UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-KSB [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2003 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 Commission file number: 000-31671 GLOBALWISE INVESTMENTS, INC. ---------------------------------------------------- (Exact name of registrant as specified in its charter) Nevada 87-0613716 - ------------------------------ ----------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2157 S. Lincoln Street, Salt Lake City, Utah 84106 - -------------------------------------------- -------- (Address of principal executive offices) (Zip code) Issuer's telephone number, including area code: (801) 323-2395 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock Check whether the issuer (1) 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 [ ] Check if disclosure of delinquent filers in response to item 405 of Regulation S-B is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [X] State issuer's revenue for its most recent fiscal year: None As of February 20, 2004, the registrant had 802,000 shares of common stock outstanding. Since the registrant does not have an active trading market, a market value of the voting stock held by non-affiliates cannot be determined. Documents incorporated by reference: None Transitional Small Business Disclosure Format (check one): Yes [ ] No [X] TABLE OF CONTENTS PART I Item 1. Description of Business............................................3 Item 2. Description of Property............................................6 Item 3. Legal Proceedings..................................................6 Item 4. Submission of Matters to a Vote of Security Holders................6 PART II Item 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchase of Securities..................................6 Item 6. Plan of Operation..................................................7 Item 7. Financial Statements...............................................7 Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure..........................................18 Item 8A. Controls and Procedures...........................................18 PART III Item 9. Directors, Executive Officers, Promoters and Control Persons, Compliance with Section 16(a) of the Exchange Act.................18 Item 10. Executive Compensation............................................19 Item 11. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters........................19 Item 12. Certain Relationships and Related Transactions....................20 Item 13. Exhibits and Reports on Form 8-K..................................20 Item 14. Principal Accountant Fees and Services............................20 Signatures.................................................................21 FORWARD LOOKING STATEMENTS In this annual report references to "Globalwise," "we," "us," and "our" refer to Globalwise Investments, Inc.. This annual report contains certain forward-looking statements and for this purpose any statements contained in this annual report that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "estimate" or "continue" or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within Globalwise's control. These factors include but are not limited to economic conditions generally and in the industries in which Globalwise may participate; competition within Globalwise's chosen industry, including competition from much larger competitors; technological advances and failure by Globalwise to successfully develop business relationships. 2 PART I ITEM 1: DESCRIPTION OF BUSINESS Business Development Globalwise Investments, Inc. was incorporated in the state of Utah on October 3, 1997, to engage in the confectionary vending machine business. In June 2000 we sold all of the assets and liabilities of our vending machine business. On July 12, 2000, Globalwise Investments, Inc. was incorporated in the state of Nevada and on July 21, 2000, Globalwise Utah merged with Globalwise Nevada for the sole purpose of changing our domicile from the state of Utah to the state of Nevada. Our Plan We are a "blank check" company and have had recurring operating losses for the past two fiscal years. Our independent auditors have expressed doubt that we can continue as a going concern unless we obtain financing to continue operations. Our business plan is to seek, investigate, and, if warranted, acquire an interest in a business opportunity to create necessary operating revenue. Our acquisition of a business opportunity may be made by merger, exchange of stock, or otherwise. We have very limited sources of capital, and we probably will only be able to take advantage of one business opportunity. At the present time we have not identified any business opportunity that we plan to pursue, nor have we reached any preliminary or definitive agreements or understandings with any person concerning an acquisition or merger. Based on current economic and regulatory conditions, management believes that it is possible, if not probable, for a company like ours, without many assets or liabilities, to negotiate a merger or acquisition with a