Cortex Business Solutions Inc.
TSX VENTURE : CBX

Cortex Business Solutions Inc.

April 01, 2009 16:00 ET

Cortex Announces Q2 2009 Financial Results

Second Quarter 2009 Financial and Operational Highlights

CALGARY, ALBERTA--(Marketwire - April 1, 2009) - Cortex Business Solutions (TSX VENTURE:CBX) ("The Company") had a strong second quarter highlighted by strong recurring revenue growth (access and usage fees) and reached a milestone of 1,000 suppliers brought onto the Cortex Trading Partner Network as part of the Memorandum of Understanding signed in 2008.

Highlights of Q2 are:

- The Company announced the expansion of the previously announced project with one of Canada's top five integrated oil and gas companies to now onboard all its suppliers in all business units across Canada. As a result of the expansion of this project, Cortex expects to experience an accelerated expansion of their trading partner network.

- The Company signed set-up and integration contracts during the quarter having an aggregate value of $296,775. Of this amount, $272,070 has been deferred under our revenue recognition policy and $24,705 was recognized as revenue in the quarter under the set-up fees revenue stream. In accordance with the Company's revenue recognition policy, as prescribed by the CICA, these fees are required to be deferred and amortized into income over the life of the contract. The contract terms are typically 1 or 3 years. These set-up and integrations fees are leading indicators to growth in the access and usage revenue stream.

- Achieved quarterly access and usage fee revenue of $273,250. This is an increase of 80% over the quarter ended January 31, 2008.

- Launched a new QuikTikit™ Application on Smartphones. In conjunction with this new application being released, the Company joined the BlackBerry® alliance program. Membership in the BlackBerry® alliance program will help Cortex launch its newest solution - QuikTikit™ that runs on BlackBerry® Smartphones from Research In Motion (RIM). QuikTikit™ is a revolutionary solution that offers companies the ability to expedite their invoicing process and to retrieve billing information or service tickets produced in the field in a more timely and efficient manner. It uses the BlackBerry® Smartphone to remotely capture the signed image and accounting data from paper timesheets, goods, and service receipts and sends them securely through the Cortex Trading Partner Network directly into the Company's back office billing or accounting system for processing.

- The Company has signed over 1,000 customers onto its trading partner network, in relation to the Memorandum of Understanding signed during the fiscal year ended July 31, 2008.

- The Company entered into a strategic partnership with Powervision Software Inc. in March 2009. This alliance allows Cortex to leverage Powervision's expertise in document and workflow management solutions which directly aligns with Cortex's service of electronically connecting trading partners. The partnership introduces Cortex to Powervision's current oil and gas customer base, which complements our customer base and helps us extend our reach and create greater value in the marketplace for our existing and future customers.

- The Company had a net loss per share of $(0.016) for the second quarter of fiscal 2009 and $(0.033) per share for the six months ended January 31, 2009. The Company is executing its business plan and experiencing the losses anticipated during this growth phase.

Cortex continues to execute on its strategy and business plan in which management began to invest the $5.2 million raised on May 29, 2008 into our sales marketing and delivery organizations. The result of this investment continues to pay off in the second quarter of 2009 by adding new customers to our trading partner network. The Company's major project relating to the Memorandum of Understanding signed during the fiscal year ended July 31, 2008 is continuing, and together with our partnership with TELUS, our alliance with Research in Motion, activity in the marketplace, and acceptance of our solutions, demand for our solution has increased significantly. Our sales opportunities are the strongest in Company history. Management is focused on securing sales and execution of our business plan.

The steady growth of suppliers signing on to the trading partner network is encouraging and aligns with the Company's business plan. The recurring access and usage fees from these new users have been slower to materialize than expected due to circumstances beyond the Company's control. During the quarter, management continued to control and reduce costs, and as part of these reductions the compensation committee has agreed to award the senior management 364,545 stock options on March 31, 2009 at an exercise price of $0.22 in exchange for a 10% reduction in salary. These reductions will assist the Company in reaching its goal of attaining positive cash flow and continuing to execute its growth strategy.

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.

Cortex products and services are non-intrusive and allow our customers the freedom to leverage and optimize their existing processes and information technology assets when it makes the best business sense for them. This approach improves the productivity, cash flow and profitability of our customers, while avoiding the risk and delays associated with large information technology or business processes re-engineering initiatives.

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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