GSB Globalscape Inc

Results in Line with Expectations During Period of Organization and Program Enhancements

GlobalSCAPE, Inc. (NYSE MKT: GSB), a leading developer of secure information exchange solutions, today announced its financial results for the three month period ended March 31, 2014.

Revenue for the three months ended March 31, 2014, was $5.7 million compared to revenue of $5.9 million for the three months ended March 31, 2013.

The Company’s deferred revenue, which the Company believes can be an indicator of future revenue trends, was $10.7 million at March 31, 2014, compared to $9.8 million at March 31, 2013, a 9% increase.

For the three months ended March 31, 2014, the Company had net income of $534,000 or $0.03 per share, compared to a net income of $517,000, or $0.03 per share, for the three months ended March 31, 2013.

Adjusted EBITDA Excluding Infrequent Items was $1 million for the three months ended March 31, 2014, compared to $1.2 million for the three months ended March 31, 2013. Adjusted EBITDA Excluding Infrequent Items is not a measure of financial performance under GAAP and has limitations as an analytical tool and when assessing the Company’s operating performance. Adjusted EBITDA Excluding Infrequent Items should not be considered in isolation or as a substitute for net income or other income statement data prepared in accordance with GAAP.

Cash and cash equivalents were $10.7 million at March 31, 2014, up from $9.5 million at December 31, 2013.

“Our bottom line performance in the first quarter was solid with earnings per share and positive Adjusted EBITDA essentially matching the year ago period in spite of slightly weaker revenue. In addition, our cash balances at the end of the first quarter grew by about $1.2 million from the end of the prior quarter,” said James Bindseil, President and Chief Executive Officer of Globalscape. “During the fourth quarter of 2013, we began making several improvements to our sales and engineering organizations, sales and marketing programs and product development initiatives and timelines designed to drive long-term revenue growth. We are confident the sales leadership we have in place, the enhanced sales and marketing programs they are pursuing, and the new product features and functionality we will introduce during 2014 will deliver improved financial results in future quarters.”

Conference Call May 13, 2014 at 4:30 p.m. ET

Globalscape management will hold a conference call Tuesday, May 13, 2014 to discuss financial results for the first quarter of 2014 and other corporate matters at 4:30 p.m. Eastern Time/3:30 p.m. Central Time. Those wanting to join should dial 1-877-941-4775 and use Conference ID # 4682884. A live webcast of the conference call will also be available in the investor relations page of the company's website at www.Globalscape.com. A webcast replay of the conference call will be available on the Company’s website through June 13, 2014.

About Globalscape

San Antonio, Texas-based GlobalSCAPE, Inc. (NYSE MKT: GSB) ensures the reliability of mission-critical operations by securing sensitive data and intellectual property. Globalscape’s suite of solutions features EFT, the industry-leading enterprise file transfer solution that delivers military-grade security and a customizable platform for achieving best-in-class control and visibility of data in motion or at rest, across multiple locations. Founded in 1996, Globalscape is a leading enterprise solution provider of secure information exchange software and services to thousands of customers, including global enterprises, governments, and small businesses. For more information, visit www.globalscape.com or follow the blog and Twitter updates.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words "would," "exceed," "should," "anticipates," "believe," "steady," "dramatic," and variations of such words and similar expressions identify forward-looking statements, but their absence does not mean that a statement is not a forward-looking statement. These forward-looking statements are based upon the Company’s current expectations and are subject to a number of risks, uncertainties and assumptions. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Among the important factors that could cause actual results to differ significantly from those expressed or implied by such forward-looking statements are risks that are detailed in the Company’s Annual Report on Form 10-K for the 2013 calendar year, filed with the Securities and Exchange Commission on March 27, 2014.

        Summary Financial Data   GlobalSCAPE, Inc. Statements of Operations (Unaudited)

(In thousands, except per share amounts)

  Three months ended March 31, 2014 2013   Operating Revenues: Software license $ 1,545 $ 1,957 Maintenance and support 3,568 3,283 Professional services 237 399 Others   378     240   Total Revenues 5,728 5,879 Operating Expenses: Cost of revenues 204 263 Selling, general and administrative 4,049 3,850 Research and development 527 762 Depreciation and amortization   141     257   Total operating expenses   4,921     5,132   Income from operations 807 747 Other expense, net   (20 )   (47 ) Income before income taxes 787 700 Income tax expense   253     183   Net income $ 534   $ 517   Comprehensive income $ 534   $ 517     Net income per common share - basic $ 0.03 $ 0.03 Net income per common share - diluted $ 0.03 $ 0.03 Average shares outstanding: Basic 19,534 18,444 Diluted 20,394 18,982           GlobalSCAPE, Inc. Balance Sheets (Unaudited)

