Exhibit 99.1

 

 

GlobalWise Investments, Inc.

Columbus, Ohio

www.GlobalWiseInvestments.com

614-388-8909

Contact@GlobalWiseInvestments.com

 

Mission Investor Relations

Atlanta, Georgia

http://www.MissionIR.com

404-941-8975

Investors@MissionIR.com

 

 

 GlobalWise Reports Third Quarter 2012 Financial Results and Provides Revised Fiscal 2012 Guidance

 

-- Achieves 15% Revenue Growth and 23% Increase in Gross Profit Over the Year-Ago Third Quarter --

-- Achieves 36% Revenue Growth and 43% Increase in Gross Profit Over the Year-Ago Nine Month Period ended September 30, 2011 --

 

 

COLUMBUS, OH, November 15, 2012 – GlobalWise Investments, Inc. (OTCBB: GWIV) (OTCQB: GWIV) (www.GlobalWiseInvestments.com) and its wholly owned subsidiary Intellinetics, Inc., an enterprise content management (“ECM”) software development, sales and marketing company serving both public and private sector clients, today announce financial results for the third quarter and nine months ended September 30, 2012.

 

Financial Highlights for the Third Quarter ended September 30, 2012:

 

oTotal revenue increased by 15% to $711,737 compared to $617,026 in the year-ago third quarter;
oGross profit improved to $484,205, a 23% increase over the year-ago third quarter of $395,104;
oGross profit margin increased to 68% compared to 64% in the year-ago third quarter;
oOperating expenses, excluding non-recurring and non-cash expenses totaling $206,800, increased to $682,976 from $438,821 in the year-ago third quarter; and
oAdjusted EBITDA (as defined below) for the third quarter was ($192,034) compared to ($34,569) in the year-ago third quarter.

 

Financial Highlights for the Nine Months ended September 30, 2012:

 

oTotal revenue increased 36% to $1,959,350 compared to $1,438,203 in the year-ago nine month period;
oGross profit improved by 43% to $1,137,709 compared to $794,748 in the year-ago nine month period;
oGross profit margin increased to 58% compared to 55% in the year-ago nine month period;
oOperating expenses, excluding non-recurring and non-cash expenses totaling $987,800, increased to $1,730,945 compared to $1,228,510 in the year-ago nine month period; and
oAdjusted EBITDA (as defined below) for the nine months ended September 30, 2012, was ($572,062) compared to ($403,481) in the year-ago nine month period.

 

“Excluding non-recurring and non-cash charges, our operating expenses were materially unchanged in the third quarter 2012 vs. the second quarter 2012 at around $680,000,” stated William J. “BJ” Santiago, CEO of GlobalWise. “We expect operating expenses to remain relatively stable at current levels as revenue increases. We’re seeing a continued increase in channel partner sales activity and are currently on track to achieve steady revenue growth in the fourth quarter.”

 

Revised Fiscal Year 2012 Guidance:

 

Based upon the Company’s current sales funnel and recent Channel Partner activity, GlobalWise currently expects annual revenue in 2012 to be in the range of $2.8 million to $3.3 million.

 

 
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Non-GAAP Financial Measure:

 

In addition to presenting financial results in accordance with generally accepted accounting principles, or GAAP, this earnings release also presents adjusted earnings before interest, taxes, depreciation and amortization, share based payments and expenses that management believes will not recur in future periods, including certain acquisition-related expenses (“Adjusted EBITDA”). Adjusted EBITDA is calculated by deducting operating and other expenses from gross profit and excluding amounts related to interest expense, income tax expense or benefit, depreciation expense, amortization expense, non-cash share-based payments, acquisition-related expenses and any gain or loss on disposal of assets. This non-GAAP financial measure is intended to provide investors with additional insight into our ongoing operating performance. This non-GAAP financial measure should be considered in conjunction with, but not as a substitute for, the financial information presented in accordance with GAAP.

 

A reconciliation of the Company’s GAAP Net (Loss) for the quarters and nine months ended September 30, 2011 and 2012 to its non-GAAP Adjusted EBITDA for the same periods is provided below:

 

   For the Three Months Ended September 30,   For the Nine Months Ended September 30, 
   2012   2011   2012   2011 
                 
Net Loss   (492,607)   (91,749)   (1,795,731)   (555,893)
Depreciation   6,737    9,148    21,174    30,281 
Interest Expense, net   87,036    48,032    214,695    122,131 
Non-Recurring, Non-Cash Compensation included in SG&A   206,800    -    206,800    - 
Non-Recurring Public Transaction Related Expenses included in SG&A   -    -    781,000    - 
   Adjusted EBITDA  $(192,034)  $(34,569)  $(572,062)  $(403,481)

 

 

About GlobalWise Investments, Inc.

 

GlobalWise Investments, Inc., via its wholly owned subsidiary Intellinetics, Inc., is a Columbus, Ohio based Enterprise Content Management (ECM) pioneer with industry-leading software that delivers cloud ECM based solutions on-demand. The Company’s flagship platform, IntellivueTM, represents a new industry benchmark and game-changing solution by enabling clients to access and manage the content of every scanned document, file, spreadsheet, email, photo, audio file or video tape – virtually anything that can be digitized – in their enterprise from any PC, laptop, tablet or smartphone from anywhere in the world.

