COLUMBUS, Ohio--(BUSINESS WIRE)--GlobalWise Investments, Inc. (OTCQB: INLX) 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, announced financial results for the second quarter and six-month periods ended June 30, 2014.
Second Quarter Results
Total revenues for the three months ended June 30, 2014 were $326,352, as compared with $471,174 for the same period in 2013, a decrease of $144,822, or 31%, primarily attributable to decreases in revenues from the sale of software. Overall gross margins were 79% and 61% for the three months ended June 30, 2014 and 2013, respectively, an increase of 18%.
Total operating expenses were $574,939 for the three months ended June 30, 2014, as compared with $766,481 for the three months ended June 30, 2013, representing a decrease of $191,542 or 25%. The decrease in operating expenses is primarily due to a reduction in sales and marketing expense.
GlobalWise reported a net loss of $372,714 and $518,897 for the three months ended June 30, 2014 and 2013, respectively, representing a decrease in net loss of $146,183, or 28%.
For the six months ended June 30, 2014, the Company’s total revenues were $625,535, as compared with $826,046 for the same period in 2013, a decrease of $200,511 or 24%, primarily attributable to decreases in revenues from the sale of software and professional services. Overall gross margins were 79% and 56% for the six months ended June 30, 2014 and 2013, respectively, an increase of 23%.
Total operating expenses for the six months ended June 30, 2014 and 2013 were $1,166,512 and $1,567,755, respectively, a decrease of $401,243 or 26%. The decrease in operating expenses is primarily due to a reduction in sales and marketing expense and a decrease in administrative expenses from the reduction in personnel.
For the six months ended June 30, 2014 and 2013, the Company reported a net loss of $776,536 and $1,190,694, respectively, representing a decrease of $414,158 or 35%.
Positioning Company for Long-Term Growth and Profitability
Matthew L. Chretien, President and CEO of GlobalWise, stated, “In Q2 of 2014, Intellinetics continued to implement MarketCommand™, which we refer to as IntelliCloud™, our reseller program for print/imaging and IT solutions providers. We presently have five partners who are actively selling IntelliCloud based solutions.
“Our strategic shift in focus from premise-based, one-time sales to the new low-cost, cloud-based IntelliCloud model does bring a contraction of short-term revenue. In our model, sustained revenue growth is coupled with the increase in active IntelliCloud users, which will generate growing recurring revenue. The overall increase in operating margins reflect this migration to higher margin IntelliCloud based revenue impact,” Chretien concluded.
The following video link below captures the simplicity of IntelliCloud in action. Its power is in the simplicity of messaging and its delivery as a feature of the multi-function devices most businesses already own.
IntelliCloud™ Overview Video: http://www.intellinetics.com/video
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: www.Intellinetics.com.
Statements in this press release which are not purely historical, including statements regarding Intellinetics' intentions, beliefs, expectations, representations, projections, plans or strategies regarding the future are forward-looking statements. The forward-looking statements involve risks and uncertainties including, but not limited to, the risks associated with the effect of changing economic conditions, trends in the products markets, variations in the company's cash flow or adequacy of capital resources, market acceptance risks, technical development risks, and other risk factors. The company cautions investors not to place undue reliance on the forward-looking statements contained in this press release. Intellinetics disclaims any obligation and does not undertake to update or revise any forward-looking statements in this press release. Expanded and historical information is made available to the public by Intellinetics and its Affiliates on its website www.intellinetics.com or at www.sec.gov.
|GLOBALWISE INVESTMENTS, INC. and SUBSIDIARY|
|Condensed Consolidated Balance Sheets|
|June 30,||December 31,|
|Accounts receivable, net||229,603||144,071|
|Prepaid expenses and other current assets||46,621||39,242|
|Total current assets||657,316||443,873|
|Property and equipment, net||43,005||53,226|
|LIABILITIES AND STOCKHOLDERS' DEFICIT|
|Accounts payable and accrued expenses||$||677,673||$||502,646|
|Notes payable - current||846,000||711,266|
|Notes payable - related party - current||215,415||-|
|Total current liabilities||2,569,090||1,696,340|
|Notes payable - net of current portion||1,611,435||1,114,394|
|Notes payable - related party||40,000||222,915|
|Deferred interest expense||78,869||83,942|
|Other long-term liabilities - related parties||43,423||34,614|
|Total long-term liabilities||1,773,727||1,670,877|
Common stock, $0.001 par value, 50,000,000 shares authorized;
|Additional paid-in capital||4,912,814||4,912,814|
|Total stockholders' deficit||(3,617,729||)||(2,841,193||)|
|Total liabilities and stockholders' deficit||$||725,088||$||526,024|
|GLOBALWISE INVESTMENTS, INC. and SUBSIDIARY|
|Condensed Consolidated Statements of Operations|
|For the Three Months Ended June 30,||For the Six Months Ended June 30,|
|(As Restated)||(As Restated)|
|Sale of software||$||4,496||$||160,352||$||12,496||$||169,012|
|Software as a service||41,028||34,320||80,470||69,111|
|Software maintenance services||212,000||213,542||422,522||437,006|
|Third Party services||21,478||17,189||33,273||32,374|
|Cost of revenues:|
|Sale of software||1,260||123,748||7,704||245,054|
|Software as a service||6,941||6,893||13,870||13,803|
|Software maintenance services||31,076||32,374||62,823||60,324|
|Third Party services||18,631||14,663||27,228||36,665|
|Total cost of revenues||68,535||182,363||131,963||361,849|
|General and administrative||443,077||507,469||911,547||1,075,617|
|Sales and marketing||125,052||252,240||241,225||480,022|
|Total operating expenses||574,939||766,481||1,166,512||1,567,755|
|Loss from operations||(317,122||)||(477,670||)||(672,940||)||(1,103,558||)|
|Other income (expense)|
|Interest expense, net||(55,592||)||(41,227||)||(103,596||)||(102,606||)|
|Total other income (expense)||(55,592||)||(41,227||)||(103,596||)||(87,136||)|
|Basic and diluted net loss per share:||$||(0.01||)||$||(0.01||)||$||(0.02||)||$||(0.03||)|
Weighted average number of common shares outstanding - basic and diluted