options on 50K 09012007 note
10.11B*	June 29, 2005	Gust Van Sant 8 Stock Options 06292005
10.11C*	June 29, 2006	Gust Van Sant 8 Stock Options 06292006
10.11D*	September 1, 2007	Amended and Restated Gust Van Sant Promissory Note
10.11E###	January 31, 2012	Gus Van Sant Jan 31, 2012 Note Conversion Agreement
10.12*	July 19, 2005	Promissory Note --Opal Private Equity Fund, LP
10.12A*	September 1, 2007	Opal Private Equity Stock Warrants on 100K note
10.12B*	July 19, 2005	Opal 16 Stock Warrants 07192005
10.12C*	July 19, 2006	Opal 16 Stock Warrants 07192006
10.12D*	September 1, 2007	Amended and Restated Opal Promissory Note
10.13*	September 1, 2007	First Amendment To Note Purchase Agreement--Opal Private Equity Fund, LP
10.14*	July 19, 2005	Opal Private Equity Fund, LP $100,000 Note Purchase agreement
10.15*	July 3, 2005	Forest Capital $250,000 Working Capital Loan and Consulting Agreement
10.15A*	January 1, 2010	Forest Capital 214.7 options 01012010
10.15B#	December 21, 2011	Forest Capital Amended loan agreement 150k
10.15C##	February 1, 2012	Addendum to Conversion and Amended Loan Agreement with Forest Capital
10.15D&&	December 21, 2011	Forest Capital Conversion Agreement 250K
10.15E+&+	January 31, 2014	Forest Capital $150,000 Second Restated Promissory Note Rev 01272014
10.16*	May 5, 2003	Thelma Gault $800,000 Loan and Option Agreement
10.17*	January 31, 2008	First Amendment To Thelma Gault $800,000 Loan Agreement
10.18*	February 28, 2009	Second Amendment To Thelma Gault $800,000 Loan Agreement
10.19*	January 31, 2008	Thelma Gault $800,000 Amended and Restated Promissory Note

36 Table of Contents

10.12*	July 19, 2005	Promissory Note --Opal Private Equity Fund, LP
10.12A*	September 1, 2007	Opal Private Equity Stock Warrants on 100K note
10.12B*	July 19, 2005	Opal 16 Stock Warrants 07192005
10.12C*	July 19, 2006	Opal 16 Stock Warrants 07192006
10.12D*	September 1, 2007	Amended and Restated Opal Promissory Note
10.13*	September 1, 2007	First Amendment To Note Purchase Agreement--Opal Private Equity Fund, LP
10.14*	July 19, 2005	Opal Private Equity Fund, LP $100,000 Note Purchase agreement
10.15*	July 3, 2005	Forest Capital $250,000 Working Capital Loan and Consulting Agreement
10.15A*	January 1, 2010	Forest Capital 214.7 options 01012010
10.15B#	December 21, 2011	Forest Capital Amended loan agreement 150k
10.15C##	February 1, 2012	Addendum to Conversion and Amended Loan Agreement with Forest Capital
10.15D&&	December 21, 2011	Forest Capital Conversion Agreement 250K
10.15E+&+	January 31, 2014	Forest Capital $150,000 Second Restated Promissory Note Rev 01272014
10.16*	May 5, 2003	Thelma Gault $800,000 Loan and Option Agreement
10.17*	January 31, 2008	First Amendment To Thelma Gault $800,000 Loan Agreement
10.18*	February 28, 2009	Second Amendment To Thelma Gault $800,000 Loan Agreement
10.19*	January 31, 2008	Thelma Gault $800,000 Amended and Restated Promissory Note
10.20*	November 18, 2010	Thelma Gault Subordination Agreement 1st Lien carve out
10.21*	March 9, 2009	Credit Facilitation Agreement—Walter J. Doyle Trust and Julie E. Jacobs Trust
10.21A*	February 26, 2009	Merrill Lynch Loan Application and acceptance
10.21B*	March 2009	Merrill Lynch Loan agreement
10.21C*	December 1, 2009	Revised Merrill Lynch Loan agreement
10.21D&&	December 21, 2011	Jacobs Trust Fee conversion agreement on 200k loan
10.21E&&	December 21, 2011	Doyle Trust Fee Conversion Agreement on 200k loan
10.22*	April 25, 2008	Ohio Innovation Loan Agreement
10.23*	April 25, 2008	Ohio Innovation Loan Security Agreement
10.24*	September 11, 2008	Ohio Innovation Loan Modification Agreement
10.24A*	September 17, 2009	Ohio Innovation Loan Modification Agreement 2nd mod
10.24B*	November 24, 2010	Ohio Innovation Loan Modification Agreement 3rd mod
10.24C-@-	December 1, 2012	Ohio Innovation Loan Modification Agreement 4th Mod
10.24D-@-	December 1, 2012	Ohio Innovation Loan Modification Agreement 5th Mod
10.25*	November 29, 2010	Ohio Innovation Loan Subordination Agreement
10.25A*	April 25, 2008	Ohio Innovation Loan Intercreditor agreement
10.25B*	April 25, 2008	Ohio Innovation Loan Cognovit promissory note
10.26*	April 7, 2010	Julie E. Jacobs Trust $100,000 Loan Agreement
10.26A#	December 21, 2011	Jacobs Trust Interest Conversion Agreement on 100K loan
10.26B#	December 21, 2011	Jacobs Trust Amended loan agreement 100K loan
10.26C+&+	January 31, 2014	Jacobs Trust $100,000 Second Restated Promissory Note Rev 01272014
10.27*	October 4, 2010	Amendment To Julie E. Jacobs Trust $100,000 Loan Agreement
10.28*	January 11, 2011	Joseph Albert $100,000 Convertible Promissory Note
10.29*	January 11, 2011	Joseph Albert $100,000 Convertible Promissory Note Extension Agreement
10.29B&&&	June 8, 2012	Joseph Albert Note Conversion Agreement
10.30*		Joseph Albert 50,000 Common Stock Purchase Warrants
10.30A*		Joseph Albert 100,000 Common Stock Purchase Warrants
10.30B&&&	June 8, 2012	Joseph Albert 150,000 Common Stock purchase Warrants
10.31*	October 5, 2010	Standard Energy Company $100,000 Loan Agreement and Promissory Note
10.31A#	December 21, 2011	Standard Energy Note Conversion Agreement

37 Table of Contents

10.21E&&	December 21, 2011	Doyle Trust Fee Conversion Agreement on 200K loan
10.22*	April 25, 2008	Ohio Innovation Loan Agreement
10.23*	April 25, 2008	Ohio Innovation Loan Security Agreement
10.24*	September 11, 2008	Ohio Innovation Loan Modification Agreement
10.24A*	September 17, 2009	Ohio Innovation Loan Modification Agreement 2nd Mod
10.24B*	November 24, 2010	Ohio Innovation Loan Modification Agreement 3rd Mod
10.24C-@-	December 1, 2012	Ohio Innovation Loan Modification Agreement 4th Mod
10.24D-@-	December 1, 2012	Ohio Innovation Loan Modification Agreement 5th Mod
10.25*	November 29, 2010	Ohio Innovation Loan Subordination Agreement
10.25A*	April 25, 2008	Ohio Innovation Loan Intercreditor agreement
10.25B*	April 25, 2008	Ohio Innovation Loan Cognovit promissory note
10.26*	April 7, 2010	Julie E. Jacobs Trust $100,000 Loan Agreement
10.26A#	December 21, 2011	Jacobs Trust Interest Conversion Agreement on 100K loan
10.26B#	December 21, 2011	Jacobs Trust Amended loan agreement 100K loan
10.26C+&+	January 31, 2014	Jacobs Trust $100,000 Second Restated Promissory Note Rev 01272014
10.27*	October 4, 2010	Amendment To Julie E. Jacobs Trust $100,000 Loan Agreement
10.28*	January 11, 2011	Joseph Albert $100,000 Convertible Promissory Note
10.29*	January 11, 2011	Joseph Albert $100,000 Convertible Promissory Note Extension Agreement
10.29B&&&	June 8, 2012	Joseph Albert Note Conversion Agreement
10.30*		Joseph Albert 50,000 Common Stock Purchase Warrants
10.30A*		Joseph Albert 100,000 Common Stock Purchase Warrants
10.30B&&&	June 8, 2012	Joseph Albert 150,000 Common Stock purchase Warrants
10.31*	October 5, 2010	Standard Energy Company $100,000 Loan Agreement and Promissory Note
10.31A#	December 21, 2011	Standard Energy Note Conversion Agreement
10.31B##	February 1, 2012	Addendum to Note Conversion Agreements with Standard Energy Company
10.32*	October 11, 2010	Doyle Trust $25,000 Promissory Note
10.32A*	October 5, 2010	Doyle Trust $25,000 Loan Agreement
10.32B##	February 1, 2012	Addendum to Note Conversion Agreements with The Walter J. Doyle Trust
10.32C&&	December 21, 2011	Doyle Trust Note Conversion Agreement 25K
10.33*	November 12, 2010	Walter J. Doyle Trust and Julie E. Jacobs Trust Inventory Financing Agreement
10.33A*	November 12, 2010	Jacobs Trust Stock 82.8 Options
10.34*	November 12, 2010	Walter J. Doyle Trust $150,000 Promissory Note
10.34A#	December 21, 2011	Doyle Trust Conversion Agreement 150K
10.34B##	February 1, 2012	Addendum to Note Conversion Agreements with The Walter J. Doyle Trust
10.35*	November 12, 2010	Standard Energy Company $150,000 Promissory Note
10.35A#	December 21, 2011	Standard Energy Note Conversion Agreement 100k
10.35B##	February 1, 2012	Addendum to Note Conversion Agreements with Standard Energy Company
10.36*	February 2, 2011	Robison Note Extension Agreement
10.36A*	July 10, 2010	Robison original promissory note
10.37*	February 2, 2011	Robison $50,000 Convertible Promissory Note
10.37A&&&	June 22, 2012	Robison Note Conversion agreement
10.38*		Robison Common Stock Purchase Warrants for 50,000 shares and 25,000 shares
10.38A&&&	June 22, 2012	Robison Common Stock Purchase Warrants for 75,000 shares
10.39*	February 24, 2011	Carl A. Generes $35,000 Promissory Note
10.40*	July 13, 2009	Lease Modification Agreement
10.40A*	January 18, 2006	Lease Agreement – original
10.40B **	April 10, 2008	First Lease Agreement Amendment
10.40C ***	August 11, 2011	(Second) Lease Modification Agreement
10.41&&	November 16, 2011	Watters Agreement November 2011
10.41A ****	February 9, 2012	Extension to Watters agreement January to March 2012
10.42&&	December 5, 2011	Jeff Paltrow dba Litehouse Capital Contractual Agreement December 2011
10.43&&	December 19, 2012	Cervelle Group marketing Agreement December 2011
10.44****	February 10, 2012	Ertman agreement January to March 2012
10.46+&+	January 31, 2014	Walter Doyle Trust $50,000 Promissory Note 01272014
10.47+&+	January 31, 2014	Julie Jacobs Trust $50,000 Promissory Note 01272014
10.48A@@	September 12, 2014	LFT Manufacturing Operating Agreement
10.48B@@	September 12, 2014	Warrant agreement for consideration with LFT Manufacturing Operating Agreement
10.49@@	August 29, 2014	Letter Agreement Regarding Technology Initiative with Guitammer, San Jose Sharks, Comcast SportsNet Bay area and Comcast SportsNet Ca.
21.1*		List of Subsidiaries of the Registrant

38 Table of Contents

10.32B##		February 1, 2012	Addendum to Note Conversion Agreements with The Walter J. Doyle Trust
31.1 %%	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
10.32C&&		December 21, 2011	Doyle Trust Note Conversion Agreement 25K
31.2 %%	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
10.33*		November 12, 2010	Walter J. Doyle Trust and Julie E. Jacobs Trust Inventory Financing Agreement
32.1 %%	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
10.33A*		November 12, 2010	Jacobs Trust Stock 82.8 Options
32.2 %%	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
10.34*		November 12, 2010	Walter J. Doyle Trust $150,000 Promissory Note
10.34A#		December 21, 2011	Doyle Trust Conversion Agreement 150K
10.34B##		February 1, 2012	Addendum to Note Conversion Agreements with The Walter J. Doyle Trust
10.35*		November 12, 2010	Standard Energy Company $150,000 Promissory Note
10.35A#		December 21, 2011	Standard Energy Note Conversion Agreement 100k
10.35B##		February 1, 2012	Addendum to Note Conversion Agreements with Standard Energy Company
10.36*		February 2, 2011	Robison Note Extension Agreement
10.36A*		July 10, 2010	Robison original promissory note
10.37*		February 2, 2011	Robison $50,000 Convertible Promissory Note
10.37A&&&		June 22, 2012	Robison Note Conversion agreement
10.38*			Robison Common Stock Purchase Warrants for 50,000 shares and 25,000 shares
10.38A&&&		June 22, 2012	Robison Common Stock Purchase Warrants for 75,000 shares
10.39*		February 24, 2011	Carl A. Generes $35,000 Promissory Note
10.40*		July 13, 2009	Lease Modification Agreement
10.40A*		January 18, 2006	Lease Agreement – original
10.40B **		April 10, 2008	First Lease Agreement Amendment
10.40C***		August 11, 2011	(Second) Lease Modification Agreement
10.41&&		November 16, 2011	Watters Agreement November 2011
10.41A ****		February 9, 2012	Extension to Watters agreement January to March 2012
10.42&&		December 5, 2011	Jeff Paltrow dba Litehouse Capital Contractual Agreement December 2011
10.43&&		December 19, 2012	Cervelle Group marketing Agreement December 2011
10.44****		February 10, 2012	Ertman agreement January to March 2012
10.46+&+		January 31, 2014	Walter Doyle Trust $50,000 Promissory Note 01272014
10.47+&+		January 31, 2014	Julie Jacobs Trust $50,000 Promissory Note 01272014
10.48A@@		September 12, 2014	LFT Manufacturing Operating Agreement
10.48B@@		September 12, 2014	Warrant agreement for consideration with LFT Manufacturing Operating Agreement
10.49@@		August 29, 2014	Letter Agreement Regarding Technology Initiative with Guitammer, San Jose Sharks, Comcast SportsNet Bay area and Comcast SportsNet Ca.
21.1*			List of Subsidiaries of the Registrant

31.1 %%		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 %%		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 %%		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 %%		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes- Oxley Act of 2002

* Filed with the SEC on July 8, 2011 as Exhibits to Amendment No. 1 to the Company’s Form 10 Registration Statement and are incorporated herein by reference.