viable private company. The opportunity arises principally because of the high legal and accounting fees and the length of time associated with the registration process of "going public." However, should any of these conditions change, it is very possible that there would be little or no economic value for anyone taking over control of Globalwise. In the event we merge or acquire a business opportunity, the successor company will be subject to our reporting obligations. This is commonly referred to as a "back door registration." A back door registration occurs when a non-reporting company becomes the successor of a reporting company by merger, consolidation, exchange of securities, acquisition of assets or otherwise. Pursuant to the Securities and Exchange Commission ("SEC") regulations, this type of event requires the successor company to provide the same kind of information that would appear in a registration statement in a current report on Form 8-K, including audited and pro forma financial statements. Accordingly, we may incur additional expense to conduct due diligence and present the required information for the business opportunity in any report. Also, the SEC may elect to conduct a full review of the successor company and may issue substantive comments on the sufficiency of disclosure related to the business opportunity. Our search for a business opportunity will not be limited to any particular geographical area or industry, including both United States and international companies. Our management has unrestricted discretion in seeking and participating in a business opportunity, subject to the availability of such opportunities, economic conditions and other factors. Our management believes that companies who desire a public market to enhance liquidity for current stockholders, or plan to acquire additional assets through issuance of securities rather than for cash will be potential merger or acquisition candidates. The selection of a business opportunity in which to participate is complex and extremely risky and will be made by management in the exercise of its business judgement. There is no assurance that we will be able to identify and acquire any business opportunity which will ultimately prove to be beneficial to us and our stockholders. Should a merger or acquisition prove unsuccessful, it is possible management may decide not to pursue further acquisition activities and management may abandon its activities and we may become dormant or be dissolved. Our activities are subject to several significant risks which arise primarily as a result of the fact that we have no specific business and may acquire or participate in a business opportunity based on the decision of management 3 which will, in all probability, act without consent, vote, or approval of our stockholders. It is possible that the range of business opportunities that might be available for consideration by us could be limited by impact of the SEC regulations regarding purchase and sale of "penny stock." Our common stock is listed on the OTC Bulletin Board, but there is little market activity at this time. We cannot assure that a market will develop or that a stockholder ever will be able to liquidate his investments without considerable delay, if at all. If a market develops, our shares will likely be subject to the rules of the Penny Stock Suitability Reform Act of 1990. The liquidity of penny stock is affected by specific disclosure procedures required by this Act to be followed by all broker-dealers, including but not limited to, determining the suitability of the stock for a particular customer, and obtaining a written agreement from the customer to purchase the stock. This rule may affect the ability of broker-dealers to sell our securities and may affect the ability of purchasers to sell our securities in any market. Investigation and Selection of Business Opportunities We anticipate that business opportunities will come to our attention from various sources, including our officers and directors, our stockholders, professional advisors, such as attorneys and accountants, securities broker-dealers, investment banking firms, venture capitalists, members of the financial community and others who may present unsolicited proposals. Management expects that prior personal and business relationships may lead to contacts for business opportunities; however, we have not entered into any direct or indirect negotiations at the time of this filing with any person, corporation or other entity regarding any possible business reorganization involving Globalwise. Our management will analyze the business opportunities; however, none of our management are professional business analysts. (See, Part III, Item 9: Directors, Executive Officers, . . . ") Potential investors must recognize that due to our management's inexperience we may not adequately evaluate a potential business opportunity. Our management has had limited experience with mergers and acquisitions of business opportunities and has not been involved with an initial public offering. Mr. Mayer, our President, has been involved with one prior