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Rackwise, Inc. Announces First Quarter 2012 Financial Results

Rackwise, Inc. (OTCBB: RACK.OB) (the “Company”), a leading developer of data center infrastructure management (“DCiM”) software and service solutions, announced today its first quarter 2012 financial results. The Company’s results reflect strategic investments in corporate infrastructure and other measures designed to streamline operations, increase market penetration and accelerate near-term business growth.

Revenues

Revenues for the three months ended March 31, 2012 were $684,149 as compared to revenues of $536,475 for the three months ended March 31, 2011, an increase of $147,674, or 28%.

Gross profits

Gross profits for the three months ended March 31, 2012 and 2011 were $622,184 and $487,709, respectively, representing an increase of $134,475, or 28%. Gross profit margins were approximately 91% during both periods.

Operating expenses

Operating expenses increased by $1,876,515, or 191%, during the three months ended March 31, 2012 to $2,859,689 from $983,174 during the three months ended March 31, 2011. The increase primarily relates to recruiting and compensation costs associated with expansion of the sales force and research, development and product support staffs, in accordance with the Company’s strategic plan. Also contributing to this increase were additional legal and audit fees associated with public company reporting and expanded business activity, plus non-cash expenses related to stock-based compensation (including grants of stock options and restricted shares).

Net Loss

Net loss was $2,229,115, or $.02 per share, for the first quarter of 2012 compared to a loss of $899,127, or $.02 per share, for the same period in 2011.

“The first quarter of 2012 marked a transition period for Rackwise,” stated Jeff Winzeler, the Company’s Chief Financial Officer. “Our business plan is to gain immediate market share in the rapidly expanding DCiM market. To that end, we substantially increased our personnel headcount during the quarter, principally in the functional areas of sales and product research, development and support. We added 11 salespersons, bringing us to a full complement of sales staff covering the domestic and Latin America markets, positioning us well to execute our objectives. We also took steps during the quarter to streamline our operations, including closing offices in San Francisco, Las Vegas, and Los Angeles in favor of a new corporate headquarters in Folsom, California.”

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