** Filed with the SEC on July 28, 2011 as Exhibits to Amendment No. 2 to the Company’s Form 10 Registration Statement and are incorporated herein by reference.

*** Filed with the SEC on August 12, 2011 as Exhibit to Amendment No. 3 to the Company’s Form 10 Registration Statement and is incorporated herein by reference.

# Filed with the SEC on December 23, 2011 as Exhibits to Form ~~8-K~~8K

## Filed with the SEC on February 2, 2012 as Exhibits to Form ~~8-K~~8K

### Filed with the SEC on February 6, 2012 as Exhibits to Form ~~8-K~~8K

&& Filed with the SEC on April 6, 2012 as Exhibits to Form ~~10-K~~10K

**** Filed with the SEC on May 15, 2012 as Exhibits to Form ~~10-Q~~10Q

&&& Filed with the SEC on August 13, 2012.

+&+ Filed with the SEC on January 31, 2014 as Exhibits to Form 8-K.

-@- Filed with the SEC on March 14, 2014 as Exhibits to Form ~~10-K~~10K

@@ Filed with the SEC on November 14, 2014 as Exhibits to Form ~~10-Q~~10Q

%% Filed with the SEC herewith.

4039 Table of Contents

Signatures

In accordance with Section 13 or 15(d) of the Securities Exchange Act, the Company has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	The Guitammer Company
Date: March 13, 2015	By:	/s/ Mark A. Luden
Date: September 19, 2016	By:	/s/ Mark A. Luden
	Name:	Mark A. Luden
		Mark A. Luden
	Title:	President and CEO
		President and CEO

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Signature Capacity /s/ Mark A. Luden Director, Chairman of the Board, Mark A. Luden President and Chief Executive Officer ~~(Principal Executive Officer)~~ /s/ Kenneth McCaw Director Kenneth McCaw ~~/s/ Richard E. Conn Chief Financial Officer Richard E. Conn (Principal Financial and Principal Accounting Officer)~~

4140

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders ofofThe Guitammer Company

We have audited the accompanying consolidated balance sheets of The Guitammer Company (the Company) as of December 31, 2015 and 2014, and the related consolidated statements of operations, changes in stockholders’ deficit, and cash flows for each of the years in the two-year period ended December 31, 2015 and 2014. The Guitammer Company’s management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We ~~have~~conducted ~~audited~~our ~~the~~audits ~~accompanying~~in ~~consolidated~~accordance ~~balance~~with ~~sheets~~the standards of ~~The~~the ~~Guitammer~~Public Company Accounting Oversight Board (~~the~~United ~~Company~~States). asThose ofstandards ~~December~~require ~~31,~~that ~~2014~~we ~~and~~plan ~~2013,~~ and perform the ~~related~~audit ~~consolidated~~to obtain reasonable assurance about whether the financial statements are free of ~~operations~~material misstatement. The company is not required to have, ~~changes~~nor ~~in stockholders’~~were ~~deficit~~we engaged to perform, ~~and~~an ~~cash~~audit ~~flows~~of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for ~~each~~designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the ~~years~~effectiveness inof the ~~two-year~~company’s ~~period~~internal ~~ended~~control ~~December~~over 31financial reporting. Accordingly, ~~2014~~we ~~and~~express ~~2013~~no such opinion. ~~The~~An ~~Guitammer~~audit ~~Company’s~~also ~~management~~includes isexamining, ~~responsible~~on ~~for~~a ~~these~~test ~~consolidated~~basis, evidence supporting the amounts and disclosures in the financial statements., ~~Our~~assessing ~~responsibility~~the isaccounting toprinciples ~~express~~used anand ~~opinion~~significant onestimates ~~these~~made ~~consolidated~~by management, as well as evaluating the overall financial ~~statements~~statement ~~based~~presentation. onWe believe that our audits provide a reasonable basis for our opinion.

WeIn ~~conducted~~ our ~~audits~~opinion, ~~in accordance with~~ the ~~standards~~consolidated offinancial ~~the~~statements ~~Public~~referred ~~Company~~to ~~Accounting~~above ~~Oversight~~present ~~Board~~fairly, ~~(United~~in ~~States).~~all ~~Those~~material ~~standards~~respects, ~~require that we plan and perform~~ the ~~audit to obtain reasonable assurance about whether the consolidated~~ financial ~~statements~~position ~~are free~~ of ~~material misstatement.~~ The Guitammer Company isas ~~not~~of ~~required~~December ~~to have~~31, ~~nor~~2015 ~~were~~and we2014 ~~engaged~~and tothe ~~perform,~~results ~~an audit~~ of its ~~internal~~operations ~~control~~and ~~over~~its ~~financial~~cash ~~reporting.~~flows ~~Our audit included consideration of internal control over financial reporting as a basis~~ for ~~designing~~each ~~audit procedures that are appropriate in the circumstances, but not for the purpose~~ of ~~expressing an opinion on~~ the ~~effectiveness~~years ofin the ~~Company’s~~two-year ~~internal~~period ~~control~~ended ~~over~~December ~~financial reporting. Accordingly~~31, we2015 ~~express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts~~ and ~~disclosures~~2014 in ~~the~~conformity ~~consolidated~~with ~~financial statements, assessing the~~ accounting principles ~~used~~generally ~~and~~accepted ~~significant~~in ~~estimates made by management, as well as evaluating~~ the ~~overall~~United ~~financial~~States ~~statement~~of ~~presentation~~America. ~~We believe that our audits provide a reasonable basis for our opinion.~~

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of The Guitammer Company as of December 31, 2014 and 2013 and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2014 and 2013 in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

/s/ Schneider Downs & Co., Inc.

Columbus, Ohio

~~March~~September 1319, ~~2015~~2016

F-1 Table of Contents

THE GUITAMMER COMPANY

CONSOLIDATED BALANCE SHEETS

	December 31,			December 31,
	2014			2013
	2015			2014
ASSETS
Current assets
Cash and cash equivalents	$	1612,~~185~~305		$	~~140~~16,~~231~~185
Accounts receivable, net		25103,~~139~~123			6225,~~505~~139
Inventory		~~361~~137,~~223~~888			~~443~~361,~~761~~223
Prepaid expenses and other current assets		131			~~6,141~~131
Total current assets		~~402~~253,~~678~~447			~~652~~402,~~638~~678
Property and equipment, net		6435,~~173~~952			~~127~~64,~~186~~173
Deferred financing costs, net		~~25,066~~-			3825,~~335~~066
Other assets		2925,~~729~~666			2129,~~472~~729
Total Assets	$	521,646		$	839,631
Investment in joint venture		23,185			-
Total Assets	$	338,250		$	521,646
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Line of credit	$	39,523		$	39,523
Accounts payable		~~853~~913,~~933~~755			~~533~~853,~~438~~933
Accrued expenses		~~366~~506,~~938~~480			~~376~~366,~~188~~938
Deferred revenue		3623,~~899~~310			6836,~~823~~899
Current portion of long-term debt - related parties		~~604~~954,~~529~~476			~~584~~604,~~352~~529
Current portion of long-term debt - non-related parties		~~795~~721,~~630~~445			~~559~~795,~~987~~630
Total current liabilities	$	23,~~697~~158,~~452~~989		$	2,~~162~~697,~~311~~452
Long-term debt, net of current portion - related parties		~~340,229~~-			~~250~~340,~~000~~229
Long-term debt, net of current portion - non related parties		-			~~302,479~~-
Total Liabilites	$	3,~~037~~158,~~681~~989		$	23,~~714~~037,~~790~~681
Commitments		-			-
Stockholders' deficit
Common stock, par value of $.001, 150,000,000 shares authorized; 83,000,498 and 77,905,248 shares
Common stock, par value of $.001, 200,000,000 shares authorized; 83,343,057 and 83,000,498 shares issued and outstanding at December 31, 2015 and December 2014, respectively		83,343			83,001
issued and outstanding at December 31, 2014 and December 31, 2013, respectively		83,001			77,906
Preferred stock, par value of $.001, 1,000,000 shares authorized; 50,000 and 0 shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively		50			-
Additional paid-in capital		78,~~985~~783,~~860~~391			7,~~253~~985,~~730~~860
Accumulated deficit		(1011,~~584~~687,~~896~~523	)		(910,~~206~~584,~~795~~896	)
Total Stockholders' deficit	$	(2,~~516~~820,~~035~~739	)	$	(12,~~875~~516,~~159~~035	)
Total Liabilities and Stockholders' deficit	$	~~521~~338,~~646~~250		$	~~839~~521,~~631~~646

See accompanying Notes to Consolidated Financial Statements.

F-2 Table of Contents

THE GUITAMMER COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended December 31,
	2014			2013
	2015			2014
Total revenue	$	1,~~051~~577,~~019~~672		$	1,~~917~~051,~~300~~019
Cost of goods sold		~~605~~848,~~934~~442			1605,~~106,269~~934
Gross profit		~~445~~729,~~085~~230			~~811~~445,~~031~~085
Operating expenses
General and administrative		1,~~579~~483,~~507~~866			1,~~727~~579,~~180~~507
Research and development		227,~~570~~382			~~197~~22,~~006~~570
		1,602,077			1,924,186
	$	1,491,248		$	1,602,077
Loss from operations	$	(1762,~~156,992~~018	)	$	(1,~~113~~156,~~155~~992	)
Other income (expense)
Interest expense		(221,129	)		(193,776	)
Investment income from joint venture		23,185			-
Interest income		20			68
Impairment of investment in joint venture		(93,500	)		-
		(221,109	)		(193,708	)
Net Interest expense		(270,294	)		(221,109	)
Loss before provision for income taxes		(1,378,101	)		(1,306,863	)
	$	(340,609	)	$	(221,109	)
Loss before provision for income taxes	$	(1,102,627	)	$	(1,378,101	)
Provision for income taxes		-			-
Net loss attributable to common stockholders	$	(1,378,101	)	$	(1,306,863	)
Loss before dividends on preferred stock	$	(1,102,627	)	$	(1,378,101	)
Basic and diluted loss per share	$	(0.02	)	$	(0.02	)
Dividends - preferred stock		-			-
Basic and diluted weighted average common shares outstanding		79,562,108			73,712,472
Net loss available to common stockholders		(1,102,627	)		(1,378,101	)
Basic and diluted loss per common share	$	(0.01	)	$	(0.02	)
Basic and diluted weighted average common shares outstanding		83,080,224			79,562,108

See accompanying Notes to Consolidated Financial Statements.