merger in 1999 as a director and officer of a blank check reporting company. The merger was structured as a stock-for-stock exchange and Mr. Mayer resigned as a director and officer upon consummation of the merger. Certain conflicts of interest exist or may develop between Globalwise and our officers and directors. Our management has other business interests to which they currently devote attention, which include their primary employment and management of other blank check reporting companies. They may be expected to continue to devote their attention to these other business interests although management time should be devoted to our business. As a result, conflicts of interest may arise that can be resolved only through their exercise of judgement in a manner which is consistent with their fiduciary duties to us. In particular, our officers and directors are directors of other blank check companies with a structure and a business plan which is identical to ours and, they may, in the future, be involved with other blank check companies. In the process of negotiations for an acquisition or merger or determination of consulting fees related to investigation of a business opportunity, our principal stockholders and management may consider their own personal pecuniary benefit or the interests of other blank check companies they are affiliated with rather than the best interests of Globalwise's other stockholders. We presently do not foresee entering into a merger or acquisition transaction with any business with which our officers or directors are currently affiliated. If we determine in the future that a transaction with an affiliate would be in our best interest we are permitted by Nevada law to enter into such a transaction if: (1) The material facts regarding the relationship or interest of the affiliate in the contract or transaction are disclosed or are known to the board of directors. The board authorizes the contract or transaction by the affirmative vote of a majority of the disinterested directors, even though the disinterested directors constitute less than a quorum; or (2) The material facts regarding the relationship or interest of the affiliate in the contract transaction are disclosed or are known to the stockholders entitled to vote on the transaction, and the contract or transaction is specifically approved by vote of the stockholders; or (3) The contract or transaction is fair to us at the time it is authorized, approved or ratified by the board of directors or the stockholders. 4 A decision to participate in a specific business opportunity may be made upon our management's analysis of the quality of the other company's management and personnel, the anticipated acceptability of the business opportunity's new products or marketing concept, the merit of its technological changes, the perceived benefit that it will derive from becoming a publicly held entity, and numerous other factors which are difficult, if not impossible, to analyze through the application of any objective criteria. In many instances, we anticipate that the historical operations of a specific business opportunity may not necessarily be indicative of the potential for the future because of the possible need to shift marketing approaches substantially, expand significantly, change product emphasis, change or substantially augment management, or make other changes. We will be dependent upon the owners of a business opportunity to identify any such problems which may exist and to implement, or be primarily responsible for the implementation of, required changes. In our analysis of a business opportunity we anticipate that management will consider, among other things, the following factors: (1) Potential for growth and profitability, indicated by a new technology, anticipated market expansion, or new products; (2) Our perception of how any particular business opportunity will be received by the investment community and by our stockholders; (3) Whether, following the business combination, the financial condition of the business opportunity would be, or would have a significant prospect in the foreseeable future of becoming sufficient to enable our securities to qualify for listing on a exchange or on a national automated securities quotation system, such as NASDAQ. (4) Capital requirements and anticipated availability of required funds, to be provided by us or from operations, through the sale of additional securities, through joint ventures or similar arrangements, or from other sources; (5) The extent to which the business opportunity can be advanced; (6) Competitive position as compared to other companies of similar size and experience within the industry segment as well as within the industry as a whole; (7) Strength and diversity of existing management, or management prospects that are scheduled for recruitment; (8) The cost of our participation as compared to the perceived tangible and intangible values and potential; and (9) The accessibility of required management expertise, personnel, raw materials, services, professional assistance, and other required items. No one factor