The following discussion and analysis should be read in conjunction with Guitammer's Unaudited Condensed Consolidated Interim Financial Statements and notes thereto included elsewhere in this Form 10-Q. Except for the historical information contained herein, the discussion in this Form 10-Q contains certain forward looking statements that involve risks and uncertainties, such as statements of Guitammer plans, objectives, expectations and intentions. The cautionary statements made in this Form 10-Q should be read as being applicable to all related forward-looking statements wherever they appear in this Form 10-Q. 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.

OVERVIEW

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.

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 43,841,320 shares of our Common Stock.

Critical ACCOUNTING POLICIES and Estimates

Management's Discussion and Analysis of Financial Condition and Results of Operations" discusses our interim condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these interim condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the interim condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. A summary of our significant accounting policies is included in the Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2011.

Our management regularly reviews our accounting policies to make certain they are current and also to provide readers of the interim condensed consolidated financial statements with useful and reliable information about our operating results and financial condition. Implementation of these accounting policies includes estimates and judgments by management based on historical experience and other factors believed to be reasonable. This may include judgments about the carrying value of assets and liabilities based on considerations that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Management believes the following critical accounting policies are most important to the portrayal of our financial condition and results of operations and require more significant judgments and estimates in the preparation of our interim condensed consolidated financial statements.

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 $23,600 at March 31, 2012 and December 31, 2011.

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 $10,415 at March 31, 2012 and December 31, 2011.

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 March 31, 2012 and December 31, 2011 the Company had deferred revenue of $132,915 and $199,239, respectively. The Company recognizes revenue and decreases deferred revenue upon delivery of products.

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.

There were no uncertain tax positions at March 31, 2012 or December 31, 2011, as the Company's tax positions for open years meet the recognition thresholds of more likely than not to be sustained upon examinations. Tax returns for the years 2008 through 2011 are currently open to examination. Tax returns prior to 2008 are no longer subject to examination by tax authorities.

Shipping and Handling
Shipping and handling costs of $49,967 and $55,092 for the periods ending March 31, 2012 and 2011, respectively, 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.

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.

RESULTS OF OPERATIONS

Three months ended March 31, 2012

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

Results of Operations

Revenue increased $29,871 or 4%, to $729,137 for the three months ended March 31, 2012, compared to revenue of $699,266 for the three months ended March 31, 2011. During the three months ended March 31, 2012, the Company did not significantly change our product line, our distributions channels or our pricing. Management believes our increase in revenues is primarily attributable to an increase in organic growth due to word of mouth and customer referrals which have resulted in an increased demand for ButtKicker brand products. Additionally, the Company did secure an Original Equipment Manufacturer customer in fiscal year 2011,Palliser Furniture Upholstery LTD, and began to ship product to them in first quarter of 2012 which also contributed to the sales increase. However, management believes revenues for the three months ended March 31, 2012, could have been significantly larger, but product from a key supplier did not arrive until mid-March 2012 leaving insufficient time to ship all of our backorders before March 31, 2012. Backorders at March 31, 2012 were approximately $200,000. Management believes that the effect of the equity capital raised from its Private Placement offering will be to increase inventory levels and reduce backorders during the FY2012.

The Company experiences some seasonality in sales as the 1st quarter and 4th quarter of the year typically experience higher sales volumes attributable to the holiday season and the recurring increase in consumer electronic sales after the holiday season.

Cost of goods sold increased $9,662, approximately 2%, to $422,441, for the three months ended March 31, 2012, compared to cost of goods sold of $412,779 for three months ended March 31, 2011. The 2% increase in the cost of goods sold for the three months ending March 31, 2012 corresponds closely with the 4% increase in revenue for the same time period, but is slightly lower due to variations in the sales mix of products sold as the profit margin on some products are slightly higher.

Gross profit increased by $20,209 or 7% to $306,696 for the three months ended March 31, 2012, compared to gross profit of $286,487 for the three months ended March 31, 2011. Our gross margin percentage increased to approximately 42% for the three months ended March 31, 2012 compared to 41% for the three months ended March 31, 2011. The increase in gross margin of 1% was the result of the sale of more products with higher profit margins in the three months ended March 31, 2012 compared to the three months ended March 31, 2011.