F-3 Table of Contents

THE GUITAMMER COMPANY

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT

YEARS ENDED DECEMBER 31, ~~2014~~2015 and ~~2013~~2014

							~~Additional~~						Additional
	Common Stock	~~Common Stock~~				Preferred Stock	~~Paid-in~~			~~Accumulated~~			Paid-in				Accumulated
	Shares	~~Shares~~	Amount	~~Amount~~		Shares	~~Capital~~		Amount	~~Deficit~~			Capital	~~Total~~			Deficit			Total
Balance, January 1, 2013		68,779,482		$	68,780		$	5,641,492		$	(7,899,932	)		$	(2,189,660	)
Balance, January 1, 2014		77,905,248	$	77,906			-		$	-			$	7,253,730			$	(9,206,795	)	$	(1,875,159	)
Common stock and warrants issued to retire accrued interest		82,604			82			20,569			-				20,651
Warrants issued for debt issuance and to revise debt agreements to include accrued interest		-		-			-			-				32,208				-			32,208
Employee stock option compensation		-		-	-		-	~~153,455~~		-	-			203,567	~~153,455~~			-			203,567
Common stock and warrants issued for services		~~949~~687,500		687	~~950~~		-	~~183,821~~		-	-			89,675	~~184,771~~			-			90,362
Options/warrants exercised for common stock purchase		~~906~~4,~~162~~407,750		4,408	~~906~~		-	~~11,581~~		-	-			406,680	~~12,487~~			-			411,088
Common stock and warrants issuance		7,187,500			7,188			1,242,812			-				1,250,000
Net loss		-		-			-			-				-			$	(1,378,101	)	$	(1,378,101	)
Net loss		-			-			-			(1,306,863	)			(1,306,863	)
Balance, December 31, 2014		83,000,498	$	83,001			-		$	-			$	7,985,860			$	(10,584,896	)	$	(2,516,035	)
Balance, December 31, 2013		77,905,248		$	77,906		$	7,253,730		$	(9,206,795	)		$	(1,875,159	)
Employee stock option compensation		-		-			-			-				195,923				-			195,923
Warrants issued for debt issuance and to revise debt agreements to include accrued interest		-			-			32,208			-				32,208
Common stock issued for services		100,000		100			-			-				8,400				-			8,500
Employee stock option compensation		-			-			203,567			-				203,567
Common stock issued for Preferred Stck Dividends		242,559		242										(242	)						-
Common stock and warrants issued for services		687,500			687			89,675			-				90,362
Warrants earned in connection with joint venture		-		-			-			-				93,500				-			93,500
Options/warrants exercised for common stock purchase		4,407,750			4,408			406,680			-				411,088
Preferred stock issuance		-		-			50,000			50				499,950				-			500,000
Net loss		-			-			-		$	(1,378,101	)			(1,378,101	)
Dividends - preferred stock		-		-			-			-				-				-			-
Balance, December 31, 2014		83,000,498		$	83,001		$	7,985,860		$	(10,584,896	)		$	(2,516,035	)
Net loss before divendends on preferred stock		-		-			-			-				-			$	(1,102,627	)	$	(1,102,627	)
Balance, December 31, 2015		83,343,057	$	83,343			50,000		$	50			$	8,783,391			$	(11,687,523	)	$	(2,820,739	)

See accompanying Notes to Consolidated Financial Statements.

F-4 Table of Contents

THE GUITAMMER COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year ended December 31,
	For the Year EndedDecember 31,
	2014			2013
	2015			2014
Cash flows from operating activities
Net loss	$	(1,378,101	)	$	(1,306,863	)
Net loss before dividends on preferred stock	$	(1,102,627	)	$	(1,378,101	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and patent amortization		4636,~~334~~175			3146,~~623~~334
Amortization of deferred financing fees		2625,~~733~~066			2026,~~001~~733
Amortization of debt discount		89,~~974~~717			-8,974
Employee stock options		~~203~~195,~~567~~923			~~153~~203,~~455~~567
Stock and warrants issued for services		908,~~362~~500			~~184~~90,~~771~~362
Loss on sale of assets		1,647			-
Investment income from joint venture		(23,185	)		-
Change in fair value of warrant liability		(109,926	)		(20,441	)
Impairment of investment in joint venture		93,500			-
Loss on sale of assets		-			1,647
Change in fair value of warrant liability	$	(43,217	)	$	(109,926	)
Changes in assets and liabilities
Accounts receivable		37(77,~~366~~984	)		~~(41~~37,~~494~~366	)
Inventory, net		82223,~~538~~335			~~185~~82,~~490~~538
Prepaid expenses		~~6,010~~-			~~125~~6,~~498~~010
Accounts payable and accrued expenses		~~440~~242,~~248~~581			~~(250~~440,~~901~~248	)
Deferred revenue		(3113,~~924~~589	)		(6031,~~562~~924	)
Net cash used in operating activities	$	(~~576~~425,~~172~~805	)	$	(~~979~~576,~~423~~172	)
Cash flows from investing activities
Purchase of intangible assets		(163,~~552~~890	)		-(16,552	)
Proceeds on sale of property and equipment		~~38,249~~-			-38,249
Purchase of property and equipment		~~(14,921~~-	)		(~~139~~14,~~293~~921	)
Net cash provided by (used in) investing activities		6,776			(139,293	)
Net cash (used in) provided by investing activities	$	(3,890	)	$	6,776
Cash flows from financing activities
Proceeds from stock and warrants		-			1,250,000
Proceeds from options and warrants exercised		-			411,088
Proceeds from options and warrants exercised		411,088			12,487
Proceeds from private offering of preferred stock		500,000			-
Proceeds from debt		~~100,000~~-			-100,000
Payment of debt		(6574,~~738~~185	)		(8265,~~676~~738	)
Net cash provided by financing activities	$	~~445~~425,~~350~~815		$	1445,~~179,811~~350
Net (decrease) increase in cash and cash equivalents		(124,046	)		61,095
Net increase (decrease) in cash and cash equivalents		(3,880	)		(124,046	)
Cash and cash equivalents, beginning of period		~~140~~16,~~231~~185			79140,~~136~~231
Cash and cash equivalents, end of period	$	1612,~~185~~305		$	~~140~~16,~~231~~185
Supplemental disclosure of cash flow information
Cash paid during the period for
Interest	$	9290,~~344~~495		$	~~176~~92,~~734~~344
Income taxes	$	-		$	-
Supplemental disclosure of non-cash investing and financing activities
Issuance of common stock in connection with debt retirement	$	-		$	20,651
Accrued interest converted to debt	$	-		$	20,178
Accrued interest converted to debt	$	20,178		$	-
Warrants earned in connection with joint venture	$	93,500		$	-
Issuance of warrants for debt modification	$	~~13,464~~-		$	-13,464
Issuance of warrants for debt discount	$	~~18,744~~-		$	-18,744

See accompanying Notes to Consolidated Financial Statements.

F-5 Table of Contents

1 -– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

The financial information presented represents The Guitammer Company (the “Company”) originally incorporated on March 6, 1990, under the laws of the State of Ohio, and then re-domiciled to Nevada on May 18, 2011.

In April 2011, the Board of Directors approved a resolution to create a holding company to own 100% of the Ohio Company (“Guitammer-Ohio”). The holding company is incorporated in the State of Nevada and has ~~150~~200 million authorized common shares. Existing shareholders of Guitammer-Ohio received 31,206 shares in the holding company for each share they owned, resulting in a total of 50,001,374 shares of Common Stock, of Guitammer-Nevada evidencing the same proportional interest in Guitammer-Nevada as they held in Guitammer-Ohio. The per share numbers and the per share amounts in the financial statements and the notes to the financial statements reflect the retroactive application of our stock split.

The Company is involved in the design and distribution of a low frequency audio transducer branded as the original ~~ButtKicker®~~ButtKickerÒ products. The Company, headquartered in Ohio, sells products internationally.

Basis of Presentation

All significant inter-company transactions and accounts have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments and other short-term investments with an initial maturity of three months or less to be cash equivalents.

The Company maintains cash and cash equivalent balances at a financial institution that is insured by the Federal Deposit Insurance Corporation, subject to certain limitations.

F-6

Table of Contents

1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Accounts Receivable

Accounts receivable are carried at cost less an allowance for doubtful accounts. The allowance for doubtful accounts is established through provisions charged against income and is maintained at a level believed adequate by management to absorb estimated bad debts based on current economic conditions.

Accounts receivable are uncollateralized customer obligations due under normal trade terms generally requiring payment within 30 days from the invoice date. The Company recorded an allowance of ~~approximately~~$5,073 and $4,~~600~~598 at December 31, ~~2014~~2015 and December 31, ~~2013~~2014, respectively.

F-6

1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Inventory

Inventory, consisting of finished goods, is stated at the lower of cost or market. Cost is determined using the weighted average method. Inventory that is determined to be obsolete or not sellable is expensed immediately. The Company recorded a reserve for obsolete items of $107,~~415~~000 at December 31, ~~2014~~2015 and $10,415 at December 31, ~~2013~~2014.

Property and Equipment, net

Property and equipment are recorded at cost less accumulated depreciation. Expenditures for major additions and improvements are capitalized, while minor replacements, maintenance, and repairs and maintenance are charged to expense as incurred. Leasehold improvements are amortized over the shorter of the assets’ economic lives or the lease term. Depreciation is provided using the straight-line method over the estimated useful lives of the assets as follows:

Equipment and electronics	2 - 7 years
Vehicles	4 years
Furniture and fixtures	7 years
Leasehold improvements	Shorter of lease terms or 7 years

Deferred Financing costs, net

Deferred financing costs are recorded at cost less accumulated amortization. Amortization is provided using the straight-line method over the life of the loan for which the financing costs were incurred.

Impairment of Long-Lived Assets

Long-lived assets to be held and used are reviewed for impairment whenever events or circumstances indicate that the carrying value of such assets may not be recoverable. Determination of recoverability is generally based on an estimate of undiscounted cash flows resulting from the use of the asset and its eventual disposition. If the evaluation indicates that the carrying amount of an asset is not recoverable from our undiscounted cash flows, then an impairment loss is measured by comparing the carrying amount of the asset to its fair value.

F-7

Table of Contents

1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue Recognition

The Company recognizes revenue from the sale of its products when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the fee is fixed and determinable, and collectability is reasonably assured.

Deferred Revenue

The Company received prepayment for products from some of its customers as the Company requires prepayment before goods are shipped to all international customers. As of December 31, ~~2014~~2015 and December 31, ~~2013~~2014, the Company had deferred revenue of $3623,~~899~~310 and $6836,~~823~~899, respectively. The Company recognizes revenue and decreases deferred revenue in accordance with the revenue recognition policy.

Income Taxes

Prior to the creation of the Nevada holding company formed on May 18, 2011, the Company had elected S Corporation status for Federal and Ohio state income tax purposes. Under these elections, the Company’s taxable income was included on the stockholders individual income tax returns, and the Company made no ~~provision for Federal and State income tax. Effective with the Company redomiciling to Nevada on May 18, 2011, the Company elected C Corporation status for both Federal and State income tax purposes.~~

Fprovision for Federal and State income tax. Effective with the Company re-7domiciling to Nevada on May 18, 2011, the Company elected C Corporation status for both Federal and State income tax purposes.

1There -were ~~SUMMARY~~no OFuncertain ~~SIGNIFICANT~~tax ~~ACCOUNTING~~positions ~~POLICIES~~at ~~(continued)~~December 31, 2015 or December 31, 2014, as the Company’s tax positions for open years meet the recognition thresholds of more likely than not to be sustained upon examinations. When necessary, the Company would accrue penalties and interest related to unrecognized tax benefits as a component of income tax expense. Tax returns for the years 2012 through 2014 are currently open to examination. Tax returns prior to 2012 are no longer subject to examination by tax authorities.

There were no uncertain tax positions at December 31, 2014 or December 31, 2013, as the Company’s tax positions for open years meet the recognition thresholds of more likely than not to be sustained upon examinations. When necessary, the Company would accrue penalties and interest related to unrecognized tax benefits as a component of income tax expense. Tax returns for the years 2011 through 2013 are currently open to examination. Tax returns prior to 2011 are no longer subject to examination by tax authorities.

Fair Value of Financial Instruments

The Company measures and discloses the estimated fair value of financial assets and liabilities using the fair value hierarchy prescribed by U.S. generally accepted accounting principles. The fair value hierarchy has three levels, which are based on reliable available inputs of observable data. The hierarchy requires the use of observable market data when available. The levels are defined as follows:

Level 1 – quoted prices for identical instruments in active markets;

Level 2 – quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations in which significant inputs and significant value drivers are observable in active markets; and

Level 3 – fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

~~The carrying amount reported in the balance sheets for cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value because of the immediate or short~~F-~~term~~8 ~~maturity~~Table of these financial instruments. The fair value of the long term debt and revolving line of credit at December 31, 2014 and December 31, 2013 approximated the carrying amount based on interest rates that were close to market rates or being close to maturity and were determined on a Level 2 measurement.Contents

The Black-Scholes valuation model is used to estimate the fair value of the warrants. The significant assumptions considered by the model were the remaining term of the warrants, the fair value per share stock price of $.07 and $.17, a risk free treasury rate for .5 years and 1.5 ~~years~~– ofSUMMARY ~~.12%~~OF ~~and~~SIGNIFICANT ~~.26%~~ACCOUNTING atPOLICIES December 31, 2014 and December 31, 2013, respectively and an expected volatility of 60%. At December 31, 2014 and December 31, 2013, the fair value of warrants were determined on a Level 2 measurement.(continued)

The carrying amount reported in the balance sheets for cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value because of the immediate or short-term maturity of these financial instruments. The fair value of the long term debt and revolving line of credit at December 31, 2015 and December 31, 2014 approximated the carrying amount based on interest rates that were close to market rates or being close to maturity and were determined on a Level 2 measurement.

