Cortex Business Solutions Inc.
TSX VENTURE : CBX

Cortex Business Solutions Inc.

November 20, 2013 09:00 ET

Cortex Announces Fiscal 2013 Financial Results

CALGARY, ALBERTA--(Marketwired - Nov. 20, 2013) - Cortex Business Solutions Inc. ("Cortex" or the "Company") (TSX VENTURE:CBX) is pleased to announce the Company's July 31, 2013 Financial and Operational Highlights. A copy of the 2013 Consolidated Financial Statements and Management's Discussion and Analysis are available on Sedar (www.sedar.com).

Revenue was $6.2 million in fiscal 2013, compared to $4.9 million in fiscal 2012, reflecting a 25% growth in total revenue. Included in this revenue was a 33% growth in access and usage fees recurring revenue. While increasing revenue, the Company was able to reduce overall expenses by 6%. The combination of the revenue increase and expense decrease resulted in a 21% decrease in cash outflow from operating activities from $7,860,067 in fiscal 2012 to $6,198,720 in fiscal 2013. The impact to net loss was a 23% improvement from $9,303,590 in fiscal 2012 to $7,146,691 in fiscal 2013.

At the end of the fiscal 2013, Cortex had signed agreements with 74 buying organizations ("Hubs"), 31 more than at the end of fiscal 2012. At the end of fiscal 2013, 56 of the 74 Hubs were available to receive invoices from their suppliers electronically. Hubs are the main driving force for the growth in the Company as each new Hub brings a list of additional customers to the Network and provides additional destinations for existing users to send to.

"I'm pleased with our revenue growth in fiscal 2013. When you consider the downturn in the oil and gas sector, a 25% total revenue increase is a good accomplishment", said Art Smith President and CEO of Cortex. "Our investment in market expansion and the new technology platform generated excellent results. Productivity improvement and efficiencies gained from the new platform allowed us to reduce our cash outflow from operating activities by 21% while improving customer satisfaction and introducing new services".

Art Smith went on to say "fiscal 2014 is shaping up to be another positive year. The oil and gas sector has stabilized and activity is increasing. There is increased interest in both the existing and new services. Cortex continues to experience significant productivity and efficiency gains from the new platform. The combination of these factors should enable Cortex to drive forward on its business plan effectively in fiscal 2014".

Outlook

Cortex is seeing an increasing demand for our growing suite of solutions in the market place. With the launch of our new portal platform in July 2013, Cortex is raising the standard with the new interface, ease of use and ability to easily message others on the Network. There has been excellent feedback from our current customer base suggesting a functional advantage over competitors in this space and a solid product to introduce to the market place in addition to Cortex' current offerings.

Transactions over the Network continued to increase fiscal 2013 over fiscal 2012. The increased functionality of Portal, allowing customers self-propagation, profiling and messaging, is creating greater participation in the Network; resulting in more connections and higher transactions. Cortex will continue to release value added functionality into the Platform during fiscal 2014 that will provide additional revenue opportunities.

Cortex continues to see demand for the 100% eBilling solution and expects sales from this product line to accelerate. The first 100% eBilling customer is now live and the opportunities from this project will begin to materialize during the remainder of fiscal 2014.

Management expects fiscal 2014 to be a pivotal year as we capture additional market share and continue to grow the Network. Management will continue to balance investment in growth with operational cash flow.

Annual Results Conference Call
To call in for the live conference call please contact:
Toll-free dial-in number: (877) 888-4210
Local dial-in number: (416) 340-9432 (Toronto)
Time: 1:30 p.m. MST

A replay of the conference call will be available two hours after the call's completion and will expire by 9:59 pm MST on November 29, 2013. You may listen to the recording by calling toll-free (800) 408-3053 or (905) 694-9451. The password for the replay is 4243485.

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. For more information please visit our website at www.cortex.net

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

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.

Cortex Business Solutions Inc.
Consolidated Statements of Financial Position
(Prepared in Canadian dollars)

July 31 2013
July 31 2012
Assets
Current assets
Cash $ 5,179,066 $ 6,750,970
Short-term investments 50,000 -
Accounts receivable 651,782 847,847
Prepaid expenses and deposits 167,870 168,160
6,048,718 7,766,977
Property and equipment 573,761 611,082
Intangible assets 4,178,094 2,970,245
$ 10,800,573 $ 11,348,304
Liabilities
Current liabilities
Accounts payable and accrued liabilities $ 1,404,716 $ 1,842,431
Current portion of deferred revenue 539,853 710,598
1,944,569 2,553,029
Deferred revenue 4,500 342,368
1,949,069 2,895,397
Shareholders' Equity
Share capital 47,713,288 41,858,963
Warrants 980,941 753,202
Contributed surplus 6,492,495 5,029,271
Deficit (46,335,220 ) (39,188,529 )
8,851,504 8,452,907
$ 10,800,573 $ 11,348,304
Cortex Business Solutions Inc.
Consolidated Statements of Loss and Comprehensive Loss
For the years ended July 31, 2013 and 2012
(Prepared in Canadian dollars)

