Cortex Business Solutions Inc.
TSX VENTURE : CBX

Cortex Business Solutions Inc.

March 29, 2010 17:08 ET

Cortex Announces Q2 2010 Financial Results

Second Quarter 2010 Financial and Operational Highlights

CALGARY, ALBERTA--(Marketwire - March 29, 2010) -

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Cortex Business Solutions Inc. (TSX VENTURE:CBX) (the "Company") signed three major buying organizations to our Cortex Trading Partner Network (the "Network") during the second quarter and beginning of the third quarter of 2010. During the second quarter of 2010, the access and usage fee revenue grew 64% over the same quarter 2009 and 15% over the first quarter of 2010. This growth is the largest quarter-over-quarter growth in the history of this Company. The signing of the buying organizations is a substantial accomplishment for Cortex. The related suppliers and transactions associated with these organizations are anticipated to further accelerate our transaction and Network growth. 

Highlights of Q2 are:

  • The following are highlights about the projects and activities announced during the second quarter and beginning of the third quarter of 2010:
    • Cortex & Basware Announce Project with Apache Corporation
    • Cortex Announces Creation of Advisory Committee
    • Cortex & Powervision Announce Project with Large Calgary based Energy Trust
    • Cortex Announces Agreement with Basware
    • Cortex Announces Project with Murphy Oil
  • Total revenue for the quarter ended January 31, 2010 of $1,263,592. This is an increase of 297% over the same quarter ended January 31, 2009. Total revenue for the six months ended January 31, 2010 of $2,785,974, an increase of 409% over the same six months ended January 31, 2009. 
  • The Company had total cash inflow from all sources in the quarter ended January 31, 2010 of $1,756,558 compared to a total cash outflow from all sources of $(1,754,145) in the same three month period ended January 31, 2009.
  • Access and usage fee revenue has grown 64% or $174,492 (2010 - $447,742, 2009 - $273,250) over the same quarter 2009.
  • Volume of transactions flowing through the Network continues to grow, increasing 74% since fiscal year ended July 31, 2009 and 43% since Q1 2010. 
  • The Company has a net loss per share of $(0.01) for the quarter ended January 31, 2010. The net loss for the current quarter was $(744,084) compared to a loss of $(1,677,054) for the same quarter 2009. This is a 56% reduction in the net loss for the Company for the quarter ended January 31, 2010 compared to January 31, 2009. After the removal of non-cash compensation in the amount of $296,600 as discussed in the expense section of this document, stock based compensation expense of $93,911 and amortization in the amount of $31,132, the Company had a non-GAAP net loss for the quarter ended January 31, 2010 of $(322,441).
  • Deferred revenue collected in the quarter ended January 31, 2010 was $1,827,375. Included in this amount is prepayment of future monthly fees. 
  • On March 10, 2010 the Company announced that it entered into an agreement with a syndicate of underwriters (the "Underwriters"), led by Stonecap Securities Inc, formally CI Capital Markets Inc. and including Wolverton Securities Ltd., whereby the Underwriters have agreed to purchase, on a bought deal basis, 12,000,000 common shares (the "Common Shares") from treasury of the Company at a purchase price of $0.50 per Common Share (the "Issue Price") for gross proceeds of $6,000,000 (the "Offering"). The Company has granted the Underwriters an option to purchase up to an additional 2,000,000 Common Shares at the Issue Price exercisable up to 48 hours prior to closing of the Offering for additional gross proceeds of up to $1,000,000.

The Company continues to successfully implement its business plan, which has resulted in the addition of three major buying organizations joining the Network since October 31, 2009. These buying organizations will expose a larger number of suppliers to the Network. More suppliers on the Network will increase the transactions flowing through the Network which is expected to further grow our recurring access and usage fee revenue stream. 

The current economic downturn may encourage companies to focus on cost saving measures. The Company's services assist companies in this goal by providing them with an automated eProcurement solution which could assist in reducing their internal costs and improving controls. 

Management intends to hold quarterly conference calls to discuss future quarterly results starting in conjunction with our quarter ended April 30, 2010 financial release.

Selected Financial Information

The following table presents selected quarterly information for the quarters ended January 31, 2010 and 2009. 

  Three Months Ended January 31   Six Months Ended January 31  
  2010   2009   $ Change   % Increase (Decrease)   2010   2009   $ Change   % Increase (Decrease)  
Total Revenues $ 1,263,592   $ 318,113   $ 945,479   297 % $ 2,785,974   $ 546,926   $ 2,239,048   409 %
Total Expenses $ 2,007,676   $ 1,995,167   $ 12,509   1 % $ 3,602,067   $ 3,989,802   $ (387,735 ) (10 %)
Net loss $ (744,084 ) $ (1,677,054 ) $ (932,970 ) (56 %) $ (816,093 ) $ (3,442,876 ) $ (2,626,783 ) (76 %)
Net loss per share $ (0.01 ) $ (0.02 ) $ (0.01 ) (50 %) $ (0.01 ) $ (0.03 ) $ (0.02 ) (67 %)
Total assets $ 4,088,156   $ 3,307,910   $ 780,246   24 % $ 4,088,156   $ 3,307,910   $ 780,246   24 %
Total long-term financial liabilities   -     -     -   -     -     -     -   -  
Cash dividends   -     -     -   -     -     -     -   -  

About Cortex Business Solutions Inc.

Cortex Business Solutions Inc. is an industry leading service company that improves efficiencies, reduces costs and streamlines procurement and supply chain processes for its customers. Accessing the Cortex Trading Partner Network enhances the exchange of business critical documents, such as purchase orders, receipts and invoices resulting in improved cash flow management and business controls, while reducing day's outstanding and administrative costs. Cortex is a low cost, low risk solution that can be implemented quickly by leveraging its customers existing business environment - evolving business. For more information please visit our website at www.cortex.net.

Forward-Looking Statements
Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed under the heading "Risk Factors" and elsewhere in the Company's periodic filings with Canadian securities regulators. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The Company does not assume the obligation to update any forward-looking statement.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this news release.

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