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GlobalWise Investments Reports Financial Results for First Quarter 2013

COLUMBUS, OH--(Marketwired - May 6, 2013) - GlobalWise Investments, Inc. ( OTCBB : GWIV ) ( OTCQB : GWIV ) (the "Company" or "GlobalWise") (www.GlobalWiseInvestments.com), 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 first quarter ended March 31, 2013.

The company's total revenues for the three months ended March 31, 2013 were $354,871 as compared to $360,328 for the three months ended March 31, 2012, representing a decrease of 2%. The slight decrease in total revenues year-over-year is attributable primarily to the delay in closing several major agreements generated by our expanded sales channel partners, as well as lower revenue from consulting projects during the current quarter. Gross profits were $175,387 for the three months ended March 31, 2013 as compared to $56,381 for the three months ended March 31, 2012, representing an increase of 211%. The improvement in gross profits was due to the decrease in total cost of revenues, one particular example is the decrease in third-party hardware sales that had little to no margin.

GlobalWise's cost of revenues were $179,484 and $303,947 for the three months ended March 31, 2013 and 2012, respectively, representing a decrease of 41%. The lower cost of revenues is primarily attributable to less conversion projects and hardware sales, which are third party costs.

Gross margins were 49% and 16% for the three months ended March 31, 2013 and 2012, respectively, an increase of 33%. The gross margin increase is again a result of the decrease in total cost of revenues.

Total operating expenses for the three months ended March 31, 2013 were $801,275 as compared to $1,148,905 during the three months ended March 31, 2012, representing a decrease of 30%. The decrease in operating expenses is primarily due to legal, consulting and professional fees related to the Share Exchange and reverse merger consummated during the first quarter of 2012, the corresponding costs of operating and reporting as a public company, and the on-boarding of additional personnel which were incurred during that period.

GlobalWise reported a loss from operations of $625,888 for the three months ended March 31, 2013, compared to a loss of $1,092,524 for the three months ended March 31, 2012. The loss is attributable primarily to lower revenues and the deferment of software licenses with professional services revenues which will be recognized in subsequent reporting periods. The Company's operating loss decreased 43%, primarily due to lower expenses and the implementation of cost-savings initiatives during the year.

GlobalWise reported a net loss of $671,797 and $1,147,873 for the three months ended March 31, 2013 and 2012, respectively, representing a decrease in net operating loss of 42%. The lower net operating loss for the current quarter reflects the absence of $305,000 in costs associated with the Share Exchange and reverse merger which were incurred during 2012.

As of March 31, 2013 GlobalWise had $1,363,552 in cash compared to $140,510 at March 31, 2012. The increase in cash is a result of the Company's financing activities during the first quarter, which raised net proceeds of $2,731,021. For the three months ended March 31, 2013, cash from non-financing activities was $850,870 as a result of the conversion of equity during the period. GlobalWise initiated a debt reduction initiative in September 2012, which has reduced the Company's debt by 49% through March 31, 2013.

Mr. William J. "BJ" Santiago, Chief Executive Officer of GlobalWise, stated, "In the first quarter of 2013 we reached a significant milestone in completing our first major financing. We believe this financing helps us to, among other things, expand our global channel sales distribution model and expedite our strategies of servicing the small-to-medium (SMB) business sectors world-wide and generate greater revenue in the coming quarters in fiscal 2013."

"With the Intellivue™ solution now fully cloud-enabled, coupled with the addition of three more industry leading channel sales partners in Q1 that included two Fortune 500 companies located in Palo Alto, CA and Irvine, CA respectively, and Muratec America, Inc. (www.muratec.com), a division of Muratec Murata Machinery, LTD, a $3.4 billion private Japanese machinery company," Mr. Santiago continued, "we now have immediately expanded our prospect pool to over 8.5 million companies that may be introduced to the Intellivue™ solution this fiscal year. Because the Intellivue™ solution can be delivered virtually anywhere in the world, we expect to leverage our continued expansion of global channel partners and remain laser focused on providing our ECM cloud-based solution to the underserved SMB market worldwide."

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 based ECM 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 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 TO FOLLOW)

 
GLOBALWISE INVESTMENTS, INC. and SUBSIDIARY
   
Condensed Consolidated Balance Sheets  
   
             
             
             
ASSETS            
    (unaudited)        
    March 31,     December 31,  
    2013     2012  
                 
Current assets:                
  Cash   $ 1,363,552     $ 46,236  
  Accounts receivable, net     428,155       332,413  
  Prepaid expenses and other current assets     55,448       40,026  
    Total current assets     1,847,155       418,675  
                 
Property and equipment, net     56,393       58,129  
Other assets     35,160       37,239  
                 
    Total assets   $ 1,938,708     $ 514,043  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT                
                 
Current liabilities:                
  Accounts payable and accrued expenses   $ 501,863     $ 1,143,265  
  Derivative liability     -       15,470  
  Deferred revenues     539,563       571,268  
  Convertible note payable, net of discount     -       107,518  
  Notes payable - current     186,076       563,009  
  Notes payable - related party - current     255,415       95,000  
  Other short-term liabilities - related parties     54,927       -  
    Total current liabilities     1,537,844       2,495,530  
                 
Long-term liabilities:                
  Deferred compensation     319,163       309,740  
  Notes payable - net of current portion     1,402,922       1,509,265  
  Notes payable - related party - net of current portion     -       369,415  
  Deferred interest expense     52,065       41,440  
  Other long-term liabilities - related parties     -       72,033  
                 
    Total long-term liabilities     1,774,150       2,301,893  
                 
    Total liabilities     3,311,994       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 March 31, 2013 and December 31, 2012, respectively     54,363       36,492  
  Additional paid-in capital     4,912,814       1,348,794  
  Accumulated deficit     (6,340,463 )     (5,668,666 )
    Total stockholders' deficit     (1,373,286 )     (4,283,380 )
    Total liabilities and stockholders' deficit   $ 1,938,708     $ 514,043  
                 
                 
                 
GLOBALWISE INVESTMENTS, INC. and SUBSIDIARY  
Condensed Consolidated Statements of Operations  
For the Three Months Ended March 31, 2013  
(Unaudited)  
             
    For the Three Months Ended March 31,  
    2013     2012  
Revenues:                
  Sale of software licenses without professional services   $ 8,660     $ 21,739  
  Sale of software licenses with professional services     -       19,992  
  Software as a service     34,790       29,041  
  Software maintenance services     223,464       177,451  
  Consulting services     87,957       112,105  
                   
    Total revenues     354,871       360,328  
                 
Cost of revenues:                
  Sale of software licenses without professional services     6,369       17,205  
  Sale of software licenses with professional services     114,936       153,626  
  Software as a service     6,909       6,530  
  Software maintenance services     27,950       24,880  
  Consulting services     23,320       101,706  
                   
    Total cost of revenues     179,484       303,947  
                 
Gross profit     175,387       56,381  
                 
Operating expenses:                
  General and administrative     568,148       820,220  
  Sales and marketing     227,783       321,895  
  Depreciation     5,344       6,790  
                 
    Total operating expenses     801,275       1,148,905  
                 
Loss from operations     (625,888 )     (1,092,524 )
                 
Other income (expenses)                
  Derivative gain     15,470       -  
  Interest expense, net     (61,379 )     (55,349 )
                 
    Total operating expenses     (45,909 )     (55,349 )
                 
Net loss   $ (671,797 )   $ (1,147,873 )
                 
Basic and diluted net loss per share   $ (0.02 )   $ (0.04 )
                 
Weighted average number of common shares outstanding - basic and diluted     39,620,613       30,588,213