GlobalWise Investments Reports Second Quarter and Six-Month Results

COLUMBUS, Ohio--()--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%.

Six-Month Results

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.

Cautionary Statement

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
 
 
ASSETS
Unaudited
June 30, December 31,
2014 2013
 
Current assets:
Cash $ 381,092 $ 260,560
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
Other assets   24,767     28,925  
 
Total assets $ 725,088   $ 526,024  
 
LIABILITIES AND STOCKHOLDERS' DEFICIT
 
Current liabilities:
Accounts payable and accrued expenses $ 677,673 $ 502,646
Deferred revenues 614,990 482,428
Deferred compensation 215,012 -
Notes payable - current 846,000 711,266
Notes payable - related party - current   215,415     -  
Total current liabilities 2,569,090 1,696,340
 
Long-term liabilities:
Deferred compensation - 215,012
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  
 
Total liabilities 4,342,817 3,367,217
 
 
Stockholders' deficit:

Common stock, $0.001 par value, 50,000,000 shares authorized;
47,362,047 shares issued and outstanding at June 30, 2014 and December 31, 2013

54,363 54,363
Additional paid-in capital 4,912,814 4,912,814
Accumulated deficit   (8,584,906 )   (7,808,370 )
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
(Unaudited)
       
For the Three Months Ended June 30,   For the Six Months Ended June 30,
2014 2013   2014 2013
(As Restated) (As Restated)
Revenues:
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
Professional services 47,350 45,771 76,774 118,543
Third Party services 21,478 17,189 33,273 32,374
       
Total revenues   326,352     471,174       625,535     826,046  
 
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
Professional services 10,627 4,685 20,338 6,003
Third Party services   18,631     14,663       27,228     36,665  
 
Total cost of revenues   68,535     182,363       131,963     361,849  
 
Gross profit   257,817     288,811       493,572     464,197  
 
Operating expenses:
General and administrative 443,077 507,469 911,547 1,075,617
Sales and marketing 125,052 252,240 241,225 480,022
Depreciation   6,810     6,772       13,740     12,116  
 
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)
Derivative gain - - - 15,470
Interest expense, net   (55,592 )   (41,227 )     (103,596 )   (102,606 )
 
Total other income (expense) (55,592 ) (41,227 ) (103,596 ) (87,136 )
 
Net loss $ (372,714 ) $ (518,897 )   $ (776,536 ) $ (1,190,694 )
 
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

  47,362,047     47,362,047     47,362,047     43,182,708  

Contacts

GlobalWise Investments, Inc.
Matthew Chretien, Pres. & CEO
614-388-8909
matt@intellinetics.com

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Contacts

GlobalWise Investments, Inc.
Matthew Chretien, Pres. & CEO
614-388-8909
matt@intellinetics.com