GlobalWise (GWIV) Reports Third Quarter 2012 Financial Results and Revised Guidance

COLUMBUS, OH — (Marketwire) — 11/15/12 — 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 third quarter and nine months ended September 30, 2012.

Financial Highlights for the Third Quarter ended September 30, 2012:

• Total revenue increased by 15% to $711,737 compared to $617,026 in the year-ago third quarter;
• Gross profit improved to $484,205, a 23% increase over the year-ago third quarter of $395,104;
• Gross profit margin increased to 68% compared to 64% in the year-ago third quarter;
• Operating expenses, excluding non-recurring and non-cash expenses totaling $206,800, increased to $682,976 from $438,821 in the year-ago third quarter; and
• Adjusted EBITDA (as defined below) for the third quarter was ($192,034) compared to ($34,569) in the year-ago third quarter.

Financial Highlights for the Nine Months ended September 30, 2012:

• Total revenue increased 36% to $1,959,350 compared to $1,438,203 in the year-ago nine month period;
• Gross profit improved by 43% to $1,137,709 compared to $794,748 in the year-ago nine month period;
• Gross profit margin increased to 58% compared to 55% in the year-ago nine month period;
• Operating expenses, excluding non-recurring and non-cash expenses totaling $987,800, increased to $1,730,945 compared to $1,228,510 in the year-ago nine month period; and
• Adjusted EBITDA (as defined below) for the nine months ended September 30, 2012, was ($572,062) compared to ($403,481) in the year-ago nine month period.

“Excluding non-recurring and non-cash charges, our operating expenses were materially unchanged in the third quarter 2012 vs. the second quarter 2012 at around $680,000,” stated William J. “BJ” Santiago, CEO of GlobalWise. “We expect operating expenses to remain relatively stable at current levels as revenue increases. We’re seeing a continued increase in channel partner sales activity and are currently on track to achieve steady revenue growth in the fourth quarter.”

Revised Fiscal Year 2012 Guidance:

Based upon the Company’s current sales funnel and recent Channel Partner activity, GlobalWise currently expects annual revenue in 2012 to be in the range of $2.8 million to $3.3 million.

Non-GAAP Financial Measure:

In addition to presenting financial results in accordance with generally accepted accounting principles, or GAAP, this earnings release also presents adjusted earnings before interest, taxes, depreciation and amortization, share based payments and expenses that management believes will not recur in future periods, including certain acquisition-related expenses (“Adjusted EBITDA”). Adjusted EBITDA is calculated by deducting operating and other expenses from gross profit and excluding amounts related to interest expense, income tax expense or benefit, depreciation expense, amortization expense, non-cash share-based payments, acquisition-related expenses and any gain or loss on disposal of assets. This non-GAAP financial measure is intended to provide investors with additional insight into our ongoing operating performance. This non-GAAP financial measure should be considered in conjunction with, but not as a substitute for, the financial information presented in accordance with GAAP.

A reconciliation of the Company’s GAAP Net (Loss) for the quarters and nine months ended September 30, 2011 and 2012 to its non-GAAP Adjusted EBITDA for the same periods is provided below:

                               For the Three Months    For the Nine Months
                                Ended September 30,    Ended September 30,
                               --------------------  ----------------------
                                  2012       2011        2012        2011
                               ---------  ---------  -----------  ---------

Net Loss                        (492,607)   (91,749)  (1,795,731)  (555,893)
Depreciation                       6,737      9,148       21,174     30,281
Interest Expense, net             87,036     48,032      214,695    122,131
Non-Recurring, Non-Cash
 Compensation included in SG&A   206,800          -      206,800          -
Non-Recurring Public
 Transaction Related Expenses
 included in SG&A                      -          -      781,000          -
                               ---------  ---------  -----------  ---------
  Adjusted EBITDA              $(192,034) $ (34,569) $  (572,062) $(403,481)
                               =========  =========  ===========  =========

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

                           For the Three Months       For the Nine Months
                            Ended September 30,       Ended September 30,
                         ------------------------  ------------------------
                             2012         2011         2012         2011
                         -----------  -----------  -----------  -----------

Revenues:
  Sale of software
   licenses without
   professional services $    84,134  $    60,844  $   140,812  $    97,644
  Sale of software
   licenses with
   professional services     307,167      308,447      720,562      551,211
  Software as a service       25,425       41,575       79,062      110,902
  Software maintenance
   services                  201,539      148,238      574,848      462,480
  Consulting services         93,472       57,922      444,066      215,966
                         -----------  -----------  -----------  -----------

    Total revenues           711,737      617,026    1,959,350    1,438,203
                         -----------  -----------  -----------  -----------