The Black-Scholes valuation model is used to estimate the fair value of the warrants. The significant assumptions considered by the model were the remaining term of the warrants, the fair value per share stock price of $.03 and $.07, a risk free treasury rate for .55 to 1.67 years of .498% to .923% and .50 to 2.75 years of .120% to .993% and an expected volatility of 62% and 60% at December 31, 2015 and December 31, 2014, respectively. At December 31, 2015 and December 31, 2014, the fair value of warrants were determined on a Level 2 measurement.

Advertising

Costs of advertising and marketing are expensed as incurred including the cost of making commercials. Advertising and marketing costs were $~~153~~112,~~064~~202 and $~~239~~153,~~521~~064 for the years ending December 31, ~~2014~~2015 and ~~2013~~2014, respectively.

F-8

1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Shipping and Handling

Shipping and handling costs of approximately $~~113~~95,~~262~~419 and $~~124~~91,~~204~~506 for the years ending December 31, ~~2014~~2015 and ~~2013~~2014, respectively, are included in general and administrative expenses in the statements of operations.

Research and development costs

The costs of research and development activities are expensed when incurred.

Earnings (Loss) Per Share of Common Stock

Earnings (loss) per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share (EPS) include additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants. Common stock equivalents were not included in the computation of diluted earnings per share when the Company reported a loss because to do so would be antidilutive for periods presented. Anti-dilutive securities not included in net loss per share calculations for the years presented include:

	December 31,		December 31,
	2014		2013
	2015		2014
Potentially dilutive securities:
Outstanding time-based stock options		4443,~~211~~462,~~505~~561		4044,~~761~~211,505
Outstanding time-based warrants		1510,~~000~~944,~~908~~112		1815,~~154~~000,~~428~~908
Joint venture warrants earned to be issued		2,750,000		-
Convertible preferred stock		3,333,500		-

F-9

Table of Contents

1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Stock Based Compensation

Share-based compensation is measured as the fair value of the award at its grant date based on the estimated number of awards that are expected to vest and is recorded over a defined service period. Compensation expense is recognized based on the estimated grant date fair value method using a Black-Scholes valuation model. It is the Company’s policy to recognize expense using the straight-line method over the vesting period.

For a discussion of critical accounting policies and estimates, please see Note 1 to our consolidated financial statements, which are included in this report.

Recently Issued Accounting Standards

In ~~July~~May, ~~2013~~2014, the FASB issued Accounting Standards Update ~~2013~~2014-1109, ~~Income~~Revenue ~~Taxes~~from Contracts with Customers (Topic ~~740~~606): ~~Presentation~~Summary of- anThe ~~Unrecognized~~FASB ~~Tax~~has ~~Benefit~~made ~~When~~available aAccounting ~~Net~~Standards ~~Operating~~Update ~~Loss~~(ASU) ~~Carryforward~~No. 2014-09, aRevenue ~~Similar~~from ~~Tax~~Contracts ~~Loss,~~with orCustomers: aTopic ~~Tax~~606. ~~Credit~~ASU ~~Carryforward~~2014-09 ~~Exists~~affects ~~Summary.~~any entity using U.S. GAAP ~~does~~that ~~not~~either ~~include~~enters ~~explicit~~into ~~guidance~~contracts onwith ~~the~~customers ~~financial~~to ~~statement~~transfer ~~presentation~~goods ofor anservices ~~unrecognized tax benefit when a net operating loss carryforward, a similar tax loss,~~ or aenters ~~tax~~into ~~credit~~contracts ~~carryforward~~for ~~exists.~~the ~~The~~transfer ~~amendments~~of innonfinancial ~~this~~assets ~~ASU~~unless ~~state~~those ~~that~~contracts anare ~~unrecognized~~within ~~tax~~the ~~benefit,~~scope ~~or a portion~~ of another ~~unrecognized~~standards ~~tax benefit~~(e.g., ~~should~~insurance becontracts ~~presented~~or inlease ~~the~~contracts). ~~financial~~This ~~statements~~ASU aswill asupersede ~~reduction~~the torevenue arecognition ~~deferred~~requirements ~~tax~~in ~~asset~~Topic ~~for a net operating loss carryforward~~605, aRevenue ~~similar tax loss~~Recognition, orand amost ~~tax~~industry-specific ~~credit carryforward, except as follows~~guidance. ToThis ~~the~~ASU ~~extent~~also asupersedes ~~net~~some ~~operating~~cost ~~loss~~guidance ~~carryforward,~~included ain ~~similar~~Subtopic ~~tax loss~~605-35, orRevenue aRecognition-Construction-Type ~~tax~~and ~~credit~~Production-Type ~~carryforward~~Contracts. isIn ~~not~~addition, ~~available at~~ the ~~reporting~~existing ~~date~~requirements ~~under~~for the ~~tax~~recognition ~~law~~ of ~~the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of~~ a ~~tax~~gain ~~position~~ or ~~the~~loss ~~tax~~on ~~law of~~ the ~~applicable~~transfer ~~jurisdiction~~of ~~does~~nonfinancial ~~not~~assets ~~require~~that ~~the~~are ~~entity to use, and the entity does~~ not ~~intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented~~ in ~~the financial statements as~~ a ~~liability~~contract ~~and should not be combined~~ with ~~deferred~~a ~~tax~~customer ~~assets~~(e.g., ~~This~~assets ~~ASU~~within ~~applies~~the toscope ~~all~~of ~~entities~~Topic ~~that~~360, ~~have~~Property, ~~unrecognized tax benefits when a net operating loss carryforward~~Plant, aand ~~similar tax loss~~Equipment, orand aintangible ~~tax~~assets ~~credit~~within ~~carryforward exists at~~ the ~~reporting~~scope ~~date.~~of ~~The~~Topic ~~amendments~~350, inIntangibles-Goodwill ~~this~~and ~~ASU~~Other) are ~~effective~~amended ~~for~~to ~~fiscal~~be ~~years,~~consistent ~~and~~with ~~interim~~the ~~periods~~guidance ~~within~~on ~~those~~recognition ~~years,~~and ~~beginning~~measurement ~~after~~(including ~~December~~the ~~15,~~constraint ~~2013.~~on ~~The~~revenue) ~~adoption~~in of this ~~standard did not have a material impact on the Company’s consolidated financial statements or required disclosures~~ASU.

~~F-9~~The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: .

1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

In May, 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) Summary - The FASB has made available Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers: Topic 606. ASU 2014-09 affects any entity using U.S. GAAP that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (e.g., assets within the scope of Topic 360, Property, Plant, and Equipment, and intangible assets within the scope of Topic 350, Intangibles-Goodwill and Other) are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this ASU. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps:

Step 1: Identify the contract(s) with a customer.

Step 2: Identify the performance obligations in the contract.

Step 3: Determine the transaction price.

Step 4: Allocate the transaction price to the performance obligations in the contract.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

For a public entity, the amendments in this ASU are effective for annual reporting periods beginning after December 15, ~~2016~~2017, including interim periods within that reporting period. Early application is not permitted. We are currently assessing the impact this standard will have on the Company’s consolidated financial statements or required disclosures.

F-10 Table of Contents

1 -– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

In June, 2014, the FASB issued Accounting Standards Update No. 2014-12, Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. The issue is the result of a consensus of the FASB Emerging Issues Task Force (EITF). The amendments in the ASU require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718, Compensation - Stock Compensation, as it relates to awards with performance conditions that affect vesting to account for such awards. The performance target should not be reflected in estimating the grant-date fair value of the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. Entities may apply the amendments in this ASU either: (a) prospectively to all awards granted or modified after the effective date; or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. If retrospective transition is adopted, the cumulative effect of applying this ASU as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at that date. In addition, if retrospective transition is adopted, an entity may use hindsight in measuring and recognizing the compensation cost. We are currently assessing the impact this standard will have on the Company’s consolidated financial statements or required disclosures.

In August, 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. Under Generally Accepted Accounting Principles (GAAP), financial statements are prepared under the presumption that the reporting organization will continue to operate as a going concern, except in limited circumstances. Financial reporting under this presumption is commonly referred to as the going concern basis of accounting. The going concern basis of accounting is critical to financial reporting because it establishes the fundamental basis for measuring and classifying assets and liabilities. Currently, GAAP lacks guidance about management’s responsibility to evaluate whether there is substantial doubt about the organization’s ability to continue as a going concern or to provide related footnote disclosures. This ASU provides guidance to an organization’s management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes. The amendments are effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early application is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. We are currently assessing the impact this standard will have on the Company’s consolidated financial statements or required disclosures.

F-11 Table of Contents

1 -– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

In November, 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity. The amendments in this ASU do not change the current criteria in U.S. GAAP for determining when separation of certain embedded derivative features in a hybrid financial instrument is required. The amendments clarify how current U.S. GAAP should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. Specifically, the amendments clarify that an entity should consider all relevant terms and features, including the embedded derivative feature being evaluated for bifurcation, in evaluating the nature of the host contract. Furthermore, the amendments clarify that no single term or feature would necessarily determine the economic characteristics and risks of the host contract. Rather, the nature of the host contract depends upon the economic characteristics and risks of the entire hybrid financial instrument. The amendments in this ASU also clarify that, in evaluating the nature of a host contract, an entity should assess the substance of the relevant terms and features (i.e., the relative strength of the debt-like or equity-like terms and features given the facts and circumstances) when considering how to weight those terms and features. Specifically, the assessment of the substance of the relevant terms and features should incorporate a consideration of: (1) the characteristics of the terms and features themselves (for example, contingent versus ~~noncontingent~~non-contingent, in-the-money versus out-of-the-money); (2) the circumstances under which the hybrid financial instrument was issued or acquired (e.g., issuer-specific characteristics, such as whether the issuer is thinly capitalized or profitable and well-capitalized); and (3) the potential outcomes of the hybrid financial instrument (e.g., the instrument may be settled by the issuer issuing a fixed number of shares, the instrument may be settled by the issuer transferring a specified amount of cash, or the instrument may remain legal-form equity), as well as the likelihood of those potential outcomes. The amendments in this ASU apply to all entities that are issuers of, or investors in, hybrid financial instruments that are issued in the form of a share. The amendments in this ASU are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. For all other entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2015, and interim periods within fiscal years beginning after December 15, 2016. Early adoption, including adoption in an interim period, is permitted. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The effects of initially adopting the amendments in this ASU should be applied on a modified retrospective basis to existing hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year for which the amendments are effective. Retrospective application is permitted to all relevant prior periods. We are currently assessing the impact this standard will have on the Company’s consolidated financial statements or required disclosures.

2 F-12 ~~GOING~~Table ~~CONCERN~~of Contents

~~The~~1 ~~Company~~– ~~has~~SUMMARY ~~incurred~~OF ~~net~~SIGNIFICANT ~~losses,~~ACCOUNTING ~~negative~~POLICIES cash flows from operating activities, and has an accumulated deficit of approximately $10,585,000 at December 31, 2014. In addition, at December 31, 2014 the Company had a cash balance of approximately $16,000 and working capital deficiency of approximately $2,295,000. The Company has relied upon cash from its financing activities to fund its ongoing operations as it has not been able to generate sufficient cash from its operating activities in the past and there is no assurance it will be able to do so in the future. Unless the Company can obtain additional cash resources, these factors raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.(continued)

FIn April, 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-1203, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. For public business entities, the amendments are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. For all other entities, the amendments are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within fiscal years beginning after December 15, 2016. Early adoption of the amendments is permitted for financial statements that have not been previously issued. The amendments should be applied on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. Upon transition, an entity is required to comply with the applicable disclosures for a change in an accounting principle. These disclosures include the nature of and reason for the change in accounting principle, the transition method, a description of the prior-period information that has been retrospectively adjusted, and the effect of the change on the financial statement line items (i.e., debt issuance cost asset and the debt liability). We are currently assessing the impact this standard will have on the Company’s consolidated financial statements or required disclosures.

2In July of 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-11, ~~GOING~~Inventory ~~CONCERN~~(Topic 330): Simplifying the Measurement of Inventory. Topic 330, Inventory, currently requires an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. The amendments do not apply to inventory that is measured using last-in, first-out (~~continued~~LIFO) or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. An entity should measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments in this Update more closely align the measurement of inventory in GAAP with the measurement of inventory in International Financial Reporting Standards.

In March of 2016, FASB issued Accounting Standards Update (ASU) No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendments are intended to improve the accounting for employee share-based payments and affect all organizations that issue share-based payment awards to their employees.

Several aspects of the accounting for share-based payment award transactions are simplified, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows.

F-13

Table of Contents

1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The amendments also simplify two areas specific to private companies:

1. Practical Expedient for Expected Term: In lieu of estimating the period of time that a share-based award will be outstanding, private companies can now apply a practical expedient to estimate the expected term for all awards with performance or service conditions that have certain characteristics.

2. Intrinsic Value: Private companies can now make a one-time election to switch from measuring all liability-classified awards at fair value to measuring them at intrinsic value. Previously, private companies were provided an option to measure all liability-classified awards at intrinsic value, but some private companies were unaware of that option.