described above will be controlling in the selection of a business opportunity. Management will attempt to analyze all factors appropriate to each opportunity and make a determination based upon reasonable investigative measures and available data. Potentially available business opportunities may occur in many different industries and at various stages of development. Thus, the task of comparative investigation and analysis of such business opportunities will be extremely difficult and complex. Potential investors must recognize that, because of our limited capital available for investigation and management's limited experience in business analysis, we may not discover or adequately evaluate adverse facts about the opportunity to be acquired. Form of Acquisition We cannot predict the manner in which we may participate in a business opportunity. Specific business opportunities will be reviewed as well as our needs and desires and those of the promoters of the opportunity. The legal structure or method deemed by management to be suitable will be selected based upon our review and our relative negotiating 5 strength. Such methods may include, but are not limited to, leases, purchase and sale agreements, licenses, joint ventures and other contractual arrangements. We may act directly or indirectly through an interest in a partnership, corporation or other forms of organization. We may be required to merge, consolidate or reorganize with other corporations or forms of business organizations. In addition, our present management and stockholders most likely will not have control of a majority of our voting shares following a merger or reorganization transaction. As part of such a transaction, our existing directors may resign and new directors may be appointed without any vote by our stockholders. We likely will acquire our participation in a business opportunity through the issuance of common stock or other securities. Although the terms of any such transaction cannot be predicted, it should be noted that issuance of additional shares might also may be done simultaneously with a sale or transfer of shares representing a controlling interest by current principal stockholders. Competition We expect to encounter substantial competition in our effort to locate attractive opportunities. Business development companies, venture capital partnerships and corporations, venture capital affiliates of large industrial and financial companies, small investment companies, and wealthy individuals will be our primary competition. Many of these entities will have significantly greater experience, resources and managerial capabilities than we do and will be in a better position than we are to obtain access to attractive business opportunities. We also will experience competition from other public "blank check" companies, many of which may have more funds available. Employees We currently have no employees. Our management expects to confer with consultants, attorneys and accountants as necessary. We do not anticipate a need to engage any full-time employees so long as we are seeking and evaluating business opportunities. ITEM 2: DESCRIPTION OF PROPERTY We do not currently own or lease any property. Until we pursue a viable business opportunity and recognize income, we will not seek independent office space. ITEM 3: LEGAL PROCEEDINGS We are not a party to any proceedings or threatened proceedings as of the date of this filing. ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS We have not submitted a matter to a vote of our shareholders during the fourth quarter of the 2003 fiscal year. PART II ITEM 5: MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASE OF SECURITIES Market Information Our common stock was listed on the OTC Bulletin Board on March 12, 2002, under the symbol "GWIV." We have had little market activity in our stock as of this filing. The following table presents the range of the high and low bids of our stock as reported by the OTC Bulletin Board Historical Data Service. We did not have bid information available until the second quarter of the year ended December 31, 2003. These quotations represent prices between dealers and may not include retail markups, markdowns, or commissions and may not necessarily represent actual transactions. 6 Year Quarter Ended High Low ---- ------------- ----- ----- 2003 March 31 $ 0.0 $ 0.0 June 30 0.1 0.0 September 30 0.1 0.1 December 31 0.1 0.0 Holders and Dividends As of February 20, 2004, we had approximately 35 stockholders of record. We have not declared dividends on our common stock and do not anticipate paying dividends on our common stock in the foreseeable future. Recent Sales of Unregistered Securities We have not sold our common shares without registration during the past year. Issuer Purchase of Securities None. ITEM 6: PLAN OF OPERATION We have no assets and have experienced losses from inception. During the next twelve months our management intends to actively seek an operating company to acquire or merge with which will create necessary operating revenue. We currently cannot satisfy our cash requirements for our