(In thousands except per share amounts)

  March 31, December 31, 2014     2013   Assets Current assets: Cash and cash equivalents $ 10,687 $ 9,455

Accounts receivable (net of allowance for doubtful accounts of $257 and $154 in 2014 and 2013, respectively)

3,406 3,765 Income tax receivable 97 113 Current deferred tax assets 109 184 Prepaid expenses   274         349   Total current assets 14,573 13,866   Fixed assets, net 734 744 Investment in certificate of deposit 3,138 3,122 Capitalized software development costs, net 1,711 1,028 Goodwill 12,712 12,712 Deferred tax asset 1,137 1,476 Other assets   144         144   Total assets $ 34,149       $ 33,092     Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 693 $ 655 Accrued expenses 940 898 Deferred revenue 8,718 9,092 Income taxes payable - - TappIn earn out, current portion - - Long term debt, current portion   1,298         1,397   Total current liabilities 11,649 12,042   Deferred revenue, non-current portion 1,998 1,708 TappIn earn out, non-current portion - -

Long-term debt, non-current portion

2,747 2,989 Other long term liabilities 56 60   Commitments and contingencies - -   Stockholders’ equity:

Preferred stock, par value $0.001 per share, 10,000,000 authorized, no shares issued or outstanding

- -

Common stock, par value $0.001 per share, 40,000,000 authorized, 19,645,236 and 19,592,117 issued March 31, 2014 and December 31, 2013

20 20 Additional paid-in capital 16,706 15,834

Treasury stock, 403,581 shares, at cost, at March 31, 2014 and December 31, 2013.

(1,452 ) (1,452 ) Retained earnings   2,425         1,891   Total stockholders’ equity   17,699         16,293   Total liabilities and stockholders’ equity $ 34,149       $ 33,092             GlobalSCAPE, Inc. Statements of Cash Flows (Unaudited)

(In thousands)

For the three months ended March 31, 2014 2013 Operating Activities: Net income $ 534 $ 517 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 141 257 Stock-based compensation 126 192 Deferred taxes 414 (47 ) Bad debt expense (recoveries) 108 36

Excess tax deficiency from share-based compensation

  173     -   Subtotal before changes in operating assets and liabilities 1,496 955 Changes in operating assets and liabilities: Accounts receivable 251 139 Prepaid expenses 75 9 Income tax payable (157 ) 84 Accounts payable 38 115 Accrued expenses 42 (353 ) Deferred revenue - M&S (84 ) 59 Other long-term liabilities   (4 )   (1 ) Net cash provided by (used for) operating activities   1,657     1,007   Investing Activities: Purchase of property and equipment (63 ) (18 ) Software development costs (751 ) (171 ) Purchase of Tappin, Inc. and earnout payments - (500 ) Interest reinvested in certificate of deposit   (16 )   (16 ) Net cash provided by (used for) investing activities (830 ) (705 ) Financing Activities: Proceeds from exercise of stock options 919 4 Net tax effect of stock option and restricted stock activity (173 ) - Notes payable principle payments   (341 )   (329 ) Net cash provided by (used for) financing activities 405 (325 ) Net increase (decrease) in cash 1,232 (23 ) Cash at beginning of period   9,455     8,079   Cash at end of period $ 10,687   $ 8,056     Supplemental disclosure of cash flow information: Cash paid during the period for: Interest on notes payable $ 49   $ 64   Income taxes $ 45   $ 160       GlobalSCAPE, Inc. Adjusted EBITDA Excluding Infrequent Items (Unaudited) (In thousands)       Three Months Ended March 31, 2014     2013 Net income (loss) 534 517 Add (subtract) items to determine adjusted EBITDA excluding infrequent items: Income tax expense 253 183 Other expense 20 47 Depreciation and amortization Total depreciation and amortization 141 257

Amortization of capitalized software development costs

(68 ) (34 ) Stock-based compensation expense 126 192 Infrequent item:     Adjusted EBITDA excluding infrequent items $ 1,006   $ 1,162    

Adjusted EBITDA [Earnings before Interest, Taxes, Total Other Income (Expense), Depreciation, and Amortization (including amortized stock-based compensation expense)] Excluding Infrequent Items is not a measure of financial performance under generally accepted accounting principles and should not be considered a substitute for net income. Adjusted EBITDA Excluding Infrequent Items has limitations as an analytical tool and when assessing our operating performance. Adjusted EBITDA Excluding Infrequent Items should not be considered in isolation or as a substitute for net income or other income statement data prepared in accordance with generally accepted accounting principles.

GlobalSCAPE, Inc.Jim AlbrechtChief Financial Officerir@Globalscape.comorDarrow Associates, Inc.Jim Fanucchi, 408-404-5400ir@Globalscape.com