Accounting for employee share-based awards was identified by the Private Company Council (PCC) as an area of concern among private company stakeholders. The PCC worked with the FASB to discuss and analyze the issues that private companies have encountered in this area when applying the standard. The PCC also asked the FASB staff to conduct outreach with users as a part of the FASB’s pre-agenda research on the topic.

The FASB also considered the conclusions in the Financial Accounting Foundation’s Post-Implementation Review Report on Statement 123(R), Share-Based Payment. Though the report concluded that the prior standard achieved its purpose, it noted that certain areas within Statement 123(R) may be costly and difficult to apply.

For public companies, the amendments are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. For private companies, the amendments are effective for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. Early adoption is permitted for any organization in any interim or annual period. We are currently assessing the impact this standard will have on the Company’s consolidated financial statements or required disclosures.

In February of 2016, FASB issued its new lease accounting guidance in Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842).

Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date:

A lease liability, which is a lessee‘s obligation to make lease payments arising from a lease, measured on a discounted basis; and

A right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.

F-14

Table of Contents

1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers.

The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing.

Public business entities should apply the amendments in ASU 2016-02 for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years (i.e., January 1, 2019, for a calendar year entity). Nonpublic business entities should apply the amendments for fiscal years beginning after December 15, 2019 (i.e., January 1, 2020, for a calendar year entity), and interim periods within fiscal years beginning after December 15, 2020. Early application is permitted for all public business entities and all nonpublic business entities upon issuance.

Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach.

For public business entities, the amendments are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. We are currently assessing the impact this standard will have on the Company’s consolidated financial statements or required disclosures.

2 – GOING CONCERN

The Company has incurred net losses, negative cash flows from operating activities, and has an accumulated deficit of approximately $11,687,523 at December 31, 2015. In addition, at December 31, 2015 the Company had a cash balance of approximately $12,300 and working capital deficiency of approximately $2,932,000. The Company has relied upon cash from its financing activities to fund its ongoing operations as it has not been able to generate sufficient cash from its operating activities in the past and there is no assurance it will be able to do so in the future. Unless the Company can obtain additional cash resources, these factors raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

The Company needs additional capital to fund current working capital requirements, ongoing debt service and to repay its obligations that are maturing over the upcoming twelve month period. Management plans to increase revenues and to control operating expenses in order to reduce losses from operations. Additionally, the Company will continue to seek equity and/or debt financing in order to enable the Company to meet its financial obligations until it achieves profitability. The Company may not be able to obtain this additional financing on acceptable terms or at all.

3 F-15 ~~PROPERTY~~Table ~~AND~~of ~~EQUIPMENT, NET~~Contents

	December 31,			December 31,
	2014			2013
Equipment and electronics	$	175,876		$	179,659
Vehicles		-			35,043
Furniture and fixtures		20,257			20,257
Leasehold improvements		12,313			12,313
		208,446			247,272
Less accumulated depreciation		(144,273	)		(120,086	)
Property and equipment, net	$	64,173		$	127,186

3 – PROPERTY AND EQUIPMENT, NET

Depreciation expense for the years ended December 31, 2014 and 2013 was $38,039 and $24,315, respectively.

	December 31,			December 31,
	2015			2014
Equipment and electronics	$	175,876		$	175,876
Furniture and fixtures		20,257			20,257
Leasehold improvements		12,313			12,313
		208,446			208,446

Less accumulated depreciation		(172,494	)		(144,273	)
Property and equipment, net	$	35,952		$	64,173

4Depreciation -expense ~~DEFERRED~~for ~~FINANCING~~the ~~COSTS~~years ended December 31, ~~NET~~2015 and 2014 was $28,221 and $38,039 respectively.

	December 31,			December 31,
	2014			2013
Deferred financing costs	$	153,454		$	139,990
Less Accumulated Amortization		(128,388	)		(101,655	)
Deferred financing costs, net	$	25,066		$	38,335

4 – DEFERRED FINANCING COSTS, NET

F-13

	December 31,			December 31,
	2015			2014
Deferred financing costs	$	153,454		$	153,454
Less Accumulated Amortization		(153,454	)		(128,388	)
Deferred financing costs, net	$	-		$	25,066

4Amortization -expense ~~DEFERRED~~for ~~FINANCING~~deferred ~~COSTS~~financing costs for the years ended December 31, ~~NET~~2015 ~~(continued)~~and 2014 was $25,066 and $26,733, respectively. In January 2014, the notes payable to Forest Capital for $150,000 and the Julie Jacobs Trust for $100,000 were modified extending the maturity date by two years and the unpaid interest on each of these notes was added to the loan balance. As an inducement to extend the notes term and add the interest due and unpaid interest to the notes balance, the Company issued 324,000 warrants to Forest Capital and 216,000 warrants to the Julie Jacobs Trust. The cost of the warrants was valued at $13,464 using the Black Scholes valuation model and was added to deferred financing costs and was amortized over the remaining life of the loan.

~~Amortization~~F-16 ~~expense~~Table for deferred financing costs was $26,733 and $20,001 for the years ended December 31, 2014 and 2013 respectively. In January 2014, the notes payable to Forest Capital for $150,000 and the Julie Jacobs Trust for $100,000 were modified extending the maturity date by two years and the unpaid interest on each of these notes was added to the loan balance. As an inducement to extend the notes term and add the interest due and unpaid interest to the notes balance, the Company issued 324,000 warrants to Forest Capital and 216,000 warrants to the Julie Jacobs Trust. The cost of the warrants was valued at $13,464 using the Black Scholes valuation model and was added to deferred financing costs which will be amortized over the remaining life of the loan.Contents

5 -– LINE OF CREDIT

The Company has entered into an unsecured line of credit arrangement with Key Bank, which carries a maximum possible loan balance of $40,000 at an annual interest rate of 6.25% and is due on demand. As of December 31, ~~2014~~2015 and December 31, ~~2013~~2014, the Company had borrowed $39,523.

6 -– ACCRUED EXPENSES

Accrued expenses consisted of the following at December 31, ~~2014~~2015 and December 31, ~~2013~~2014:

	December 31,		December 31,
	2014		2013
	2015			2014
Accrued payroll	$	4766,~~379~~825	$	947,~~471~~379
Accrued interest		~~233~~383,~~308~~201		~~160~~233,~~398~~308
Warrant liability		496,~~404~~187		~~159~~49,~~330~~404
Miscellaneous accrued expenses		3650,~~847~~627		4636,~~989~~847
	$	~~366~~506,~~938~~480	$	~~376~~366,~~188~~938

As more fully described in footnote 8, the Company has recorded a warrant liability of $496,~~404~~187 and $~~159~~49,~~330~~404 as of December 31, ~~2014~~2015 and December 31, ~~2013~~2014, respectively, which is based on the Black-Scholes valuation model to estimate the fair value of the warrants. The significant assumptions considered by the model were the remaining term of the warrants, the fair value per share stock price of $.0703 and $.1707, a risk free treasury rate for .555 ~~years~~to ~~and~~ 1.567 years of .12498% ~~and~~to .26923% atand ~~December~~.50 ~~31,~~to ~~2014~~2.75 ~~and~~years ~~December~~of ~~31,~~.120% ~~2013,~~to ~~respectively~~.993% and an expected volatility of 62% and 60% at December 31, 2015 and December 31, 2014, respectively.

F-1417 Table of Contents

7 -– DEBT

Debt payable to related parties is as follows:

	December 31,	~~December 31,~~	December 31,	~~December 31,~~
		2014		2013
	2015		2014
Note payable to Julie E. Jacobs Trust, a stockholder, in the amount of $50,000 with interest on the unpaid principal balance computed from the date of this loan until paid in full at the rate equal to the Wall Street Journal Prime Rate plus 4.75%, (which is 8% as of the date of the loan and at 12/31/2014) with interest payable annually on January 3rd and with the principal balance due on January 3, 2016. As an inducement to make this loan, the Company issued 400,000 warrants to purchase stock at $.24 per share which were valued at $9,372 using the Black Scholes valuation model and were recorded as a loan discount. The discount is being amortized over the life of the loan and the amortization expense for the year ended December 31, 2014 was approximately $4,500.	$	45,114	$	-
Note payable to Julie E. Jacobs Trust, a stockholder, in the amount of $50,000 with interest on the unpaid principal balance computed from the date of this loan until paid in full at the rate equal to the Wall Street Journal Prime Rate plus 4.75%, (which is 8% as of the date of the loan and at 12/31/2015) with interest payable annually on January 3rd and with the principal balance due on January 3, 2016. As an inducement to make this loan, the Company issued 400,000 warrants to purchase stock at $.24 per share which were valued at $9,372 using the Black Scholes valuation model and were recorded as a loan discount. The discount is being amortized over the life of the loan and the amortization expense for the year ended December 31, 2015 was approximately $4,858 and now is considered due on demand.		49,973		45,114
Note payable to The Walter Doyle Trust, a stockholder, in the amount of $50,000 with interest on the unpaid principal balance computed from the date of this loan until paid in full at the rate equal to the Wall Street Journal Prime Rate plus 4.75%, (which is 8% as of the date of the loan and at 12/31/2014) with interest payable annually on January 3rd and with the principal balance due on January 3, 2016. As an inducement to make this loan, the Company issued 400,000 warrants to purchase stock at $.24 per share which were valued at $9,372 using the Black Scholes valuation model and were recorded as a loan discount. The discount is being amortized over the life of the loan and the amortization expense for the year ended December 31, 2014 was approximately $4,500.		45,114		-
Note payable to The Walter Doyle Trust, a stockholder, in the amount of $50,000 with interest on the unpaid principal balance computed from the date of this loan until paid in full at the rate equal to the Wall Street Journal Prime Rate plus 4.75%, (which is 8% as of the date of the loan and at 12/31/2015) with interest payable annually on January 3rd and with the principal balance due on January 3, 2016. As an inducement to make this loan, the Company issued 400,000 warrants to purchase stock at $.24 per share which were valued at $9,372 using the Black Scholes valuation model and were recorded as a loan discount. The discount is being amortized over the life of the loan and the amortization expense for the 12 months ended December 31, 2015 was approximately $4,858.and now is considered due on demand.		49,973	$	45,114
Note payable to Forest Capital, an affiliate of the Walter J. Doyle Trust, a stockholder, in the original amount of $250,000 at an annual interest rate of 10%. Effective December 13, 2009, the annual interest rate increased to 20%. On December 21, 2011, $100,000 of the note was converted to shares of stock at a price of $.25 per share and the note was amended decreasing the annual interest rate to 8% with interest payable annually on January 3rd and with the principal balance due on January 3, 2014. The note was extended on January 27, 2014 to January 3, 2016 and the $12,107 in interest due at January 3, 2014 was included in the new note balance of $162,107. The $12,107 addition to the loan is payable to Forest Capital upon the receipt by the Company of new equity funding of $100,000 or more. Since more than $100,000 of equity funding has been received, the $12,107 is now payable to Forest Capital and has been included in the current portion of related party debt. In connection with the note extension, 324,000 warrants to purchase stock at $0.24 per share were issued in return for the agreement to extend the note to January 3, 2016.	$	162,107	$	150,000
Note payable to Forest Capital, an affiliate of the Walter J. Doyle Trust, a stockholder, in the original amount of $250,000 at an annual interest rate of 10%. Effective December 13, 2009, the annual interest rate increased to 20%. On December 21, 2011, $100,000 of the note was converted to shares of stock at a price of $.25 per share and the note was amended decreasing the annual interest rate to 8% with interest payable annually on January 3rd and with the principal balance due on January 3, 2014. The note was extended on January 27, 2014 to January 3, 2016 and the $12,107 in interest due at January 3, 2014 was included in the new note balance of $162,107. The $12,107 addition to the loan is payable to Forest Capital upon the receipt by the Company of new equity funding of $100,000 or more. Since more than $100,000 of equity funding has been received, the $12,107 is now payable to Forest Capital and has been included in the current portion of related party debt. In connection with the note extension, 324,000 warrants to purchase stock at $0.24 per share were issued in return for the agreement to extend the note to January 3, 2016 and now is considered due on demand.		162,107		162,107
Note payable to Julie E. Jacobs Trust (JJ Trust) in the original amount of $100,000 at an annual interest rate of 20%. Effective September 26, 2010, the annual interest rate increased to 30% with the note payable on demand. On December 21, 2011, note was amended decreasing the annual interest rate to 8% with interest payable annually on January 3rd and with the principal balance due on January 3, 2014. The note was extended on January 27, 2014 to January 3, 2016 and the $8,071 in interest due at January 3, 2014 was included in the new note balance of $108,071. The $8,071 addition to the loan is payable to the JJ Trust upon the receipt by the Company of new equity funding of $100,000 or more. Since more than $100,000 of equity funding has been received, the $8,071 is now payable to the JJ Trust and has been included in the current portion of related party debt. In connection with the note extension 216,000 warrants to purchase stock at $0.24 per share were issued in return for the agreement to extend the note to January 3, 2016 and now is considered due on demand.		108,071		108,071
Note payable to Thelma Gault, a stockholder, in the original amount of $800,000 at an interest rate of 10%. The loan is collateralized by all assets of the Company, and on April 25, 2008 signed an agreement in which her collateralization is shared with the State of Ohio. On November 18, 2010, Thelma Gault signed an agreement subordinating up to $700,000 of debt to the Walter Doyle Trust and the Julie Jacobs Trust and to Standard Energy through the Julie Jacobs Trust. Note was due on June 1, 2014 and now is considered due on demand.		584,352		584,352
Total debt payable to related parties	$	954,476	$	944,758