Cost of revenues:
    Sale of software
     licenses without
     professional
     services                  8,271        3,810       40,103       13,261
    Sale of software
     licenses with
     professional
     services                109,229      124,894      372,084      354,384
    Software as a
     service                   7,478        7,057       21,372       20,573
    Software maintenance
     services                 34,719       29,757       96,003       81,929
    Consulting services       67,836       56,404      292,080      173,308
                         -----------  -----------  -----------  -----------

      Total cost of
       revenues              227,532      221,922      821,641      643,455
                         -----------  -----------  -----------  -----------

Gross profit                 484,205      395,104    1,137,709      794,748
                         -----------  -----------  -----------  -----------

Operating expenses:
    General and
     administrative          589,403      229,445    1,758,602      731,079
    Sales and marketing      293,636      200,228      938,969      467,150
    Depreciation               6,737        9,148       21,174       30,281
                         -----------  -----------  -----------  -----------

      Total operating
       expenses              889,776      438,821    2,718,745    1,228,510
                         -----------  -----------  -----------  -----------

Loss from operations        (405,571)     (43,717)  (1,581,036)    (433,762)

Other income (expense)

  Interest expense, net      (87,036)     (48,032)    (214,695)    (122,131)
                         -----------  -----------  -----------  -----------

Net Loss                 $  (492,607) $   (91,749) $(1,795,731) $  (555,893)
                         ===========  ===========  ===========  ===========

Basic and diluted net
 loss per share          $     (0.01) $     (0.00) $     (0.06) $     (0.02)
                         ===========  ===========  ===========  ===========

Weighted average number
 of common shares
 outstanding - basic and
 diluted                  33,022,913   22,757,100   32,082,486   22,757,100
                         ===========  ===========  ===========  ===========

Adjusted EBITDA:
Net Loss                    (492,607)     (91,749)  (1,795,731)    (555,893)
Depreciation                   6,737        9,148       21,174       30,281
Interest Expense, net         87,036       48,032      214,695      122,131
Non-Recurring, Non-Cash
 Compensation included
 in SG&A                     206,800            -      206,800            -
Non-Recurring Public
 Transaction Related
 Expenses included in
 SG&A                              -            -      781,000            -
                         -----------  -----------  -----------  -----------
  Adjusted EBITDA        $  (192,034) $   (34,569) $  (572,062) $  (403,481)
                         ===========  ===========  ===========  ===========

                        GLOBALWISE INVESTMENTS, INC.
                   Condensed Consolidated Balance Sheets

                                   ASSETS

                                                (Unaudited)
                                               September 30,   December 31,
                                               -------------  -------------
                                                    2012           2011
                                               -------------  -------------

Current assets:
  Cash                                         $      21,205  $     140,271
  Accounts receivable, net                           281,206        335,453
  Prepaid expenses and other current assets           51,246         18,398
                                               -------------  -------------
    Total current assets                             353,657        494,122

Property and equipment, net                           65,375         32,771
Other assets                                          39,318         46,404
                                               -------------  -------------

    Total assets                               $     458,350  $     573,297
                                               =============  =============

                   LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
  Accounts payable and accrued expenses        $   1,024,984  $     389,080
  Accrued expenses, related parties                   30,405              -
  Deferred revenues                                  586,009        964,043
  Derivative liability                                     -              -
  Convertible notes payable, net of discount          97,500              -
  Notes payable - current                          1,446,310        747,778
  Notes payable - related party - current            370,000              -
                                               -------------  -------------
    Total current liabilities                      3,555,208      2,100,901

Long-term liabilities:
  Deferred compensation                              245,357        215,011
  Notes payable - net of current portion           1,304,650      1,528,915
  Notes payable - related party - net of
   current portion                                   276,707        262,707
  Deferred interest expense                           39,564         17,063
  Other long-term liabilities - related
   parties                                           169,964        157,859
                                               -------------  -------------

    Total long-term liabilities                    2,036,242      2,181,555
                                               -------------  -------------

    Total liabilities other than shares            5,591,450      4,282,456
Shares subject to mandatory redemption                     -        111,235
                                               -------------  -------------

    Total liabilities                              5,591,450      4,393,691

Commitments and contingencies
Excess of liabilities over assets (deficit)                -     (3,820,394)
                                               -------------  -------------
    Total liabilities and excess of
     liabilities over assets (deficit)             5,591,450        573,297
                                               -------------  -------------
Stockholders' deficit:
  Common stock, $0.001 par value, 50,000,000
   shares authorized; 33,022,913 shares issued
   and outstanding at September 30, 2012              33,023              -
  Additional paid-in capital                         312,783              -
  Accumulated deficit                             (5,478,906)             -
                                               -------------  -------------
    Total stockholders' deficit                   (5,133,100)             -
                                               -------------  -------------
    Total liabilities and excess of
     liabilities over assets (deficit) and
     stockholders' deficit                     $     458,350  $     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
Investors@MissionIR.com