GlobalWise (GWIV) Reports Second Quarter 2012 Financial Results

COLUMBUS, OH — (Marketwire) — 08/14/12 — 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 second quarter ended June 30, 2012.

Financial Highlights for the Second Quarter 2012:

• Total revenue increased by 146% to $887,285 compared to $360,328 in the first quarter, and an increase of 52% compared to $582,051 in the year-ago second quarter;
• Gross profit improved to $597,123, a 959% increase over the first quarter of $56,381, and a 64% increase compared to $364,661 in the year-ago second quarter;
• Gross profit margin increased to 67% compared to 16% in the first quarter and 63% in the year-ago second quarter;
• Total operating expenses decreased by 69% to $680,062 compared to $1,148,905 in the first quarter; up from $421,636 in the year-ago second quarter;
• Loss from operations decreased by 1,217% to ($82,939) compared to ($1,092,524) in the first quarter; up from ($56,975) in the year-ago second quarter;
• Net loss decreased by 639% to ($155,250) compared to ($1,147,873) in the first quarter; up from ($93,039) in the year-ago second quarter.

The Company’s operating expenses in the second quarter reflect additional costs associated with being a public company and strategic investments in human talent, technology and process assets that we believe help establish a solid foundation for profitable geometric growth in its subscriber base and revenue. Combined, these investments drive cost and cycle time out of the marketing, sales and order fulfillment processes. As a result, GlobalWise is better positioned to be able to harvest demand from captive markets with little additional operating cost and expects expenses to remain relatively stable at current levels as revenue continues to increase.

“GlobalWise’s dynamic approach to the ECM software market is taking hold in 2012,” stated William J. “BJ” Santiago, CEO of GlobalWise. “Two important changes have occurred in the past 18 months that are becoming the catalysts for our extraordinary growth. First, the advancement of our ECM software to a cloud-delivery model reduces our cost of service delivery and time to installation. Second, moving from a domestic direct-sales model to an international Channel Partner strategy has dramatically increased our ability to sell our software to a greater number of clients in a lower-cost manner. Our second-quarter revenue growth of 146% vs. the prior quarter and 52% growth year-over-year is a direct, tangible result of these developments. Simply put, we’re now selling more software faster and have reduced our average sales cycle from a historic 18 – 24 months to 3 – 6 months.”

Since the beginning of 2012, the Company has signed eight new Channel Partners with several potential new partners pending. In 2011, 14 new Channel Partners were signed. The increase in sales capacity is driving significant and consistent revenue growth, and the trend is expected to continue throughout 2012 and beyond.

Fiscal Year 2012 Guidance:

Based upon the Company’s current sales funnel and recent Channel Partner activity, GlobalWise currently expects to exceed $3.3 million in annual revenue in 2012 vs. $1.7 million in 2011. Management anticipates exiting 2012 at an annualized revenue run rate for 2013 in excess of $5.0 million, as existing Channel Partners increase their sales and marketing efforts and new Channel Partners are added. GlobalWise expects to be increasingly well positioned for growth and profitability in future periods as projected revenues increase, operating expenses continue to decline as a percentage of revenue, and the cost of continuing as a public company normalizes.

“Our sales funnel is growing steadily with qualified clients through our Channel Partner eco-system,” added Mr. Santiago. “The Channel Partners need a cloud-based ECM solution to complement their product strategy and increase the number of value added services provided to clients. We strategically choose partners who sell enterprise software, consulting services or office equipment focused around document management. We can quickly train them on our template based ECM software and/or how to integrate the software into their existing business application software or hardware products. This new sales strategy allows us to focus on what we do best – software engineering, support and cloud services delivery – and allows our partners to do what they do best – demand generation for industry leading business software 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

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

                GLOBALWISE INVESTMENTS, INC. and SUBSIDIARY
              Condensed Consolidated Statements of Operations
                                (Unaudited)

                           For the Three Months       For the Six Months
                              Ended June 30,            Ended June 30,
                         ------------------------  ------------------------
                             2012         2011         2012         2011
                         -----------  -----------  -----------  -----------

Revenues:
  Sale of software
   licenses without
   modification          $    34,939  $    19,925  $    56,678  $    36,800
  Sale of software
   licenses with
   substantive
   modification              393,403      227,979      413,395      242,764
  Software as a service       24,596       37,910       53,637       69,327
  Software maintenance
   services                  195,857      160,209      373,308      314,242
  Consulting services        238,490      136,028      350,595      158,044
                         -----------  -----------  -----------  -----------

