SOURCE: GlobalWise Investments, Inc.

GlobalWise Investments, Inc.

March 31, 2014 17:00 ET

GlobalWise Investments Announces Results for Fiscal Year 2013

COLUMBUS, OH--(Marketwired - Mar 31, 2014) - GlobalWise Investments, Inc. (OTCQB: GWIV) (OTCBB: GWIV) (the "Company") ( 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, announce financial results for the fiscal year ended December 31, 2013.

The Company's total revenues for the twelve months ended December 31, 2013 were $1,554,185 as compared to $2,734,950 for the same period in 2012, a decrease of $1,180,765, or 43%, primarily attributable to decreases in revenues from consulting services and software licenses with and without professional services. 

Overall gross margins were 62% and 64% for the twelve months ended December 31, 2013 and 2012, respectively, a decrease of 2%.

Total operating expenses were $2,940,030 for the twelve months ended December 31, 2013 as compared to $3,424,507 for the twelve months ended December 31, 2012, representing a decrease of 14% or $484,477. The decrease in operating expenses is primarily due to a reduction in sales and marketing expense.

GlobalWise reported a net operating loss of $2,139,704 and $1,985,493 for the twelve months ended December 31, 2013 and 2012, respectively, representing an increase in net loss of $154,211 or 8%.

Matthew Chretien, President and CEO of GlobalWise stated, "In 2013, Intellinetics made significant efforts into refining and re-designing every detail of our channel partner strategy from a technology, process, tools, business model and market positioning perspective. This process consumed significant time and resources across the board but was crucial to improving revenue-generating effectiveness. MarketCommand™ was designed using feedback and analysis from our customers and channel partners. MarketCommand™ is a go-to-market approach that will become the de-facto standard for solution delivery into the SMB market, whose buyers place a premium on simplicity, minimizing disruption, and affordability when considering new business solutions. MarketCommand™ for our software platform, IntelliCloud™, was launched in Q1 of 2014. It allows our partners to bundle IntelliCloud™ as an embedded part of the hardware or services they already provide. We are initially focused on recruiting dealers in the print/imaging channel and will expand to the adjacent and much larger IT value-added reseller channel as a next step. 

The first two MarketCommand™ partners from the imaging channel were active by the end of Q1 of 2014. Combined, these carefully selected market leaders have 170 sales people serving over 40,000 active customers -- large enough for a rigorous 'stress test' of the program to ensure every aspect of the model works well. While feedback has been positive and new orders have been received under MarketCommand™, moving from premise-based one-time sales to the new low-cost, cloud-based entry point for recurring sales is a difficult transition from a revenue perspective. We certainly experienced that revenue contraction in 2013. However, as the number of active subscribers continues to grow, recurring revenue increases. As we certify other software providers to participate in MarketCommand™, we can benefit from additional revenue share from solutions such as device monitoring, power management and remote network management which can leverage the same infrastructure as IntelliCloud™ for activation. 

Moving forward, our focus is on recruiting strong, highly qualified resellers under MarketCommand™, which will increase the number of people, solutions, and services that use IntelliCloud™. The stronger our reseller base, the more IntelliCloud™ customers activate with increasing recurring revenue generation as storage consumption grows. We already have several new companies lined up to partner with us under MarketCommand™ in Q2 of 2014 and the focus on expanding distribution is our number one priority. The link below shows a video example of the MarketCommand™ with IntelliCloud™ in action. Its power is in the simplicity of messaging and delivery."

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:

Consolidated Balance Sheets  
  December 31,     December 31,  
  2013     2012  
Current assets:              
  Cash $ 260,560     $ 46,236  
  Accounts receivable, net   144,071       332,413  
  Prepaid expenses and other current assets   39,242       40,026  
    Total current assets   443,873       418,675  
Property and equipment, net   53,226       58,129  
Other assets   28,925       37,239  
    Total assets $ 526,024     $ 514,043  
Current liabilities:              
  Accounts payable and accrued expenses $ 502,646     $ 1,143,265  
  Deferred revenues   482,428       571,268  
  Derivative Liability   -       15,470  
  Notes payable - current   711,266       563,009  
  Convertible note payable, net of discount   -       107,518  
  Notes payable - related party - current   -       95,000  
    Total current liabilities   1,696,340       2,495,530  
Long-term liabilities:              
  Deferred compensation   215,012       309,740  
  Notes payable - net of current portion   1,114,394       1,509,265  
  Notes payable - related party   222,915       369,415  
  Deferred interest expense   83,942       41,440  
  Other long-term liabilities - related parties   34,614       72,033  
    Total long-term liabilities   1,670,877       2,301,893  
    Total liabilities   3,367,217       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 December 31, 2013 and December 31, 2012, respectively   54,363       36,492  
  Additional paid-in capital   4,912,814       1,348,794  
  Accumulated deficit   (7,808,370 )     (5,668,666 )
    Total stockholders' deficit   (2,841,193 )     (4,283,380 )
    Total liabilities and stockholders' deficit $ 526,024     $ 514,043  
Consolidated Statements of Operations  
  For the Year Ended December 31,  
  2013     2012  
  Sale of software licenses without professional services $ 67,507     $ 188,894  
  Sale of software licenses with professional services   196,485       929,741  
  Software as a service   138,607       108,102  
  Software maintenance services   856,755       790,007  
  Consulting services   294,831       718,206  
    Total revenues   1,554,185       2,734,950  
Cost of revenues:              
  Sale of software licenses without professional services   25,170       45,477  
  Sale of software licenses with professional services   283,374       469,252  
  Software as a service   27,592       28,232  
  Software maintenance services   124,430       119,727  
  Consulting services   124,663       318,831  
    Total cost of revenues   585,229       981,519  
Gross profit   968,956       1,753,431  
Operating expenses:              
  General and administrative   2,087,169       2,196,068  
  Sales and marketing   826,396       1,200,019  
  Depreciation   26,465       28,420  
    Total operating expenses   2,940,030       3,424,507  
Loss from operations   (1,971,074 )     (1,671,076 )
Other income (expense)              
  Derivative gain (loss)   15,470       (15,470 )
  Interest expense, net   (184,100 )     (298,947 )
    Total other income (expense)   (168,630 )     (314,417 )
Net loss $ (2,139,704 )   $ (1,985,493 )
Basic and diluted net loss per share: $ (0.05 )   $ (0.06 )
Weighted average number of common shares outstanding - basic and diluted   45,289,553       32,866,979  

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