General and administrative expenses increased $150,820, or 44%, to $491,352 for the three months ended March 31, 2012, compared to general and administrative expenses of $340,352 for the three months ended March 31, 2011 primarily due to the increase in stock warrant expenses and professional fees. Significant variations within the general and administrative expenses were as follows:

                                                     March 31,      March 31,        Increase
                                                        2012           2011         (Decrease)
Stock warrant expense                                $  134,711     $        -     $    134,711
Professional fees                                       121,417         59,019           62,398
Duty and custom fees                                     17,016          9,318            7,698
Bad debts                                                     -         19,000          (19,000 )
Payroll                                                  96,740        103,050           (6,579 )
All other general and administrative expenses           121,738        150,145          (28,407 )
                                                     $  491,352     $  340,532     $    150,820

Stock warrant expense increased by approximately $135,000 in the three months ended March 31, 2012 compared to the three months ended March 31, 2011 due to the charge to expense for stock warrants issued to note holders relating to the terms of certain debt instruments. Professional fees increased by approximately $62,000 for the three months ended March 31, 2012 compared to the three months ended March 31, 2011 primarily due to a $62,000 increase in consulting expenses associated with raising capital and investor relations. Duty and custom fees increased by approximately $7,700 due to the expense of duties resulting from the receipt of 3 containers of product from overseas in the first three months of 2012 compared with receiving 2 containers of product from overseas in the first three months of 2011. Bad debts expense decreased by $19,000 for the three months ended March 31, 2012 compared to the three months ended March 31, 2011 due to the bankruptcy of a large customer in the first three months of 2011 and no additional reserve against bad debts being needed in the first three months of 2012. Payroll expense decreased by $6,579 in the three months ended March 31, 2012 compared to the three months ended March 31, 2011, due to a staff reduction of 2.5 full-time equivalent employees in the second half of 2011, which reduced payroll by approximately $25,000 for the three months ending March 31, 2012, partially offset by approximately $13,400 more payroll charged to Research and Development for the three months ending March 31, 2011, which is consistent with the Company's Research and Development polices, and due to temporary labor increase in the first three months of 2012 of approximately $5,000.

Research and development expenses increased $33,127 to $51,348 for the three months ended March 31, 2012, compared to $18,221 for the three months ended March 31, 2011. Increased Research and Development expense has resulted from an increase in testing of our patented "ButtKicker Live!" broadcast technology.

Loss from operations increased by $163,738 or 227% for the three months ended March 31, 2012 to $236,004 as compared to $72,266 for the three months ended March 31, 2011. The increase was caused primarily by the increase of approximately $135,000 in stock warrant as shown on the table above.

Interest expense decreased $34,852 or 38%, to $57,736 for the three months ended March 31, 2012, compared to interest expense of $92,588 for the three months ended March 31, 2011. The decrease was due primarily to the conversion of debt to equity as illustrated in Notes to the financial statements, Note number 7.

Our net loss increased $128,933 for the three months ended March 31, 2012. We had net loss of $293,740 (or basic and diluted net loss per share of $0.005) for the three months ended March 31, 2012, compared to net loss of $164,807 (or basic and diluted net loss per share of $0.003) for the three months ended March 31, 2011. The increase in net loss was attributable to the increase in stock warrant expense, professional fees and research and development partially offset by the decrease in interest expense, bad debts and other general and administrative expenses.

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

                                               March 31,       December 31,
                                                  2012             2011
Net Loss                                       $ (293,740 )   $     (164,807
Adjustments
Interest expense                                   57,736             92,588
Depreciation and Amortization                       3,194              4,056
Taxes                                                   -                  -
EBITDA                                           (232,810 )          (68,163 )
Less non-cash expenses from:
Stock Warrant expense                             134,711                  -
Payment of stock and warrants to consultants       70,000                  -
Employee stock option expense                       4,784                  -
Adjusted EBITDA                                $  (23,315 )   $      (68,163 )

EBITDA decreased $164,647 or 241% to $(232,810) for the three months ended March 31, 2012, compared to EBITDA of $(68,163) for the three months ended March 31, 2011. The decrease in 2012 EBITDA was the result of non-cash items, specifically, the increase in stock warrant expense and consultant fees paid with stock and warrants as mentioned above offset partially by the drop in interest expense.