    Total revenues           887,285      582,051    1,247,613      821,177
                         -----------  -----------  -----------  -----------

Cost of revenues:
  Sale of software
   licenses without
   modification               14,627        5,084       31,832        9,451
  Sale of software
   licenses with
   substantive
   modification              109,229      121,052      262,855      229,490
  Software as a service        7,364        6,930       13,894       13,516
  Software maintenance
   services                   36,404       29,449       61,284       52,172
  Consulting services        122,538       54,875      224,244      116,904
                         -----------  -----------  -----------  -----------

    Total cost of
     revenues                290,162      217,390      594,109      421,533
                         -----------  -----------  -----------  -----------

Gross profit                 597,123      364,661      653,504      399,644
                         -----------  -----------  -----------  -----------

Operating expenses:
  General and
   administrative            348,976      278,773    1,169,198      501,631
  Sales and marketing        323,439      132,524      645,333      266,925
  Depreciation                 7,647       10,339       14,437       21,133
                         -----------  -----------  -----------  -----------

    Total operating
     expenses                680,062      421,636    1,828,968      789,689
                         -----------  -----------  -----------  -----------

Loss from operations         (82,939)     (56,975)  (1,175,464)    (390,045)

Interest expense, net        (72,311)     (36,064)    (127,659)     (74,099)
                         -----------  -----------  -----------  -----------

Net loss                 $  (155,250) $   (93,039) $(1,303,123) $  (464,144)
                         ===========  ===========  ===========  ===========

Basic and deiluted net
 loss per share:         $         -  $         -  $     (0.04) $     (0.02)

Weighted average number
 of common shares
 outstanding - basic and
 diluted                  32,590,850   22,757,100   31,589,531   22,757,100
                         ===========  ===========  ===========  ===========

                        GLOBALWISE INVESTMENTS, INC.
                   Condensed Consolidated Balance Sheets

                                   ASSETS
                                                 Unaudited
                                                  June 30,     December 31,
                                               -------------  -------------
                                                    2012           2011
                                               -------------  -------------

Current assets:
  Cash                                         $      17,366  $     140,271
  Accounts receivable, net                           400,168        335,453
  Prepaid expenses and other current assets           44,835         18,398
                                               -------------  -------------

    Total current assets                             462,369        494,122

Property and equipment, net                           72,112         32,771
Other assets                                          41,400         46,404
                                               -------------  -------------

    Total assets                               $     575,881  $     573,297
                                               =============  =============

                   LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
  Accounts payable and accrued expenses        $     999,909  $     389,080
  Accrued expenses, related parties                   17,494              -
  Deferred revenues                                  745,975        964,043
  Notes payable - current                          1,417,203        747,778
  Notes payable - related party - current            300,000              -
                                               -------------  -------------
    Total current liabilities                      3,480,581      2,100,901

Long-term liabilities:
  Deferred compensation                              234,107        215,011
  Notes payable - net of current portion           1,385,029      1,528,915
  Notes payable - related party                      276,707        262,707
  Deferred interest expense                           34,564         17,063
  Other long-term liabilities - related
   parties                                           171,575        157,859
                                               -------------  -------------

    Total long-term liabilities                    2,101,982      2,181,555
                                               -------------  -------------

    Total liabilities other than shares            5,582,563      4,282,456
Shares subject to mandatory redemption                              111,235
                                               -------------  -------------

    Total liabilities                              5,582,563      4,393,691

Commitments and contingencies
Excess of liabilities over assets (deficit)                -     (3,820,394)
                                               -------------  -------------
    Total liabilities and excess of
     liabilities over assets (deficit)             5,582,563        573,297
                                               -------------  -------------
Stockholders' deficit:
  Common stock, $0.001 par value, 50,000,000
   shares authorized; 32,590,850 shares issued
   and outstanding at March 31, 2012                  32,591              -
  Additional paid-in capital (deficit)               (52,975)             -
  Accumulated deficit                             (4,986,298)             -
                                               -------------  -------------
    Total stockholders' deficit                   (5,006,682)             -
                                               -------------  -------------
    Total liabilities and excess of
     liabilities over assets (deficit) and
     stockholders' deficit                     $     575,881  $     573,297
                                               =============  =============

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