Cortex Business Solutions Inc.
TSX VENTURE : CBX

Cortex Business Solutions Inc.

June 16, 2010 10:00 ET

Cortex Announces Q3 2010 Financial Results

Third Quarter 2010 Financial and Operational Highlights

CALGARY, ALBERTA--(Marketwire - June 16, 2010) - In the third quarter 2010 Cortex (TSX VENTURE:CBX) began three new major projects, completed a bought deal financing and began an accelerated expansion program. Overall revenue declined during the three months ended April 30, 2010, as a result of reduced project management revenue, in line with expectations. Over the next two quarters, revenue associated with the expansion of the Cortex Trading Partner Network to the three additional buying organizations, Apache North America, Murphy Oil Canada and the Calgary Based Energy Trust is expected to increase monthly recurring access and usage fees revenue as well as project management and invoiced set up fees revenue. Cortex has begun investing into our US expansion program in preparation for our projejct with Apache in Houston to begin in the fall of this year.

Highlights of Q3 are:

  • Total revenue for the quarter ended April 30, 2010 of $897,822. This is an increase of 162% over the same quarter ended April 30, 2009. Total revenue for the nine months ended April 30, 2010 of $3,683,796, an increase of 309% over the same nine months ended April 30, 2009. 
  • The Company had cash inflow from financing activities in the quarter ended April 30, 2010 of $7,430,401 compared to no cash inflow or outflow from financing activities in the same three month period ended April 30, 2009.
  • The total cash outflow from operating activities was less during the three month period ended April 30, 2010 at $(613,272) from $(1,269,726).
  • Access and usage fee revenue has grown 50% or $148,880 (2010 - $448,146, 2009 - $299,266) over the same quarter 2009.
  • The Company recorded a net loss per share of $(0.01) for the quarter ended April 30, 2010. The net loss for the current quarter was $(1,429,583) compared to a loss of $(1,611,614) for the same quarter 2009. This is a 12% reduction in the net loss for the Company for the quarter ended April 30, 2010 compared to April 30, 2009. After the removal of stock based compensation expense of $407,029 and amortization in the amount of $38,716, the Company had a non-GAAP net loss for the quarter ended April 30, 2010 of $(983,838) compared to $(1,545,316) for the same quarter ended April 30, 2009. 
  • On March 30, 2010 the Company closed a "Bought Deal" financing with a syndicate of underwriters (the "Underwriters"), led by Stonecap Securities and including Wolverton Securities Ltd., whereby the Underwriters agreed to purchase, on a bought deal basis, 14,000,000 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 $7,000,000 (the "Offering").
  • Of the 13,050,000 warrants which expired on May 29, 2010, the warrant holders exercised 12,704,250 or 97%, leaving 345,750 warrants to expire. The Company received gross proceeds of $3,811,275 on warrant conversion.
  • On June 3, 2010 the Company announced an agreement to jointly develop and market an integrated solution between Full Circle's DocVue workflow and document management solution and the Cortex Trading Partner Network. Full Circle, a leading solutions provider to mid-tier oil and gas companies in the United States, is focused on providing its customers with document management, imaging and workflow applications integrated with the industry leading accounting, land, engineering, and compliance software.

The Company continues to implement its business plan and focus on an accelerated expansion program, which has resulted in the addition of three major buying organizations joining Cortex since October 30, 2009. These buying organizations will expose a larger number of suppliers to Cortex Trading Partner Network (the "Cortex Network" or 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. 

For more information, please refer to the April 30, 2010 Financial Statements and Management Discussion and Analysis which can be found on SEDAR. 

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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