F-1518Table of Contents

7 -– DEBT (Continued)

		December 31,		December 31,
		2014		2013
Note payable to Julie E. Jacobs Trust (JJ Trust) in the original amount of $100,000 at an annual interest rate of 20%. Effective September 26, 2010, the annual interest rate increased to 30% with the note payable on demand. On December 21, 2011, note was amended decreasing the annual interest rate to 8% with interest payable annually on January 3rd and with the principal balance due on January 3, 2014. The note was extended on January 27, 2014 to January 3, 2016 and the $8,071 in interest due at January 3, 2014 was included in the new note balance of $108,071. The $8,071 addition to the loan is payable to the JJ Trust upon the receipt by the Company of new equity funding of $100,000 or more. Since more than $100,000 of equity funding has been received, the $8,071 is now payable to the JJ Trust and has been included in the current portion of related party debt. In connection with the note extension 216,000 warrants to purchase stock at $0.24 per share were issued in return for the agreement to extend the note to January 3, 2016.		108,071		100,000
Note payable to Thelma Gault, a stockholder, in the original amount of $800,000 at an interest rate of 10%. The loan is collateralized by all assets of the Company, and on April 25, 2008 signed an agreement in which her collateralization is shared with the State of Ohio. On November 18, 2010, Thelma Gault signed an agreement subordinating up to $700,000 of debt to the Walter Doyle Trust and the Julie Jacobs Trust and to Standard Energy through the Julie Jacobs Trust. Note was due on June 1, 2014 and now is considered due on demand.		584,352		584,352
Total debt payable to related parties	$	944,758	$	834,352
Less current portion of debt payable to related parties		604,529		584,352
Long term debt payable to related parties	$	340,229	$	250,000

F-16

7 - DEBT (Continued)

Other debt is as follows:

	December 31,		December 31,
	2014		2013
	2015		2014
Note payable to Ohio Innovation Loan Fund (OILF) at an interest rate of 8%. The interest rate increases to 10.5% effective October 1, 2014 as a result of missing a loan covenant. Monthly payments of principal, interest, escrow, and service fees are based on the loan agreement. The loan is collateralized by all assets of the Company, and this collateralization is shared with the Thelma Gault per agreement signed on April 25, 2008. On November 29, 2010, The Director of Development for the State of Ohio signed an agreement subordinating up to $700,000 of debt to the Walter Doyle Trust and the Julie Jacobs Trust and to Standard Energy through the Julie Jacobs Trust. On December 1, 2012, Note was modified extending the due date to November 2015. The Company’s last payment was made in October of 2014 for July of 2014, causing the loan to now be considered due on demand. The Company is working with the OILF to get payments back on schedule.	$	325,280	$	391,018
Note payable to Ohio Innovation Loan Fund (OILF) at an interest rate of 8%. The interest rate increased to 10.5% effective October 1, 2014 as a result of missing a loan covenant. Monthly payments of principal, interest, escrow, and service fees are based on the loan agreement. The loan is collateralized by all assets of the Company, and this collateralization is shared with the Thelma Gault per agreement signed on April 25, 2008. On November 29, 2010, The Director of Development for the State of Ohio signed an agreement subordinating up to $700,000 of debt to the Walter Doyle Trust and the Julie Jacobs Trust and to Standard Energy through the Julie Jacobs Trust. On December 1, 2012, the Note was modified extending the due date to November 2015. An additional extension was granted to the Company in December 2015 extending the due date to August 31, 2016. An amendment to extend the due date is currently underway.	$	253,091	$	325,280
Notes payable to Merrill Lynch in the original amount of $400,000, with interest payable at Libor plus .56%. In addition, this debt is guaranteed 50% each by the Walter J. Doyle Trust and the Julie E. Jacobs Trust. As compensation for their guarantees, the trusts receive 4% per annum and share a first position lien on all assets. The note is due on demand.		~~395~~393,~~350~~354		~~396~~395,~~448~~350
Notes payable to four different investors in the original amount of $250,000 at an interest rate of 12%. On January 31, 2012, all of these notes except for a $75,000 note were converted to shares of stock at a price of $.25 per share. The $75,000 note was due June 30, 2012 and is now considered due on demand.		75,000		75,000
Notes payable to four different investors in the original amount of $250,000 at an original interest rate of 12%. On January 31, 2012, all of these notes except for a $75,000 note were converted to shares of stock at a price of $.25 per share. The $75,000 note was due June 30, 2012 and is now considered due on demand. The interest rate on the note has increased to 25% due to a default provision of the note.		75,000		75,000
Other debt	$	~~795~~721,~~630~~445	$	~~862~~795,~~466~~630
Less current portion of debt payable to non-related parties		~~795~~721,~~630~~445		~~559~~795,~~987~~630
Long term debt payable to non-related parties	$	-	$	~~302,479~~-

F-17

7 - DEBT (Continued)

The principal maturities of the notes payable for the next five years and in the aggregate are as follows:

	Year ending
		Period ending
	~~December 31,~~	December 31,
2015	$	1,400,159
2016		$	1,675,921
2016		340,229
2017			-
2017		-
2018			-
2018		-
2019			-
2019		-
2020			-
	$	~~1,740,388~~$	1,675,921

The Company is not in compliance with certain debt covenants and has not received waivers from the lender. As a result, the notes payable with an outstanding balances of $75,000 ~~and~~is ~~$325,280 are~~ due on demand and ~~are~~is classified as current in the accompanying balance sheets.

~~Conversion~~F-19 Table of ~~debt~~Contents

~~During~~8 ~~the~~– ~~year~~STOCKHOLDERS’ ended December 31, 2013, certain debt instruments were converted to equity. Prior to conversion, some of these debt instruments were modified to include a debt conversion feature. Based on the terms of the transactions, these modifications and conversion were treated as equity transactions.DEFICIENCY

~~The~~Authorization ~~following~~to ~~table~~increase ~~lists~~Capital ~~debt that was converted during the year ended December 31, 2013:~~Stock

	Conversion of Debt Table
	Debt		Accrued Interest		Total		Stock issued
Note Converted	Extinguished		Extinguished		Extinguished		Shares
Forest Capital accrued interest on note due January 3, 2013	$	-	$	12,391	$	12,391		49,562
Julie E. Jacobs Trust accrued interest on note due January 3, 2013		-		8,260		8,260		33,042
	$	-	$	20,651	$	20,651		82,604

On July 28, 2014, the Board of Directors authorized the Company to issue 200,000,000 of Common Stock at $0.001 per value per share.

F-18

8 - STOCKHOLDERS’ DEFICIENCY

Stock Sales

~~During~~On ~~the~~May ~~period ended December 31~~4, ~~2014~~2015, ~~warrants were exercised for~~ the ~~purchase~~Company ofsold ~~4,407,750~~in ~~shares;~~a ~~312,500~~private ofoffering ~~the~~to ~~warrants were exercised at~~ a ~~price~~current ofBoard ~~$.005~~member ~~per~~and ~~share~~to ~~and~~two ~~4,095,250~~other ofaccredited ~~the~~investors ~~warrants~~that ~~were~~are ~~exercised~~existing atshareholders, a ~~price~~total of ~~$.10 per share. During the year ended December 31~~50,000 ~~2013, the company sold 7,187,500~~ shares of ~~stock~~its ~~and~~Series ~~warrants~~A ~~(one~~Preferred ~~share~~The ofPreferred ~~stock~~Stock ~~and~~pays ~~one~~an ~~warrant~~annual ~~equals~~dividend ~~one unit) as part~~ of ~~a private placement memorandum; 1,000,000 of the units were sold for~~ $.2580 ~~per~~cents ~~unit with the stock warrants exercisable at $.36~~ per share, ~~250,000~~(payable ofin ~~the~~cash ~~units~~or ~~were~~Common ~~sold~~Stock ~~for~~at ~~$.20 per unit with~~ the ~~stock~~Company’s ~~warrants~~discretion) ~~exercisable~~and ateach ~~$.24 per~~ share ~~and~~is ~~5,937,500~~convertible ofinto ~~the units were sold to existing private placement investors for $~~66.1667 ~~per~~shares ~~unit~~of ~~with~~Common ~~the~~Stock ~~stock warrants exercisable~~ at ~~$.24 per share. Additionally, stock options and warrants were exercised for~~ the ~~purchase~~Company’s ~~of 906,162 shares at a purchase price ranging from $~~discretion.~~0032~~ ~~to $.021 per share.~~

Forty million shares of Common Stock have been reserved for the purposes of payment of dividends on preferred stock and the conversion of Preferred Stock into Common Stock. The Preferred Stock ranks senior to the Common Stock in liquidation.

During the year ended December 31, 2014, warrants were exercised for the purchase of 4,407,750 shares; 312,500 of the warrants were exercised at a price of $.005 per share and 4,095,250 of the warrants were exercised at a price of $.10 per share.

Options

On February 1, 2012, the Board approved and granted 600,000 stock options to three of its employees, with an exercise price of $.25 per share with a vesting schedule of 60% on the first anniversary of the grant, 20% on the second anniversary of the grant and the final 20% on the third anniversary of the grant. On November 26, 2012, the Board approved and granted 3,000,000 stock options to the Company’s president and CEO, with an exercise price of $.25 per share with a vesting schedule of 33 and 1/3% on the first anniversary of the grant, 33 and 1/3% on the second anniversary of the grant and the final 33 and 1/3% on the third anniversary of the grant. On December 3, 2014, the Board reduced the exercise price on the 600,000 and 3,000,000 stock options issued on February 1, 2012 and November 26, 2012, respectively, from $.25 to $.075, which was the market price of the stock on December 3, 2014. Additional compensation expense of approximately $55,000 has been recognized based on this exercise price reduction in the year ended December 31, 2014 and additional compensation expense of approximately $23,000 will be recognized based on this exercise price reduction in the year ended December 31, 2015. On December 3, 2014, the Board approved and granted 1,950,000 stock options to five of its employees, with an exercise price of $.075 per share with a vesting schedule of 60% on the first anniversary of the grant, 20% on the second anniversary of the grant and the final 20% on the third anniversary of the grant. On December 3, 2014, the Board approved and granted 1,500,000 stock options to the two non-employee directors of the Company with an exercise price of $.075 per share with a vesting schedule of 25% on the first anniversary of the grant, 25% on the second anniversary of the grant, 25% on the third anniversary of the grant and 25% on the fourth anniversary of the grant. Full vesting is to occur upon a change in ownership of the Company for all of these stock options.

~~F-19~~February 1, 2012 and November 26, 2012, respectively, from $.25 to $.075, which was the market price of the stock on December 3, 2014. Additional compensation expense of approximately $22,900 and $55,000 has been recognized based on this exercise price reduction at December 31, 2015 and December 31, 2014, respectively.

8On December 3, 2014, the Board approved and granted 1,950,000 stock options to five of its employees, with an exercise price of $.075 per share with a vesting schedule of 60% on the first anniversary of the grant, 20% on the second anniversary of the grant and the final 20% on the third anniversary of the grant. On December 3, 2014, the Board approved and granted 1,500,000 stock options to the two non-employee ~~STOCKHOLDERS’~~directors ~~DEFICIENCY~~of ~~(continued)~~the Company with an exercise price of $.075 per share with a vesting schedule of 25% on the first anniversary of the grant, 25% on the second anniversary of the grant, 25% on the third anniversary of the grant and 25% on the fourth anniversary of the grant. Full vesting is to occur upon a change in ownership of the Company for all of these stock options.