Adjusted EBITDA, increased $44,848 or 66% to $(23,315) for the three months ended March 31, 2012, compared to EBITDA, net of above listed non-cash items of $(68,163) for the three months ended March 31, 2011. The increase in EBITDA, net of above listed non-cash items was primarily attributable to an increase in revenue and gross profit and a decrease in interest expense offset partially by an increase in research and development.

Liquidity and Capital Resources

Total current assets were $427,374 as of March 31, 2012, consisting of cash of $116,642, net accounts receivable of $144,992, inventory of $163,667 and other current assets of $2,073.

Total current liabilities were $3,088,165 as of March 31, 2012, consisting of accounts payable of $852,941, accrued expenses of $392,511, current maturities of long-term debt of $1,670,275 and other current liabilities of $172,438.

As of March 31, 2012, we had a working capital deficit of $2,660,791.

Cash Flows during the Three Months Ended March 31, 2012

During the three months ended March 31, 2012 we had a net increase in cash and cash equivalents of $61,510 primarily consisting of net cash provided by financing activities of $353,768 and net cash used by operating activities of $290,527.

Net cash used by operating activities was $290,527 for the three months ended March 31, 2012, consisting of an increase in: accounts receivable of $143,873, inventory of $107,440, accounts payable and accrued expenses of $38,029, and decreases in: prepaid expenses of $64,759, and deferred revenue of $66,324. These changes were reduced by net loss of $293,740 which had adjustments for depreciation and amortization of $8,537, stock-based compensation of $70,000, warrants issued in connection with debt requirements of $134,741 and employee stock options of $4,784.

Net Cash used by investing activities was $1,731 for the three months ended March 31, 2012, consisting of the purchase of equipment.

Net cash provided by financing activities was $353,768 for the three months ended March 31, 2012, consisting of net proceeds from the sale of stock and warrants of $375,000 and the proceeds of debt of $831, reduced by the payment of debt of $22,063.

The Company also expects to need approximately $1,700,000 of cash to purchase inventory: $1,200,000 within the next six months and $500,000 more within the next year.

The Company historically has incurred net losses, negative cash flows from operating activities, and has an accumulated deficit of approximately $7.1 million at March 31, 2012. In addition, at March 31, 2012 the Company had a cash balance of approximately $117,000 and working capital deficiency of approximately $2.7 million. 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 or 2011, $250,000 in the fourth quarter of 2011, $375,000 in the first quarter of 2012, and an additional $585,000 so far in the second quarter of 2012. The Company forecasts that it will become operationally cash flow positive by the end of the fourth quarter of 2012, assuming the Company raises an additional capital of $670,000 through the timely sales of stock. The Company believes that the receipt of private placement equity will enable it to increase sales by purchasing adequate inventory to meet its existing sales demand and to be able to fulfill its backordered sales. 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.

We estimate that for the next 12 months we will need $1.7 million for debt service, and approximately $1.7 million for inventory purchases for a total of approximately $3.4 million.

If the Company is successful in raising significant additional capital (of which there is no assurance), the Company intends to increase its budgets for advertising and marketing, targeting consumers who have shown an interest in the Company's or similar products. Additionally, the Company intends to increase its advertising and marketing expense with key resellers and partners such as large online resellers and international distributors. The Company also intends to hire one or more sales people to sell the Company's products to key markets including the home theater, commercial cinema and international markets.

We believe the combination of increased advertising and marketing spending combined with more sales people can increase our product's awareness, therefore increasing demand for our products and allowing the Company to have sales staff to secure more sales.

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 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. Our auditors issued a going concern opinion on the Audited Financial Statements for the year ended December 31, 2011, meaning that there is substantial doubt that we can continue as a going concern for the next 12 months unless additional funding is secured for the Company.