GlobalWise Investments, Inc.

www.GlobalWiseInvestments.com

Matthew Chretien, President & CEO

614-388-8909

Contact@GlobalWiseInvestments.com

 

Exhibit 99.1

 

GlobalWise Investments Reports Financial Results for Second Quarter 2013

 

COLUMBUS, OH – (Marketwire – August 14, 2013) – GlobalWise Investments, Inc. (OTCQB: GWIV) (OTCBB: GWIV) (the “Company”) (www.GlobalWiseInvestments.com) and its wholly owned subsidiary Intellinetics, Inc., a leading-edge technology company focused on the design, implementation and management of cloud-based Enterprise Content Management (“ECM”) systems in both the public and private sectors, announced financial results for the second quarter ended 6/30/13.

 

The Company's total revenues for the quarter ended 6/30/13 were $581,164 as compared to $887,285 for the quarter ended 6/30/12, a decrease of $306,121, or 35%, primarily attributable to decreases in revenues from software licenses with professional services and consulting services. Gross profits were $398,801 for the quarter ended 6/30/13 as compared to $597,123 for the quarter ended 6/30/12, representing a decrease of 33%, primarily as a result of the decrease in revenues.

 

GlobalWise's costs of revenues were $182,363 and $290,162 for the quarters ended 6/30/13 and 6/30/12, respectively, representing a decrease of 37%. The lower cost of revenues is primarily attributable to a decrease in third-party costs. As a result, gross margins were 69% and 67% for the quarters ended 6/30/13 and 6/30/12, respectively, an increase of 2%.

 

Total operating expenses for the quarter ended 6/30/13 were $766,481 as compared to $680,062 during the quarter ended 6/30/12, representing an increase of 13%.

 

As a result, GlobalWise reported a net loss of $408,907 for the quarter ended 6/30/13 compared to a net loss of $155,250 for the quarter ended 6/30/12, representing an increase of $253,657.

 

Matthew Chretien, President and CEO of GlobalWise stated, “While there continues to be much room for improvement, I’m very pleased with certain aspects of our operational performance during the quarter ended 6/30/13. We continue to develop and expand our software as a service revenue stream through our expanding network of channel partners. As we continue down that path, we expect to continue to see fluctuations in revenue which reflect the net impact of channel partner-specific sales plans and priorities. While subscriber growth through software as a service delivery is a key strategic goal, our channel partners also are able to sell premise-based solutions. Thus, quarter to quarter variations in revenue sources are expected and reflect different channel partner-specific strategies and results. Over the long term, we expect software as a service will continue to increase as a percentage of total revenue. As an indication of the anticipated change in our revenue stream, at December 31, 2011, we had eight customers subscribing to software as a service and at December 31, 2012, we had 231 customers subscribing to software as a service, with an increase to 357 customers subscribing to software as a service by June 30, 2013.”

 

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, Intellivue™, 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

 

 
 

 

Forward Looking Statements

 

This press release may contain “forward-looking statements.” Expressions of future goals and similar expressions reflecting something other than historical facts 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 our 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.

 

######

 

-2-
 

 

GLOBALWISE INVESTMENTS, INC. and SUBSIDIARY

Condensed Consolidated Balance Sheets

 

   Unaudited     
   June 30,   December 31, 
   2013   2012 
ASSETS          
Current assets:          
Cash  $567,654   $46,236 
Accounts receivable, net   744,876    332,413 
Prepaid expenses and other current assets   70,792    40,026 
           
Total current assets   1,383,322    418,675 
           
Property and equipment, net   62,568    58,129 
Other assets   33,081    37,239 
           
Total assets  $1,478,971   $514,043 
           
LIABILITIES AND STOCKHOLDERS' DEFICIT          
           
Current liabilities:          
Accounts payable and accrued expenses  $480,946   $1,143,265 
Deferred revenues   696,197    571,268 
Derivative Liability   -    15,470 
Notes payable - current   221,688    563,009 
Convertible note payable, net of discount   -    107,518 
Notes payable - related party - current   237,915    95,000 
Total current liabilities   1,636,746    2,495,530 
           
Long-term liabilities:          
Deferred compensation   218,935    309,740 
Notes payable - net of current portion   1,306,074    1,509,265 
Notes payable - related party   -    369,415 
Deferred interest expense   62,691    41,440 
Other long-term liabilities - related parties   36,718    72,033 
Total long-term liabilities   1,624,418    2,301,893 
           
Total liabilities   3,261,164    4,797,423 
           
Stockholders' deficit:          
Common stock, $0.001 par value, 50,000,000 shares authorized; 47,362,047 and 36,490,345 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively   54,363    36,492 
Additional paid-in capital   4,912,814    1,348,794 
Accumulated deficit   (6,749,370)   (5,668,666)
Total stockholders' deficit   (1,782,193)   (4,283,380)
Total liabilities and stockholders' deficit  $1,478,971   $514,043 

 

-3-
 

 

Condensed Consolidated Statements of Operations

(Unaudited)

 

   For the Three Months Ended June 30,   For the Six Months Ended June 30, 
   2013   2012   2013   2012 
                 
Revenues:                    
Sale of software licenses without modification  $130,619   $34,939   $139,279   $56,678 
Sale of software licenses with substantive modification   119,733    393,403    119,733    413,395 
Software as a service   34,320    24,596    69,111    53,637 
Software maintenance services   213,542    195,857    437,006    373,308 
Consulting services   82,950    238,490    170,907    350,595 
                     
Total revenues   581,164    887,285    936,036    1,247,613 
                     
Cost of revenues:                    
Sale of software licenses without modification   6,733    14,627    13,103    31,832 
Sale of software licenses with substantive modification   117,015    109,229    231,951    262,855 
Software as a service   6,893    7,364    13,803    13,894 
Software maintenance services   32,374    36,404    60,324    61,284 
Consulting services   19,348    122,538    42,668    224,244 
                     
Total cost of revenues   182,363    290,162    361,849    594,109 
                     
Gross profit   398,801    597,123    574,187    653,504 
                     
Operating expenses:                    
General and administrative   507,469    348,976    1,075,617    1,169,198 
Sales and marketing   252,240    323,439    480,022    645,333 
Depreciation   6,772    7,647    12,116    14,437 
                     
Total operating expenses   766,481    680,062    1,567,755    1,828,968 
                     
Loss from operations   (367,680)   (82,939)   (993,568)   (1,175,464)
                     
Other income (expense)                    
Derivative gain   -    -    15,470    - 
Interest expense, net   (41,227)   (72,311)   (102,606)   (127,659)
                     
Total other income (expense)   (41,227)   (72,311)   (87,136)   (127,659)
                     
Net loss  $(408,907)  $(155,250)  $(1,080,704)  $(1,303,123)
                     
Basic and diluted net loss per share:  $(0.01)  $(0.00)  $(0.03)  $(0.04)
                     
Weighted average number of common shares outstanding - basic and diluted   47,362,047    32,590,850    43,182,708    31,589,531 

 

-4-