The following table summarizes the activity for all stock options:

	Number of Options			Range of Exercise Price		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years		Weighted Average Grant Date Fair Value
Outstanding options as of January 1, 2013		44,725,371		$	.00320-.25000	$	.01993		6.08	$	.03561
Options granted		-
Options cancelled/expired		(3,370,248	)	$	.02131-00320	$	.02131		-	$	.01168
Options exercised		(593,618	)	$	.02131	$	.01819		5.78	$	.02433
Outstanding options as of December 31, 2013		40,761,505		$	.00320-.25000	$	.03704		5.55	$	.03285
Options granted		3,450,000		$	.07500	$	.07500		9.93	$	.07500
Options cancelled/expired		-			-		-		-		-
Options exercised		-			-		-		-		-
Outstanding options as of December 31, 2014		44,211,505		$	.00320-.07500	$	.02575		4.97	$	.0239

F-20

Table of Contents

~~The~~8 ~~following~~– ~~table~~STOCKHOLDERS’ ~~provides~~DEFICIENCY ~~information about options under the Plan that are outstanding and exercisable as of December 31, 2014:~~(continued)

					Options Outstanding			Options Exercisable
		Number ofOptions				Range ofExercise Price				WeightedAverageExercisePrice		WeightedAverageRemaining ContractualTerm inYears		WeightedAverageGrant DateFair Value
Exercise Price			As of December 31, 2014			Weighted Average Contractual Life Remaining		As of December 31, 2014
Outstanding options as of January 1, 2014			40,761,505			$.00320 - $.25000				$	.03704		5.55	$	.03285
$	.00320			10,056,677		4.76 years			10,056,677
Options granted			3,450,000				$.07500			$	.07500		9.93	$	.07500
$	.02131			27,104,828		4.05 years			27,104,828
Options cancelled/expired			-				-				-		-		-
$	.07500			3,600,000		7.77 years			2,480,000
Options exercised			-				-				-		-		-
$	.07500			3,450,000		9.93 years			-
Outstanding options as of December 31, 2014			44,211,505				$.00320 - $.07500			$	.02575		4.97	$	.02390
				44,211,505					39,641,505
Options granted			-				-				-		-		-
Options cancelled/expired			748,944				$.02131			$	.02131		-	$	.07514
Options exercised			-				-				-		-		-
Outstanding options as of December 31, 2015			43,462,561				$.00320-$.07500			$	.02583		4.25	$	.02415

~~F-20~~The following table provides information about options under the Plan that are outstanding and exercisable as of December 31, 2015:

8 - STOCKHOLDERS’ DEFICIENCY (continued)

		Options Outstanding			Options Exercisable
Exercise Price		As of December 31, 2015		Weighted Average Contractual Life Remaining	As of December 31, 2015
$	.00320		10,056,677	3.76 years		10,056,677
$	.02131		26,355,884	3.15 years		26,355,884
$	.07500		3,600,000	6.77 years		3,600,000
$	.07500		3,450,000	8.93 years		1,545,000
			43,462,561			41,557,561

Included in the above table are 65,~~541~~792,~~614~~670 options to non-employees and 37,669,891 to officers, directors and employees of the Company.

F-21

Table of Contents

8 – STOCKHOLDERS’ DEFICIENCY (continued)

Warrants

The Company has 1510,~~000~~944,~~908~~112 and 1815,~~154~~000,~~428~~908 warrants outstanding as of December 31, ~~2014~~2015 and 2014, respectively. Additionally, for the year ending December 31, ~~2013~~2015, ~~respectively~~the Company recognized an obligation to issue 2,750,000 warrants related to the joint venture at an exercise price of $.010. These warrants have not been issued yet (see note 11). For the year ending December 31, 2014, 2,269,230 warrants were issued at an exercise price of $0.24 as follows: 1,340,000 warrants were issued in connection with the new debt issuances and debt modifications and the Company issued 929,230 warrants in exchange for services.

In July 2014, the Company began a capital raise program consisting of a reduction in the exercise price of the Company’s outstanding warrants to purchase its common stock to $0.10 per share, for all of the Company’s outstanding warrants with an exercise price greater than $0.15 per share and to sell new shares of common stock for $0.12 or less per share (“New Shares”) depending on market conditions. The Company’s immediate goal was to raise $2,000,000. The Company set a minimum capital raise threshold of $1,500,000 before purchases of New Shares or warrant exercises can be accepted, unless specific authorization to consummate the transaction is received from the New Shares purchaser or warrant exerciser. For the ~~period~~year ending December 31, 2014, $409,525 has been received from the exercise of warrants through this program. The Company received specific authorization in the form of a signed waiver from all of those that exercised warrants waiving the requirement for the Company to raise a minimum of $1,500,000 of capital. The capital raise program was closed as of October 2, 2014. In addition to the $409,525 that was raised through the capital raise program, an additional $1,563 was raised through the exercise of 312,500 warrants at an exercise price of $.005 per share for the year ending December 31, 2014.

InSee ~~addition~~footnote to11 ~~the~~for ~~$409,525~~discussion ~~that~~on ~~was~~contingent ~~raised through the capital raise program, an additional $1,563 was raised through the exercise of 312,500~~ warrants ~~at an exercise price of $~~.~~005~~ ~~per share for the year ending December 31, 2014.~~

On October 18, 2013, the Company extended any unexpired Common Stock Purchase Warrants for one additional year for all unexpired warrants issued in connection with investments in the PPM and the follow-up PPM.

This table summarizes the grant date and exercise date for all warrants:

F-2122 Table of Contents

8 -– STOCKHOLDERS’ DEFICIENCY (continued)

	Number of		Exercise			Expiration
	Warrants		Price		~~Expiration Date~~	Date
Outstanding Warrants from January 1, 2011		1,291,928	$	.02131	July, 2015
Outstanding Warrants from		499,296	$	.02131		July, 2016
Warrants Granted		-		-	All have expired
January 1, 2011		293,336	$	.02131		August, 2017
Outstanding Warrants from December 31, 2011		1,291,928	$	.02131	Expiration dates As listed above
Outstanding Warrants Granted in 2012		2,500,000	$	.24000		May, 2016
Warrants Granted		700,000	$	.36000	January, 2015
		200,000	$	.24000		June, 2016
		240,000	$	.36000	February, 2015
		100,000	$	.24000		October, 2016
		140,000	$	.36000	March, 2015
Outstanding Warrants Granted in 2013		3,806,250	$	.24000		May, 2016
		1,000,000	$	.36000	April, 2015
		312,500	$	.24000		June, 2016
		360,000	$	.36000	May, 2015
		250,000	$	.24000		July, 2016
		380,000	$	.36000	June, 2015
		500,000	$	.24000		September, 2016
		60,000	$	.36000	July, 2015
		156,250	$	.24000		October, 2016
		40,000	$	.36000	August, 2015
		781,250	$	.24000		November, 2016
		2,500,000	$	.24000	May, 2016
Outstanding Warrants Granted in 2014		62,500	$	.24000		January, 2016
		200,000	$	.24000	June, 2016
		616,000	$	.24000		January, 2017
		100,000	$	.24000	October, 2016
		62,500	$	.24000		February, 2016
Outstanding Warrants from December 31, 2012		6,931,928	$	.02131-.36000	Expiration dates As listed above
		62,500	$	.24000		March, 2016
Warrants Granted		40,000	$	.36000	January, 2015
		62,500	$	.24000		April, 2016
		40,000	$	.36000	February, 2015
		62,500	$	.24000		May, 2016
		40,000	$	.36000	March, 2015
		62,500	$	.24000		June, 2016
		40,000	$	.36000	April, 2015
		62,500	$	.24000		July, 2016
		40,000	$	.36000	May, 2015
		62,500	$	.24000		August, 2016
		3,806,250	$	.24000	May, 2016
		62,500	$	.24000		September, 2016
		62,500	$	.24000	~~June, 2015~~	October, 2016
		312,500	$	.24000	June, 2016
		194,000	$	.10000		October, 2018
		62,500	$	.24000	~~July, 2015~~	November, 2016
		250,000	$	.24000	July, 2016
		47,730	$	.10000		December, 2018
		62,500	$	.24000	August, 2015
Outstanding Warrants Granted in 2015		-		-		-
		62,500	$	.24000	September, 2015
Outstanding Warrants as of December 31, 2015		10,944,112		$02131 - $.24000		Expiration dates as As listed above
		500,000	$	.24000	September, 2016
		62,500	$	.24000	October, 2015
		156,250	$	.24000	October, 2016
		62,500	$	.24000	November, 2015
		781,250	$	.24000	November, 2016
		62,500	$	.24000	December, 2015
Outstanding Warrants from December 31, 2013		13,455,678	$	.02131-.36000	Expiration dates As listed above
Warrants Granted		62,500	$	.24000	January, 2016
		616,000	$	.24000	January, 2017
		62,500	$	.24000	February, 2016
		62,500	$	.24000	March, 2016
		62,500	$	.24000	April, 2016
		62,500	$	.24000	May, 2016
		62,500	$	.24000	June, 2016
		62,500	$	.24000	July, 2016
		62,500	$	.24000	August, 2016
		62,500	$	.24000	September, 2016
		62,500	$	.24000	October, 2016
		194,000	$	.10000	October, 2018
		62,500	$	.24000	November, 2016
		47,730	$	.10000	December, 2018
Outstanding Warrants as of December 31, 2014		15,000,908	$	.02131-.36000	Expiration dates As listed above

~~F-22~~The warrants for 792,632 shares issued prior to January 1, 2011, include certain provisions that protect the holders from a decline in the stock price of the Company. As a result of those provisions, the Company recognizes the warrants as liabilities at their fair values on each reporting date.

8As shown in footnote 6, the Company has recorded a warrant liability of $6,187 and $49,404 as of December 31, 2015 and December 31, 2014, respectively, which is based on the Black-Scholes ~~STOCKHOLDERS’~~valuation ~~DEFICIENCY~~model ~~(continued)~~to estimate the fair value of the warrants.

The ~~warrants~~significant ~~for~~assumptions ~~1,291,928~~considered ~~shares~~by ~~issued~~the ~~prior~~model towere ~~January~~the 1,remaining ~~2011~~term of the warrants, ~~include~~the ~~certain~~fair ~~provisions~~value ~~that~~per ~~protect~~share ~~the~~stock ~~holders~~price ~~from~~of $.03 and $.07, a ~~decline~~risk infree ~~the~~treasury ~~stock~~rate ~~price~~for .55 to 1.67 years of ~~the~~.498% ~~Company~~to .923% Asand a.50 ~~result~~to 2.75 years of ~~those~~.120% ~~provisions,~~to ~~the~~.993% ~~Company~~and ~~recognizes~~an ~~the~~expected ~~warrants~~volatility asof ~~liabilities~~62% and 60% at ~~their~~December ~~fair~~31, ~~values~~2015 onand ~~each~~December ~~reporting~~31, ~~date~~2014, respectively.

~~As shown in footnote 6, the Company has recorded a warrant liability of $49,404 and $159,330 as of December 31, 2014 and December 31, 2013, respectively, which is based on the Black~~F-~~Scholes~~23 ~~valuation~~Table ~~model to estimate the fair value~~ of ~~the warrants.~~Contents

~~The~~9 ~~significant~~– assumptions considered by the model were the remaining term of the warrants, the fair value per share stock price of $.07 and $.17, a risk free treasury rate for .5 years and 1.5 years of .12% and .26% at December 31, 2014 and December 31, 2013, respectively and an expected volatility of 60%.COMMITMENTS

9In -July ~~COMMITMENTS~~of 2013, the Company entered into a four year extension of the lease for the rental of the office and warehouse space expiring on August 31, 2017. Under the terms of the current lease and the four year extension, the Company’s future minimum rental payments are: $89,000 for 2016, and $60,400 for 2017. Total rent expense was $86,458 and $85,256 for years ending December 31, 2015 and 2014, respectively.

In July of 2013, the Company entered into a four year extension of the lease for the rental of the office and warehouse space expiring on August 31, 2017. Under the terms of the current lease and the four year extension, the Company’s future minimum rental payments are: $86,600 for 2015, $89,000 for 2016, and $60,400 for 2017. Total rent expense was $85,256 and $84,644 for years ending December 31, 2014 and 2013, respectively.

On July 12, 2013, the company entered into the “Broadcast Technology and Promotional Rights Agreement between the NHRA and The Guitammer Company” whereby in exchange for use of its broadcast technology and certain sponsor payments the parties agreed that the NHRA telecasts on ESPN2 would be tactically enhanced and Guitammer would receive sponsor benefits including: television commercials, on-air sponsored segments, presence at certain NHRA races in the Manufacturer’s Midway, and other promotional rights and benefits. On April 10, 2014, the agreement was suspended retroactively, effective January 1, 2014 due to a disagreement between the NHRA and ESPN regarding the nature of the tactile enhancement of the previous season’s tested, approved and successfully tactile enhanced NHRA broadcasts by the Company. The agreement will be reinstated for one 12 month period when and if this situation is resolved. The $100,000 payment made by the Company in January of 2014 was refunded to the Company in April, 2014 as a part of the suspension agreement.

Stock and warrants issued for services

During the year ending December 31, ~~2014~~2015, the Company issued ~~687~~100,~~500~~000 shares of common stock ~~and 929,230 warrants~~ for consulting services valued at $908,~~362~~500. During the year ending December 31, ~~2013~~2014, the Company issued ~~949~~687,500 shares of common stock and ~~717~~929,~~500~~230 warrants for consulting services valued at $~~184~~90,~~771~~362.

~~F-23~~On February 10, 2012, the Company entered into a 3 month agreement with John Ertmann for advisory services. Under the terms of the agreement, Mr. Ertmann will be compensated at a rate of 40,000 shares of common stock and 40,000 warrants per month. The agreement has been extended through December, 2014, with the compensation arrangement of 40,000 shares of common stock and 40,000 warrants per month for April and May of 2013, and 62,500 shares of common stock and 62,500 warrants per month for the months June 2013 through December 2014. In December, 2014 and 2015, Mr. Ertmann was not available for advisory services and consequently, no common stock or warrants were issued for those months.

