SOURCE: GlobalWise Investments, Inc.

GlobalWise Investments, Inc.

November 14, 2013 16:30 ET

GlobalWise Investments Reports Financial Results for Third Quarter 2013

COLUMBUS, OH--(Marketwired - Nov 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, announce financial results for the third quarter ended September 30, 2013.

The Company's total revenues for the quarter ended September 30, 2013 were $381,078 as compared to $711,737 for the three months ended September 30, 2012, a decrease of $330,659, or 46%, primarily attributable to decreases in revenues from software licenses with and without professional services and consulting services. Gross profits were $266,162 for the quarter ended September 30, 2013 as compared to $484,205 for the quarter ended September 30, 2012, representing a decrease of 45%, primarily as a result of the decrease in revenues.

GlobalWise's costs of revenues were $114,916 and $227,532 for the quarters ended September 30, 2013 and September 30, 2012, respectively, representing a decrease of $112,616 or 49%. The decrease in cost of revenues is primarily the result of a decrease in third-party costs in connection with a client document conversion project in 2012. As a result, gross margins were 70% and 68% for the quarters ended September 30, 2013 and September 30, 2012, respectively, an increase of 2%. 

Total operating expenses for the quarter ended September 30, 2013 were $767,533 as compared to $889,776 during the quarter ended September 30, 2012, representing a decrease of $122,243 or 14%.

As a result, GlobalWise reported a net loss of $541,412 for the quarter ended September 30, 2013 compared to a net loss of $492,607 for the quarter ended September 30, 2012, representing an increase of $48,805.

Matthew Chretien, Interim President and CEO of GlobalWise stated, "While our revenue growth has slowed down, public awareness of cloud-based computing, storage and retrieval is helping our marketing efforts to the smaller SMB clients. Our software as a service (SAAS) offering Intelli-Cloud™ is sold through our expanding base of channel partners that creates a low-cost sales delivery mechanism coupled with a high-margin software product. The recent conferences we attended, is helping us broaden our message to a larger group, as well as increase our number of channel partners. Our channel partnerships with companies like MWAi are gaining traction and I was honored to participate in the 2013 Innovation Fair in Japan with the rest of the Technology United members. I am enthusiastic regarding the expected increased performance and commitment from our channel partners, but still expect fluctuations in revenue as we evolve from historically premised-based software solutions sold over a long sales cycle to cloud-based solutions."

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

         
         
GLOBALWISE INVESTMENTS, INC. and SUBSIDIARY
Condensed Consolidated Balance Sheets
 
         
ASSETS
    Unaudited    
    September 30,   December 31,
    2013   2012
         
Current assets:        
  Cash   $ 170,975   $ 46,236
  Accounts receivable, net     532,965     332,413
  Prepaid expenses and other current assets     56,761     40,026
               
    Total current assets     760,701     418,675
             
Property and equipment, net     61,280     58,129
Other assets     31,003     37,239
             
    Total assets   $ 852,984   $ 514,043
             
LIABILITIES AND STOCKHOLDERS' DEFICIT  
             
Current liabilities:            
  Accounts payable and accrued expenses   $ 462,548     $ 1,143,265  
  Deferred revenues     648,406       571,268  
  Derivative Liability     -       15,470  
  Notes payable - current     305,809       563,009  
  Convertible note payable, net of discount     -       107,518  
  Notes payable - related party - current     230,415       95,000  
    Total current liabilities     1,647,178       2,495,530  
                 
Long-term liabilities:                
  Deferred compensation     215,012       309,740  
  Notes payable - net of current portion     1,210,992       1,509,265  
  Notes payable - related party     -       369,415  
  Deferred interest expense     73,316       41,440  
  Other long-term liabilities - related parties     30,091       72,033  
                   
    Total long-term liabilities     1,529,411       2,301,893  
                   
    Total liabilities     3,176,589       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 September 30, 2013 and December 31, 2012, respectively     54,363       36,492  
  Additional paid-in capital     4,912,814       1,348,794  
  Accumulated deficit     (7,290,782 )     (5,668,666 )
    Total stockholders' deficit     (2,323,605 )     (4,283,380 )
    Total liabilities and stockholders' deficit   $ 852,984     $ 514,043  
                     
                     
   
   
GLOBALWISE INVESTMENTS, INC. and SUBSIDIARY  
Condensed Consolidated Statements of Operations  
(Unaudited)  
                         
    For the Three Months Ended September 30,     For the Nine Months Ended September 30,  
    2013     2012     2013     2012  
                         
Revenues:                        
  Sale of software licenses without professional services   $ 11,263     $ 84,134     $ 150,542     $ 140,812  
  Sale of software licenses with professional services     72,852       307,167       192,585       720,562  
  Software as a service     34,919       25,425       104,030       79,062  
  Software maintenance services     211,759       201,539       648,765       574,848  
  Consulting services     50,285       93,472       221,192       444,066  
                                   
    Total revenues     381,078       711,737       1,317,114       1,959,350  
                                 
Cost of revenues:                                
  Sale of software licenses without professional services     6,609       8,271       19,712       40,103  
  Sale of software licenses with professional services     48,810       109,229       280,761       372,084  
  Software as a service     6,881       7,478       20,684       21,372  
  Software maintenance services     32,172       34,719       92,496       96,003  
  Consulting services     20,444       67,836       63,112       292,080  
                                   
    Total cost of revenues     114,916       227,532       476,765       821,641  
                                 
Gross profit     266,162       484,205       840,349       1,137,709  
                                 
Operating expenses:                                
  General and administrative     566,448       589,403       1,642,065       1,758,602  
  Sales and marketing     193,579       293,636       673,601       938,969  
  Depreciation     7,506       6,737       19,622       21,174  
                                 
    Total operating expenses     767,533       889,776       2,335,288       2,718,745  
                                 
Loss from operations     (501,371 )     (405,571 )     (1,494,939 )     (1,581,036 )
                                 
Other income (expense)                                
  Derivative gain     -       -       15,470       -  
  Interest expense, net     (40,041 )     (87,036 )     (142,647 )     (214,695 )
                                 
    Total other income (expense)     (40,041 )     (87,036 )     (127,177 )     (214,695 )
                                 
Net loss   $ (541,412 )   $ (492,607 )   $ (1,622,116 )   $ (1,795,731 )
                                 
Basic and diluted net loss per share:   $ (0.01 )   $ (0.01 )   $ (0.03 )   $ (0.05 )
                                 
Weighted average number of common shares outstanding - basic and diluted     47,362,047       33,022,913       47,362,047       32,082,486  
                                 
                                 

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