The Guitammer Co (OTCBB:GTMM) And The Two Sides Of The Coin
Most of the ventures that we cover on these pages every day are usually tiny companies that have little to no operations, are strapped for cash, and there really is little to suggest that there is any potential in them at all. Often such entities get pumped by paid promoters, their share price rises to some considerable heights after which the tickers crash into oblivion leaving quite a lot of angry investors behind. There are those few that really want to succeed, though and, as we wrote in our previous articles, The Guitammer Co (OTCBB:GTMM) is one of them.
You can see that we first published an article on them back at the end of March when GTMM were mentioned in one of Quality Stocks’ emails. We did a some research and we found that GTMM‘s ButtKicker is a real product with real fans all around the world. The reviews were largely positive and the sales figures were increasing year-over-year.
Last week GTMM filed their latest 10-Q for the first quarter of 2013, however, and there seems to be a glitch – the revenues for the first three months of 2013 are significantly lower compared to the same period of 2012. Here’s a summary of all the figures found in the statement:
- cash: $202 thousand
- current assets: $912 thousand
- current liabilities: $2.6 million
- quarterly revenue: $525 thousand
- quarterly net loss: $275 thousand
The report itself as well as a press release that GTMM issued last Wednesday state that according to the company CEO, Mr. Mark Luden, the decrease in revenue is primarily due to the fact that there was a big stocking order from a customer back at the beginning of 2012 which boosted the figures in last year’s report. He also says that he expects that this year will bring quite a lot more sales from the US market and while there’s no guarantees about that, we all hope that Mr. Luden turns out to be correct in his predictions.
In the interest of fairness, we should also point out that, although the revenues are lower for this year, GTMM have managed to decrease the net loss by a little bit which means that they are working on streamlining the whole process. The current assets have also increased substantially compared to the figures of 2012 and, more importantly, they have managed to take care of some of their liabilities.
All in all, it would appear that the people at GTMM really are working and they just need to make sure that the ButKicker systems are sold at a good enough price which could guarantee them profitability.
There is, however, one more issue. As we mentioned GTMM were introduced to us by Quality Stocks a month and a bit ago and when you read through their compensation disclaimer, you will see that GTMM themselves paid $36,500 for the ongoing awareness campaign and we’re not sure if this is such a good decision.
For one, GTMM need all the money they can get and when you have in mind that even after they managed to take care of some of the debt, they will still have current liabilities amounting to more than $2 million, there really is no such thing as spare cash. Not to mention that, as good as the ButtKicker systems might be, we still haven’t seem them bring GTMM even a single penny in profit.
The second problem that we have with these sort of campaigns lies in the results that they usually yield. The latest email that we received hit our inbox just a couple of hours ago and it was sent by Tip.us, an affiliated newsletter of Quality Stocks. They are not the most active of pumpers, but we have still managed to intercept some of their picks. Advaxis, Inc. (OTCBB:ADXS) and Aristocrat Group Corp (OTCMKTS:ASCC) are among the more recent ones and you can see from the charts on the right how badly they ended up.
Will the same thing happen to GTMM? We can’t say it for sure, but doing some due diligence and being extremely careful before investing is certainly something that we would recommend.