operations. The majority of our operating expenses are related to our reporting obligations under the Exchange Act. These expenses are related to legal, accounting and professional services required to prepare our reports and the costs of filing the reports with the SEC. We are unable to pay cash for these services and have relied on related and third parties to pay for these costs on our behalf. These parties have not entered into written agreements guaranteeing advances and, therefore, these parties are not obligated to provide funds in the future. However, management anticipates that these parties will continue to pay for these costs on our behalf during the next twelve months. Historically, we have paid for these advances by converting the debt into common stock. If we obtain a business opportunity, then it may be necessary to raise additional capital. We likely will sell our common stock to raise this additional capital. We expect to issue such stock pursuant to exemptions provided by federal and state securities laws. The purchasers and manner of issuance will be determined according to our financial needs and the available exemptions. We do not currently intend to make a public offering of our stock. We also note that if we issue more shares of our common stock, then our shareholders may experience dilution in the value per share of their common stock. ITEM 7: FINANCIAL STATEMENTS 7 Globalwise Investments, Inc. Financial Statements December 31, 2003 and 2002 8 CONTENTS Independent Auditor's Report ...............................................3 Balance Sheets .............................................................4 Statements of Operations ...................................................5 Statements of Stockholders' Equity .........................................6 Statements of Cash Flows ...................................................7 Notes to the Financial Statements ..........................................8 9 CHISHOLM, BIERWOLF & NILSON Certified Public Accountants A Limited Liability 533 W. 2600 S., Suite 250 Office (801) 292-8756 Company Bountiful, Utah 84010 Fax (801) 292-8809 ______________________________________________________________________________ INDEPENDENT AUDITOR'S REPORT To the Board of Directors and Stockholders of Globalwise Investments, Inc.: We have audited the accompanying balance sheets of Globalwise Investments, Inc. (a development stage company) as of December 31, 2003 and 2002 and the related statements of operations, stockholders' equity and cash flows for the years ended December 31, 2003 and 2002 and from inception October 3, 1997 through December 31, 2003. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Globalwise Investments, Inc. (a development stage company) as of December 31, 2003 and 2002 and the results of its operations and cash flows for the years ended December 31, 2003 and 2002 and from inception October 3, 1997 through December 31, 2003 in conformity with generally accepted accounting principles in the United States of America. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses from operations which raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Chisholm, Bierwolf & Nilson Chisholm, Bierwolf & Nilson Bountiful, Utah January 13, 2004 3 Globalwise Investments, Inc. (A Development Stage Company) Balance Sheets ASSETS December 31 2003 2002 ------------- ------------- CURRENT ASSETS Cash $ - $ - ------------- ------------- Total Assets $ - $ - ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts Payable $ 26,345 $ 26,345 ------------- ------------- Total Liabilities 26,345 26,345 ------------- ------------- STOCKHOLDERS' EQUITY Common Stock, $.001 par value; 50,000,000 shares authorized; 802,000 shares issued and outstanding 802 802 Additional Paid in Capital 27,542 27,542 Deficit Accumulated during the development stage (54,689) (54,689) ------------- ------------- Total Stockholders' Equity (deficit) (26,345) (26,345) ------------- ------------- Total Liabilities and Stockholders' Equity $ - $ - ============= ============= The accompanying notes are an integral part of these financial statements -4- Globalwise Investments, Inc. (A Development Stage Company) Statement of Operations From Inception on October 3, For the Years Ended 1997 to December 31 Dec. 31, 2003 2002 2003 ------------- ------------ ------------- REVENUES $ - $ - $ - ------------- ------------ ------------- EXPENSES General & Administrative - 5,000 54,689 ------------- ------------ ------------- Total Expenses - 5,000 54,689 ------------- ------------ ------------- Net Loss $ - $ (5,000) $ (54,689) ============= ============ ============= Net Loss Per Share $ (0.00) $ (0.00) $ (0.08) ============= ============ ============= Weighted average shares outstanding 802,000 802,000 696,484 ============= ============ ============= The accompanying notes are an integral part of these financial statements -5- Globalwise Investments, Inc. (A Development Stage Company) Statements of Stockholders' Equity From Inception on October 3, 1997 through December 31, 2003 Deficit Accumulated Additional During the Common Stock Paid in