 

For additional information, please visit the Company’s corporate website: www.GlobalWiseInvestments.com

 

This press release may contain “forward-looking statements.” Expressions of future goals and similar expressions reflecting something other than historical fact are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-looking statements may include, without limitation, statements about our market opportunity, strategies, competition, expected activities and expenditures as we pursue our business plan. Although we believe that the expectations reflected in any forward-looking statements are reasonable, we cannot predict the effect that market conditions, customer acceptance of products, regulatory issues, competitive factors, or other business circumstances and factors described in our filings with the Securities and Exchange Commission may have on our results. The company undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this press release.

 

 

Financial Tables Follow

 

 
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   GLOBALWIDE INVESTMENTS, INC. and SUBSIDIARY 
   Condensed Consolidated Statements of Operations 
   (unaudited) 
   For the Three Months Ended September 30,   For the Nine Months Ended September 30, 
   2012   2011   2012   2011 
                 
Revenues:                    
Sale of software licenses without professional services  $84,134   $60,844   $140,812   $97,644 
Sale of software licenses with professional services   307,167    308,447    720,562    551,211 
Software as a service   25,425    41,575    79,062    110,902 
Software maintenance services   201,539    148,238    574,848    462,480 
Consulting services   93,472    57,922    444,066    215,966 
                     
Total revenues   711,737    617,026    1,959,350    1,438,203 
                     
Cost of revenues:                    
Sale of software licenses without professional services   8,271    3,810    40,103    13,261 
Sale of software licenses with professional services   109,229    124,894    372,084    354,384 
Software as a service   7,478    7,057    21,372    20,573 
Software maintenance services   34,719    29,757    96,003    81,929 
Consulting services   67,836    56,404    292,080    173,308 
                     
Total cost of revenues   227,532    221,922    821,641    643,455 
                     
Gross profit   484,205    395,104    1,137,709    794,748 
                     
Operating expenses:                    
General and administrative   589,403    229,445    1,758,602    731,079 
Sales and marketing   293,636    200,228    938,969    467,150 
Depreciation   6,737    9,148    21,174    30,281 
                     
Total operating expenses   889,776    438,821    2,718,745    1,228,510 
                     
Loss from operations   (405,571)   (43,717)   (1,581,036)   (433,762)
                     
Other income (expense)                    
                     
      Interest expense, net   (87,036)   (48,032)   (214,695)   (122,131)
                     
                     
Net Loss  $(492,607)  $(91,749)  $(1,795,731)  $(555,893)
                     
Basic and diluted net loss per share  $(0.01)  $(0.00)  $(0.06)  $(0.02)
                     
Weighted average number of common shares                    
outstanding - basic and diluted   33,022,913    22,757,100    32,082,486    22,757,100 
                     
Adjusted EBITDA:                    
Net Loss   (492,607)   (91,749)   (1,795,731)   (555,893)
Depreciation   6,737    9,148    21,174    30,281 
Interest Expense, net   87,036    48,032    214,695    122,131 
Non-Recurring, Non-Cash Compensation included in SG&A   206,800    -    206,800    - 
Non-Recurring Public Transaction Related Expenses included in SG&A   -    -    781,000    - 
   Adjusted EBITDA  $(192,034)  $(34,569)  $(572,062)  $(403,481)

 

 
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GLOBALWISE INVESTMENTS, INC. 
Condensed Consolidated Balance Sheets 
  
ASSETS 
   (Unaudited)     
   September 30,   December 31, 
   2012   2011 
Current assets:          
Cash  $21,205   $140,271 
Accounts receivable, net   281,206    335,453 
Prepaid expenses and other current assets   51,246    18,398 
Total current assets   353,657    494,122 
           
Property and equipment, net   65,375    32,771 
Other assets   39,318    46,404 
           
Total assets  $458,350   $573,297 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT 
Current liabilities:          
Accounts payable and accrued expenses  $1,024,984   $389,080 
Accrued expenses, related parties   30,405    - 
Deferred revenues   586,009    964,043 
Derivative liability   -    - 
Convertible notes payable, net of discount   97,500    - 
Notes payable - current   1,446,310    747,778 
Notes payable - related party - current   370,000    - 
Total current liabilities   3,555,208    2,100,901 
           
Long-term liabilities:          
Deferred compensation   245,357    215,011 
Notes payable - net of current portion   1,304,650    1,528,915 
Notes payable - related party - net of current portion   276,707    262,707 
Deferred interest expense   39,564    17,063 
Other long-term liabilities - related parties   169,964    157,859 
Total long-term liabilities   2,036,242    2,181,555 
Total liabilities other than shares   5,591,450    4,282,456 
Shares subject to mandatory redemption   -    111,235 
Total liabilities   5,591,450    4,393,691 
           
Commitments and contingencies          
Excess of liabilities over assets (deficit)   -    (3,820,394)
Total liabilities and excess of liabilities over assets (deficit)   5,591,450    573,297 
Stockholders'  deficit:          
Common stock, $0.001 par value, 50,000,000 shares authorized;          
33,022,913 shares issued and outstanding at September 30, 2012   33,023    - 
Additional paid-in capital   312,783    - 
Accumulated deficit   (5,478,906)   - 
Total stockholders' deficit   (5,133,100)   - 
Total liabilities and excess of liabilities over assets (deficit) and stockholders' deficit  $458,350   $573,297