Cortex Business Solutions Inc.

Cortex Business Solutions Inc.

November 23, 2010 16:30 ET

Cortex Announces Annual 2010 Financial Results and Share Issuance

Fiscal 2010 Financial and Operational Highlights

CALGARY, ALBERTA--(Marketwire - Nov. 23, 2010) - The fiscal year ended July 31, 2010 has been a year of significant achievements, in a period of economic instability. The Company's partnership strategy resulted in the signing of three new buying organizations to our Cortex Trading Partner Network ("CTPN" or "the Network"); further increasing the supplier's value proposition. The Network grew to over 3,000 companies' connected and experienced record growth in transactions resulting in record access & usage fees generated.

Cortex was successful in completing a bought deal financing on March 10, 2010, which resulted in the raising of $7 million dollars, including the over allotment. These funds will be instrumental in the continued growth strategy for the Company in both the Canadian and United States ("US") marketplace. During 2010, Cortex also announced the creation of an Advisory Committee made up of successful entrepreneurs and skills from multiple industries. The Advisory Committee members expand our knowledge and expertise across other industries and geographical locations.

While 2010 was a record year for Cortex, the strategic wins over the last year will assist in increasing recurring access and usage fee revenue during our 2011 fiscal year as the additional suppliers associated with the three additional buying organizations, Apache North America, Murphy Oil Canada and a large oil and gas energy trust company will increase the transactions flowing through the Network. The increase in transactions will come from either net new suppliers from the three new buying organizations or suppliers already on the Network who will increase their monthly transactions through transactions with multiple trading partners. Either of these transactional increases will increase monthly recurring access and usage fees revenue.

In addition, Cortex is continuing to invest into our US expansion program in preparation for our project with Apache in Houston to begin in the fall of this year. The signing of Petro-Hunt, LLC ("Petro-Hunt") to the Cortex Trading Partner Network ("the Network") not only increases Cortex's penetration into the US market, but it also further demonstrates the viability of the electronic invoicing solution we have developed with our partner Full Circle Systems ("Full Circle"). Cortex is excited about working with Full Circle and Petro-Hunt as the partnership with Full Circle provides tremendous opportunity for Cortex in 2011 and Petro-Hunt is the first of many US producers with the opportunity to leverage this partnership over the next year.

2010 Highlights include;

-- The Company achieved record recurring access and usage fee revenue of
$1.7 million in fiscal year 2010 ($1.1M- 2009), a 57% increase over
fiscal year 2009.

-- Total revenue recognized for the year ended July 31, 2010 was $4.3M
compared to $1.3M for the 2009 fiscal year then ended, an increase of
230% or $3.0M.

-- Under the Company's revenue recognition policy, there is $1.8M of
deferred revenue in 2010, compared to $438K in 2009.

-- Cash outflow from operations for 2010 improved to $(1,720,092) from
$(5,527,745) in 2009.

-- Cash inflow for the year was $10,468,714 compared to a $(3,596,597)
outflow for the preceding fiscal year end. Out of this amount,
$11,418,651 was cash received from investing activities from the
issuance of shares from the bought deal financing, warrant conversion,
Compensation Option exercises and stock option exercises; compared to
$2,281,301 from the same activities in 2009.

-- Cortex has over 3000 suppliers contracted to the Network and has
increased the average number of suppliers transacting monthly.

-- On November 3, 2009 the Company announced it had signed a new long term
service agreement with its largest customer. The agreement includes a
one year professional services agreement and a new five year service
agreement with an option to extend for an additional five years

-- Announced the signing of Apache Corporation to automate their North
American supply Chain, Murphy Oil Canada and a large oil and gas energy
trust company. Three significant strategic wins for the Company.

-- On June 3, 2010 the Company announced they have entered into 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.

-- On October 18, 2010, Cortex Business Solutions Inc. together with its US
partner, Full Circle announced the signing of Petro-Hunt onto the
Network. Petro-Hunt is a large Dallas based independent producer with
significant oil and gas operations throughout the United States. Signing
Petro-Hunt to the Network not only increases Cortex's penetration into
the US market, but it also further demonstrates the viability of the
electronic invoicing solution we have developed with Full Circle.

-- 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, including the
over-allotment, 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.

The Company continues to implement its business plan which has resulted in the accelerated growth of our Company, revenue, network and brand. Over the next twelve months, US growth is expected to increase customer, partnership and industry expansion opportunities.

During fiscal 2011, Cortex will continue expanding the Network, by adding additional buying organizations and supplier groups. The growth strategy includes a strong presence in the U.S. marketplace. Through current partnerships and potential new partnerships, Cortex will continue to grow the size of the Network, increasing access and usage fees and will continue to explore new revenue, industry and partnership opportunities in Canada and the US. In addition to growth from an ongoing strong relationship with Husky Energy, Cortex will begin to see increased revenue in fiscal 2011 from increased transaction volumes with Apache Corporation, a large oil and gas energy trust, Murphy and Petro-Hunt and their suppliers which have began transacting subsequent to 2010 year-end. Strategic partnerships with Full Circle, Basware and Powervision are expected to significantly increase Cortex's exposure in the marketplace resulting in faster than anticipated buying organizations utilizing the Cortex Solution.

The validation of Cortex Solutions in the marketplace together with a strong balance sheet at July 31, 2010, has increased the credibility and acceptance of the Cortex solutions resulting in numerous opportunities to expand. Management expects that the current business cycle in the oil and gas industry and proven success of Cortex Solutions will strengthen the sales pipeline and increase the growth of the Network in both the oil and gas industry in North America but new parallel industries as well. This market trend, in conjunction with our initiatives to add customers to the Network and the increase in focus of our sales organization on integrations should result in further revenue growth from both set-up fees as well as access and usage fees being obtained during fiscal 2011. Scrutiny of the current cash burn will continue and actions will be taken to restructure costs, additional equity financing and/or refocus resources to achieve the revenue growth anticipated that's necessary to sustain operations in the future.

Selected Annual Information

The following table presents selected annual information for the years ended July 31, 2010, 2009 and 2008.

% Increase
2010 2009 Change (Decrease)
Total Revenues $ 4,327,619 $ 1,335,105 $ 2,992,514 224%
Total Expenses 10,410,479 7,784,854 2,625,625 34%
Net loss (6,082,860) (6,449,749) (366,889) (6)%
Net loss per
share (0.05) (0.06) (0.01) (17)%
Total assets 12,667,107 2,839,253 9,827,854 346%
Total long-
liabilities - - - -
Cash dividends - - - -

% Increase
2009 2008 Change (Decrease)
Total Revenues $ 1,335,105 $ 2,243,054 $ (907,949) (40%)
Total Expenses 7,784,854 4,696,608 3,088,246 66%
Net loss (6,449,749) (2,453,554) (3,996,195) (163)%
Net loss per
share (0.06) (0.04) (0.02) 50%
Total assets 2,839,253 6,182,827 (3,343,574) (54%)
Total long-
liabilities - - -
Cash dividends - - -

As part of the Company's Employee Performance Management program ("EPM"), 166,000 common shares are to be issued to employees of the company, in lieu of bonus and/or salary.

About Cortex Business Solutions

Cortex Business Solutions Inc. is a leading eCommerce service company that improves efficiencies, reduces costs and streamlines procurement and supply chain processes for its customers. Accessing the Cortex 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 or contact the person listed below.

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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