2013
2012
Revenue
Access and usage fees $ 5,459,909 $ 4,093,869
Integration fees 306,879 552,601
Set-up fees 397,350 290,847
6,164,138 4,937,317
Expenses
Salaries, employee benefits and subcontractor expense 8,892,724 8,714,802
General and administrative 985,681 1,056,770
Market expansion and product development 982,977 2,273,850
Commissions, credit card charges and rebates 686,955 507,400
Rent 351,682 322,493
Professional fees 200,902 181,896
Internet and hosting costs 106,674 124,363
Stock-based compensation 480,080 496,396
Amortization 667,275 603,562
13,354,950 14,281,532
Loss before the following (7,190,812 ) (9,344,215 )
Finance income 44,121 40,625
Net loss and comprehensive loss $
(7,146,691
) $
(9,303,590
)
Net loss per share-basic and diluted $
(0.03
) $
(0.05
)
Cortex Business Solutions Inc.
Consolidated Statements of Changes in Shareholders' Equity
(Prepared in Canadian dollars)

Number
of
Common
shares
Common
shares
stated
value
Number
of
Warrants
Warrants
stated
value
Contributed
surplus
Deficit Total
shareholders'
equity
Balance - July 31, 2011 177,222,248 $ 33,851,308 10,995,063 $ 1,135,282 $ 4,825,444 $ (29,884,939 ) $ 9,927,095
Net loss - - - - - (9,303,590 ) (9,303,590 )
Stock-based compensation - - - - 496,396 - 496,396
Options exercised for cash 5,028,409 925,573 - - - - 925,573
Transferred on exercise of options - 744,212 - - (744,212 ) - -
Issued in lieu of salaries and bonus 3,094,819 685,604 - - - - 685,604
Prospectus offering for cash 31,492,665 6,298,533 - - - - 6,298,533
Compensation Options exercised for cash 423,000 67,680 - - - - 67,680
Warrants issued on exercise of Compensation Options for cash - - 211,500 16,920 - - 16,920
Transferred on exercise of Compensation Options - 79,626 - - (79,626 ) - -
Warrants expired - - (1,400,000 ) (399,000 ) 399,000 - -
Issuance costs - (793,573 ) - - 132,269 - (661,304 )
Balance - July 31, 2012 217,261,141 41,858,963 9,806,563 753,202 5,029,271 (39,188,529 ) 8,452,907
Net loss - - - - - (7,146,691 ) (7,416,691 )
Stock-based compensation - - - - 480,080 - 480,080
Options exercised for cash 191,667 28,750 - - - - 28,750
Transferred on exercise of options - 31,855 - - (31,855 ) - -
Issued in lieu of salaries and bonus 2,774,567 536,247 - - - - 536,247
Prospectus offering for cash 38,920,000 6,168,820 22,379,000 1,148,140 - - 7,316,960
Expiration of Compensation Units - - (9,806,563 ) (753,202 ) 753,202 - -
Issuance costs - (911,347 ) - (167,199 ) 261,797 - (816,749 )
Balance - July 31, 2013 259,147,375 $ 47,713,288 22,379,000 $ 980,941 $ 6,492,495 $ (46,335,220 ) $ 8,581,504
Cortex Business Solutions Inc.
Consolidated Statements of Cash Flows
For the years ended July 31, 2013 and 2012
(Prepared in Canadian dollars)

2013
2012
Cash provided by (used in)
Operating activities
Net loss $ (7,146,691 ) $ (9,303,590 )
Items not affecting cash
Stock-based compensation 480,080 496,396
Amortization 667,275 603,562
Adjustment to salaries expense for salaries paid on shares (74,314 ) 10,687

(6,073,650
)
(8,192,945
)
Changes in non-cash working capital
(125,070
)
332,878
Net cash used in operating activities
(6,198,720
)
(7,860,067
)
Financing activity
Proceeds from issuance of shares and warrants, net of costs 6,528,961 6,647,402
Net cash from financing activity
6,528,961

6,647,402
Investing activities
Acquisition of property and equipment (170,335 ) (125,364 )
Software development costs (1,667,468 ) (1,481,941 )
Increase in short-term investments (50,000 ) -
Changes in non-cash working capital (14,342 ) (124,270 )
Net cash used in investing activities
(1,902,145
)
(1,731,575
)
Cash outflow
(1,571,904
)
(2,944,240
)
Cash, beginning of year 6,750,970 9,695,210
Cash, end of year $ 5,179,066 $ 6,750,970
Supplemental cash flows information:
Interest received during the year $ 44,121 $ 40,625
Non-cash transactions:
Issuance of shares in lieu of salaries and bonuses including prior years amounts accrued in accounts payable and accrued liabilities of $610,561 (2012 - $674,917) $ 536,247 $ 685,604

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