Development Shares Amount Capital Stage ------------- ----------- ----------- ------------ Balance, October 3, 1997 - $ - $ - $ - Shares issued for equipment at $0.064 per share 300,000 300 18,800 - Net (loss) for the year ended December 31, 1997 - - - - ------------- ----------- ----------- ------------ Balance - December 31, 1997 300,000 300 18,800 - Capital Contributions - - 550 - Net (loss) for the year ended December 31, 1998 - - - (550) ------------- ----------- ----------- ------------ Balance - December 31, 1998 300,000 300 19,350 (550) Shares issued for cash at $0.0996 per share 652,000 652 64,348 - Capital Contributions - - 6,000 - Net (loss) for the year ended December 31, 1999 - - - (27,794) ------------- ----------- ----------- ------------ Balance - December 31, 1999 952,000 952 89,698 (28,344) Cancellation of shares in connection with spin-off of Assets and Liabilities of the Company (150,000) (150) (62,156) - Shares issued for services at $.25 per share 20,000 20 4,980 - Shares issued for services at $.536 per share 28,000 28 14,972 - Net (loss) for the year ended December 31, 2000 - - - (21,345) ------------- ----------- ----------- ------------ Balance - December 31, 2000 850,000 850 47,494 (49,689) Cancellation of shares issued for services in 2000 (48,000) (48) (19,952) - Net (loss) for the year ended December 31, 2001 - - - - ------------- ----------- ----------- ------------ Balance - December 31, 2001 802,000 802 27,542 (49,689) Net (loss) for the year ended December 31, 2002 - - - (5,000) ------------- ----------- ----------- ------------ Balance - December 31, 2002 802,000 802 27,542 (54,689) Net (loss) for the year ended December 31, 2003 - - - - ------------- ----------- ----------- ------------ Balance - December 31, 2003 802,000 $ 802 $ 27,542 $ (54,689) ============= =========== =========== ============ The accompanying notes are an integral part of these financial statements -6- Globalwise Investments, Inc. (A Development Stage Company) Statement of Cash Flows From Inception on October 3, For the Years Ended 1997 Through December 31 December 31, 2003 2002 2003 ------------- ----------- ------------- Cash Flows from Operating Activities Net Loss $ - $ (5,000) $ (54,689) Adjustments for non-cash items: Capital contributions - expenses - - 6,550 Shares issued for services - - - Increase in Inventory - - (21,744) Increase (decrease) in accounts payable - 5,000 26,944 ------------- ----------- ------------- Net Cash Provided (Used) by Operating Activities - - (42,939) ------------- ----------- ------------- Cash Flows from Investing Activities Purchase of equipment - - (20,530) Loss of cash in spin-off - - (1,531) ------------- ----------- ------------- Net Cash Provided (Used) in Investing Activities - - (22,061) ------------- ----------- ------------- Cash Flows from Financing Activities Proceeds from stock issuance - - 65,000 ------------- ----------- ------------- Net cash Provided by Financing Activities - - 65,000 ------------- ----------- ------------- Increase (Decrease) in Cash - - - Cash and Cash Equivalents, Beginning of Period - - - ------------- ----------- ------------- Cash and Cash Equivalents, End of Period $ - $ - $ - ============= =========== ============= Supplemental Cash Flow Information: Stock issued for services $ - $ - $ 20,000 Cash Paid For: Interest $ - $ - $ - Income Taxes $ - $ - $ - The accompanying notes are an integral part of these financial statements -7- Globalwise Investments, Inc. (A Development Stage Company) Notes to the Financial Statements December 31, 2003 and 2002 NOTE 1 - Summary of Significant Accounting Policies a. Organization & Consolidation Policy Globalwise Investments, Inc. (the Company), a Nevada corporation, was incorporated October 3, 1997. The Company was organized for the purpose of engaging in the confectionary vending machine business. b. Recognition of Revenue The Company recognizes income and expense on the accrual basis of accounting. c. Earnings (Loss) Per Share Income (loss) Shares Per Share (Numerator) (Denominator) Amount ------------- ------------- ----------- For the year ended December 31, 2003: Basic EPS Income (loss) to common stockholders $ - 802,000 $ (0.00) ============= ============= =========== For the year ended December 31, 2002: Basic EPS Income (loss) to common stockholders $ (5,000) 802,000 $ (0.01) ============= ============= =========== From inception on October 3, 1997 to December 31, 2003: Basic EPS Income (loss) to common stockholders $ (54,689) 696,484 $ (0.08) ============= ============= =========== The computation of earnings per share of common stock is based on the weighted average number of shares outstanding at the date of the financial statements. d. Cash and Cash Equivalents The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. -8- Globalwise Investments, Inc. (A Development Stage Company) Notes to the Financial Statements December 31, 2003 and 2002 NOTE 1 - Summary of Significant Accounting Policies (continued) e. Provision for Income Taxes No provision for income taxes have been recorded due to net operating loss carryforwards totaling approximately $54,689 that will be offset against future taxable income. These NOL carryforwards begin to expire in the year 2018. No tax benefit has been reported in the financial statements because the Company believes there is a 50% or greater chance the carryforward will expire unused. Deferred tax asset and the valuation account is as follows at December 31, 2003 and 2002: December 31, 2003 2002 ------------ ------------ Deferred tax asset: NOL carryforward $ 15,900 $ 15,900 Valuation allowance ( 15,900) ( 15,900) ------------ ------------ $ - $ - ============ ============ f. Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE 2 - Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has no assets and has had recurring operating losses for the past several years and is dependent upon financing to continue operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. It is management's plan to find an operating company to merge with, thus creating necessary operating revenue. -9- Globalwise Investments, Inc. (A Development Stage Company) Notes to the Financial Statements December 31, 2003 and 2002 NOTE 3 - Spin-off In March, 2000, the Company exchanged all of its assets and liabilities for 150,000 shares of its previously issued common stock. The shares were subsequently canceled. NOTE 4 - Stock Cancellation The Company and stockholders have elected to cancel stock that was issued in July, 2000 in lieu of payment for costs and services. 48,000 shares were canceled which had been issued for services and costs valued at $20,000. The liability has been re-established in the Accounts Payable - related parties section of the balance sheet. NOTE 5 - Development Stage Company The Company is a development stage company as defined in Financial Accounting Standards Board Statement No. 7. It is concentrating substantially all of its efforts in raising capital and searching for a business operation with which to merge, or assets to acquire, in order to generate significant operations. NOTE 6 - Related Party Transactions During previous years, the Company incurred $21,345 of professional fees payable to First Equity Holdings Corp (formerly Mutual Ventures Corp.) An officer of the Company was an employee of First Equity Holdings Corp. -10- ITEM 8: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE In our current report dated February 9, 2004, we reported that our independent auditors, Chisholm & Associates, Certified Public Accountants, resigned as our independent auditors and we engaged Chisholm, Bierwolf & Nilson, LLC. ITEM 8A: CONTROLS AND PROCEDURES Our President, who acts in the capacity of principal executive officer and principal financial officer, has reevaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report and determined that there continued to be no significant deficiencies in these procedures. Also, there were no changes made or corrective actions to be taken related to our internal control over financial reporting. PART III ITEM 9: DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS, COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE Directors and Executive Officers Our executive officers and directors and their respective ages, positions, and biographical information are set forth below. Our bylaws require two directors who serve until our next annual meeting or until each is replaced by a qualified director. Our executive officers are chosen by our board of directors and serve at its discretion. There are no existing family relationships between or among any of our executive officers or directors. Name Age Position Held Director Since - ------ ---- ------------- -------------- Donald R. Mayer 64 President, Director July 2000 Linda L. Perry 59 Secretary/Treasurer, Director July 2001 Donald R. Mayer - Mr. Mayer is the President and a director of Universal Business Insurance, an insurance company that he founded. He has worked in the insurance industry for over twenty years, specializing in the motel/hotel industry. He is a director of WorldNet, Inc. of Nevada, a blank check reporting company. He graduated from the University of Utah, located in Salt Lake City, Utah, with a bachelors degree in accounting. Linda L. Perry - Mrs. Perry serves as President of Business Builders, Inc., a privately held business consulting firm which she co-founded in 1997. She also serves as a Director of Wings & Things, Inc., a reporting company. She attended Weber State College, located in Ogden, Utah. Audit Committee Financial Expert Because we have minimal operations we do not have an audit committee serving at this time, thus we do not have an audit committee financial expert serving on an audit committee. Compliance with Section 16(a) of the Exchange Act. Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers and persons who own more than five percent of a registered class of our equity securities, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of common stock and our other equity securities. Officers, directors and greater than ten-percent beneficial owners are required by SEC regulations to furnish us with copies of all Section 16(a) reports they file. Based upon review of the copies of such forms furnished to us during the fiscal year ended December 31, 2003, and representations to us that no Forms 5 were required, we believe no reports were required to be filed for the year ended December 31, 2003. Code of Ethics Due to the fact that we have minimal operations, we have not adopted a code of ethics for our principal executive 19 and financial officers. Our board of directors will revisit this issue in the future to determine if adoption of a code of ethics is appropriate. In the meantime, our management intends to promote honest and ethical conduct, full and fair disclosure in our reports to the SEC, and compliance with applicable governmental laws and regulations. ITEM 10: EXECUTIVE COMPENSATION None of our named executive officers received any cash compensation, bonuses, stock appreciation rights, long term compensation, stock awards or long-term incentive rights in excess of $100,000 from us during the past three fiscal years. Mr. Mayer, our President, who acts in the capacity of chief executive officer did not receive compensation during the year ended December 31, 2003. We have not entered into employment contracts with our executive officers and their compensation, if any, will be determined at the discretion of our board of directors. Compensation of Directors We do not have any standard arrangement for compensation of our directors for any services provided as director, including services for committee participation or for special assignments. ITEM 11: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The following table sets forth the beneficial ownership of our outstanding common stock by our management and each person or group known by us to own beneficially more than 5% of our outstanding common stock. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Except as indicated by footnote, the persons named in the table below have sole voting power and investment power with respect to all shares of common stock shown as beneficially owned by them. The percentage of beneficial ownership is based on 802,000 shares of common stock outstanding as of February 20, 2004. CERTAIN BENEFICIAL OWNERS Name and Address of Number of Shares of Beneficial Owners Common Stock Percentage of Class - ---------------------------- --------------- ------------------- Aaron Nelson 50,000 (1) 6.2% 5710 E. Tropicana #2023 Las Vegas, Nevada 89122 Brent Nelson 150,000 18.7% 1238 Thames Ct. Salt Lake City, Utah 84123 (1) Includes 25,000 shares held by spouse. MANAGEMENT Name and Address of Number of Shares of Beneficial Owners Common Stock Percentage of Class - -------------------- ------------- ------------------- Donald R. Mayer 7,500 Less than 1% 6360 South 3000 East #205 Salt Lake City, Utah 84121 Securities Under Equity Compensation Plans We do not have any securities authorized for issuance under any equity compensation plans. 20 ITEM 12: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS We have not engaged in any transactions in excess of $60,000 during the past two years involving our executive officers, directors, 5% or more stockholders or immediate family members of such persons. ITEM 13: EXHIBITS AND REPORTS ON FORM 8-K Exhibits 3.1 Articles of Incorporation, as amended (Incorporated by reference to exhibit 3.1 of Form 10-QSB, filed October 11, 2001) 3.2 Bylaws of Globalwise (Incorporated by reference to exhibit 3.3 of Form 10-SB, filed October 2, 2000.) 31.1 Principal Executive Officer Certification 31.2 Principal Financial Officer Certification 32.1 Section 1350 Certification Reports on Form 8-K On February 13, 2004, we filed a current report on Form 8-K, dated February 9, 2004, under Item 4 related to a change of our independent auditor. ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES Our former independent auditor, Chisholm & Associates, Certified Public Accountants, billed an aggregate of $1,015 for the year ended December 31, 2002 and $1,169 for the year ended December 31, 2003 for professional services rendered for the audit of our annual financial statements and review of the financial statements included in our quarterly reports. Our independent auditor has not billed us for any audit-related fees, tax fees or other fees for the past two fiscal years. We do not have an audit committee and as a result our entire board of directors performs the duties of an audit committee. Our board of directors will approve in advance the scope and cost of the engagement of an auditor before the auditor renders audit and non-audit services. As a result, we do not rely on pre-approval policies and procedures. 21 SIGNATURES In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: March 12, 2004 GLOBALWISE INVESTMENTS, INC. /s/ Donald R. Mayer By: ___________________________________________ Donald R. Mayer President and Director Principal Executive and Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934. This report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. /s/ Linda L. Perry Date: March 12, 2004 By: ___________________________________________ Linda L. Perry Secretary/Treasurer and Director 22