9On -August ~~COMMITMENTS~~29, 2014 the Company, the San Jose Sharks (~~continued~~“Sharks”) NHL hockey team and Comcast SportsNet California (“CSNCA”) executed a “Letter Agreement Regarding Technology Initiative” to integrate Guitammer’s broadcast technology in the SAP Center at San Jose and into the CSNCA’s telecasts of the San Jose Sharks home games at the SAP Center for the 2014/15 NHL season, and to collectively promote and market the enhanced broadcast to the San Jose Sharks and CSNCA viewers. Starting from the first home game on October 11th until the last home game on April 6, 2015, the CSNCA’s Sharks telecasts have successfully been broadcast in 4D using Guitammer’s technology. The official public launch of this agreement was November 20th, 2014. The Company expects to commence this service as additional capital is sourced.

OnF-24 ~~February~~Table ~~10, 2012, the Company entered into a 3 month agreement with John Ertmann for advisory services. Under the terms~~ of the agreement, Mr. Ertmann will be compensated at a rate of 40,000 shares of common stock and 40,000 warrants per month. The agreement has been extended through December, 2014, with the compensation arrangement of 40,000 shares of common stock and 40,000 warrants per month for April and May of 2013, and 62,500 shares of common stock and 62,500 warrants per month for the months June 2013 through December 2014. In December, 2014, Mr. Ertmann was not available for advisory services and consequently, no common stock or warrants were issued for that month.Contents

On10 ~~May~~– ~~20,~~CONCENTRATION ~~2013,~~OF ~~the~~CREDIT Company entered into a 3 month agreement with JFenway LLC for investor relations services. Under the terms of the agreement JFenway LLC was compensated at a rate of 100,000 shares of common stock for the 3 months of services.RISK

On August 29, 2014 the Company, the San Jose Sharks (“Sharks”) NHL hockey team and Comcast SportsNet California (“CSNCA”) executed a “Letter Agreement Regarding Technology Initiative” to integrate Guitammer’s broadcast technology in the SAP Center at San Jose and into the CSNCA’s telecasts of the San Jose Sharks home games at the SAP Center for the 2014/15 NHL season, and to collectively promote and market the enhanced broadcast to the San Jose Sharks and CSNCA viewers. Starting from the first home game on October 11th to present, the CSNCA’s Sharks telecasts have successfully been broadcast in 4D using Guitammer’s technology. The official public launch of this agreement was November 20th, 2014.

10 - CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of accounts receivable. Receivables are stated at the amounts management expects to collect from outstanding balances. Generally, the Company does not require collateral or other security to support contract receivables.

The Company had ~~one~~no major customer for the year ending December 31, ~~2014~~2015 and ~~had~~one no major ~~customers~~customer for the year ending December 31, ~~2013~~2014. A major customer is defined as one that purchases ten-percent or more in a reporting period. Net sales for the years ended December 31, ~~2014~~2015 and ~~2013~~2014 include sales to the following major customer:

Customer		~~2014~~2015				~~2013~~2014
Amazon.com			124.86	%			912.68	%

Amazon.com accounted for 363.58% and 1236.65% of the total accounts receivable balance at December 31, ~~2014~~2015 and December 31, ~~2013~~2014, respectively.

The Company had major suppliers in each of the reporting periods presented. A major supplier is defined as one that provides ten-percent or more of total cost-of-sales in a particular reporting period or has an outstanding account payable balance of ten-percent or more as of the reporting period.

F-24

	December 31,
	2015						2014
	Purchases During Period			Account Payable Percentage at end of Period			Purchases During Period			Account Payable Percentage at end of period
LFT Manufacturing, LLC		68	%		18	%		20	%		16	%
Actiway Industrial Co.		21	%		10	%		30	%		12	%
Sonavox Canada, Inc.		5	%		6	%		13	%		9	%
Eminence Speaker LLC		-			34	%		31	%		35	%

10 F-25 ~~CONCENTRATION~~Table OFof ~~CREDIT RISK (continued)~~Contents

	December 31,
	2014				2013
	Purchases During Period		Account Payable Percentage at end of Period		Purchases During Period		Account Payable Percentage at end of period
Eminence Speaker LLC	31	%	35	%	52	%		46	%
Actiway Industrial Co.	30	%	12	%	9	%		25	%
LFT Manufacturing, LLC	20	%	16	%	-			-
Sonavox Canada, Inc.	13	%	9	%	32	%		16	%

11 – RELATED PARTY TRANSACTIONS

11 - RELATED PARTY TRANSACTIONS

One of the Company’s shareholders is also a note holder and a minority shareholder of a major supplier to the Company. This shareholder is a note holder who also owns 2,590,098 shares of the Company’s common stock and is a minority shareholder in Eminence Speaker, LLC, a major supplier to the Company.

On September 12, 2014, Guitammer entered into an agreement with an unrelated third party to organize a joint venture company named LFT Manufacturing that will manufacture and distribute certain Guitammer products. Guitammer and the third party will make capital contributions of $1,000 each to the joint venture company. Guitammer and the third party each have 50% interests in the joint venture company. The joint venture company borrowed from the third party the amount necessary to fund the startup costs to manufacture products, including initial tooling, obtaining factory space, and labor costs. In conjunction with the joint venture, the Company agreed to grant to the unrelated party 2,750,000 warrants to purchase common stock of the Company exercisable at $.10 per share contingent upon the completion of certain criteria which have not been achieved and therefore has not been recorded at December 31, 2014. The company purchased $106,036 of product from LFT Manufacturing, LLC for the year ended December 31, 2014. The Company accounts for this joint venture as an equity method investment. Under the equity method of accounting, an Investee company’s accounts are not reflected within the Company’s Consolidated Balance Sheets and Consolidated Statements of Income; however, the Company’s share of the earnings or losses of the Investee Company is reflected in the Company’s Consolidated Statements of Income. The Company’s carrying value in an equity method Investee company would be reflected in the Company’s Consolidated Balance Sheets. The Company’s share of earnings was not significant for the year ending December 31, 2014 and therefore nothing has been recorded in the Company’s Consolidated financial statements.follows:

F1. Working capital loan had been provided by the unrelated third party to fund LFT for start-25up costs, tooling and funding operations. 2. Guitammer has received from LFT, no less than 10,000 total units of the products, each and all of which are both sold to Guitammer at a price and are of a quality deemed acceptable to Guitammer. 3. The second anniversary of the loan referenced in number 1 above has occurred. 4. In the event of a change of control of The Guitammer Company that occurs before the second anniversary of the loan referenced in number 1 above and with the successful completion of requirement number one and two above, the warrants shall be granted immediately preceding the change of control.

12During the 3rd Quarter of 2015, the criteria from item 1 and 2 above has been satisfied, but the other criteria have not been met. Under generally accepted accounting principles, these warrants are considered contingent consideration in connection with the establishment of a joint venture. In connection with these rules, since criteria 1 and 2 as noted above have been achieved, this contingency has been reflected as an increase of $93,500 for both our investment in this joint venture and to additional paid in capital using the Black-Scholes ~~OTHER~~valuation ~~ASSETS~~model to estimate the fair value of the warrants. Upon satisfactory completion of all of these criteria, the warrants will be issued. Based on events and circumstances that have occurred subsequent to December 31, 2015 but prior to issuance of these consolidated financial statements, management conducted an analysis of fair value of the investment in the joint venture. Based on this analysis, management determined the fair value of the investment to be less than the carrying value recorded at December 31, 2015. Therefore, management has recorded an impairment of investment in joint venture of $93,500 for the year ended December 31, 2015.

~~Other~~ F-26Table ~~assets consist~~ of patents and trademarks related to the ButtKicker brand products and technology. The assets are being amortized over 10 years based on the estimated useful lives of the patents and trademarks. Amortization of the intangible assets, which is included in general and administrative expenses, was $8,295 and $7,308 for the years ended December 31, 2014 and 2013, respectively. The estimated future amortization expense for intangible assets is approximately: $7,700 in 2015, $6,300 in 2016, $3,900 in 2017, $2,200 in 2018 and 2019 and under $2,000 thereafter.Contents

1311 -– ~~INCOME~~RELATED ~~TAXES~~PARTY TRANSACTIONS (continued)

The Company accounts for this joint venture as an equity method investment. Under the equity method of accounting, an Investee company’s accounts are not reflected within the Company’s Consolidated Balance Sheets and Consolidated Statements of Income; however, the Company’s share of the earnings or losses of the Investee Company is reflected in the Company’s Consolidated Statements of Income. The Company’s carrying value in an equity method Investee company are reflected in the Company’s Consolidated Balance Sheets. The Company’s share of earnings for the year ending December 31, 2015 was approximately $23,000 and has been recorded in the Company’s Consolidated financial statements. The company purchased $410,601 of product for the year ending December 31, 2015 and $106,036 of product for the year ended December 31, 2014 from LFT Manufacturing, LLC.

12 – OTHER ASSETS

Other assets consist of patents and trademarks related to the ButtKicker brand products and technology. The assets are being amortized over 10 years based on the estimated useful lives of the patents and trademarks. Amortization of the intangible assets, which is included in general and administrative expenses, was $7,953 and $8,295 for the years ended December 31, 2015 and 2014, respectively. The estimated future amortization expense for intangible assets is approximately: $6,700 in 2016, $4,300 in 2017, $2,600 in 2018 and 2019, 2,300 in 2020 and $7,100 thereafter.

13 – INCOME TAXES

The Company accounts for income taxes under the asset and liability method which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of differences between the carrying amounts and the tax basis of the assets and liabilities. No provision has been recorded for a deferred tax asset due to net operating losses and full valuation allowances against deferred income taxes.

A reconciliation of the federal statutory rate to the Company’s effective tax rate for the years ended December 31, ~~2014~~2015 and ~~2013~~2014 is as follows:

	December 31,
	2014			2013
	2015				2014
Tax benefit at statutory rate	~~34.0~~	%34.0	%		~~34.0~~	%34.0	%
Valuation allowance	~~(24.9~~	)(27.7	)%		~~(30.4~~	)%(24.9	)%
Other, net	~~(9.1~~	)(6.3	)%		~~(3.6~~	)%(9.1	)%
Effective tax rate	-	-			-

The tax effects of temporary differences that give rise to significant portions of the net deferred tax asset balance at December 31, ~~2014~~2015 and ~~2013~~2014 are as follows:

December 31,
2014 2013
Accounts receivable allowances 1,563 1,563
Fixed Assets 43,839 55,237
Net Operating loss carry forward 1,480,398 1,078,452
1,525,800 1,135,252
Valuation allowance (1,525,800 ) (1,135,252 )
Net Deferred tax asset $ - $ -

F-27
Table of Contents

13 – INCOME TAXES (continued)

14 - SUBSEQUENT EVENTS

	December 31,
	2015			2014
Accounts receivable allowances		1,725			1,563
Fixed Assets		-			43,839
Net Operating loss carry forward		1,868,063			1,480,398
		1,869,788			1,525,800
Valuation allowance		(1,869,788	)		(1,525,800	)
Net Deferred tax asset		-			-

~~Since~~14 ~~December~~– ~~31,~~SUBSEQUENT ~~2014, a total of 187,500 shares and 187,500 warrants were issued to pay for services valued at approximately $30,000.~~EVENTS

~~F-26~~Effective February 5, 2016, Lawrence L. Lemoine assumed the offices of both Chief Operating Officer and Chief Financial Officer of the Company. Richard E. Conn, the previous Chief Financial Officer of The Guitammer Company has retired from his offices with the Company effective on the same date.

Before joining the Company, Mr. Lemoine, age 64, was CEO of Wave Entertainment Network where he created and successfully launched a new entertainment platform of a “first of its kind” IPTV worldwide entertainment platform for the maritime and hospitality industries. Prior to Wave, he was VP Finance of DIRECTV, involved in DIRECTV’s growth from the early stages to a subscriber base of over 12 million. In addition, Mr. Lemoine held the Controller post for the 1984 Olympic Organizing Committee, the most profitable Olympic Games in history and also served as an executive consultant to various start-ups that include a Paris-based satellite service organization, Daytona Prototype motor racing team (U.S.) and a sports video production organization. Mr. Lemoine and the Company entered into an agreement where he will receive 200,000 shares of common stock per month for three months and will receive $10,000 per month during this time period once the receipt by the Company of $6,000,000 of financing.

On April 28, 2016, the Company’s Board of Directors approved the sale of 2,500,000 common shares for 5 cents per share the issuance of 5,000,000 warrants at an exercise price of 5 cents per share expiring on May 31, 2016 to an individual investor.

On April 28, 2016, the Company’s Board of Directors approved the reduction of the exercise price of outstanding warrants to purchase its stock for 5 cents per share for all of the Company’s outstanding warrants with an exercise price greater than 5 cents per share solely during the time period beginning on April 28, 2016 and ending on May 31, 2016 On June 20, 2016, the Board of Directors declared a dividend to be paid to Preferred Stockholders, on record as of March 31, 2016, in common stock at a rate of $0.15 per share.

F-28

Filing Compare · Guitammer Co