CBX Cortex Business Solutions Inc.

Cortex Reports Record Fiscal Second Quarter 2014 Financial Results

Q2 Total Revenues up 32% to $2.0 Million; Recurring Access and Usage Revenues up 39% to $1.8 Million

CALGARY, ALBERTA--(Marketwired - Mar 27, 2014) - Cortex Business Solutions Inc. (TSX-VENTURE:CBX)(OTCQX:CTPNF), an enterprise e-procurement solutions company, reported financial results for the fiscal second quarter ended January 31, 2014.

Fiscal Q2 2014 Financial Highlights vs. Same Year-Ago Quarter

• Total revenues increased 32% to a record $2.0 million
• Revenue from recurring access and usage fees increased 39% to $1.8 million
• Total expenses decreased 4% to $3.3 million
• Net loss improved to $1.3 million or $(0.00) per diluted share, compared to a net loss of $1.9 million or $(0.01) per diluted share

Fiscal Q2 2014 Financial Results

Total revenues in the fiscal second quarter of 2014 increased 32% to $2.0 million, compared to $1.5 million in the fiscal second quarter of 2013. The increase in revenues was primarily due to increased recurring access and usage fees, which grew 39% in the second quarter to $1.8 million from $1.3 million in the year-ago quarter.

On a sequential basis, total revenues in the second quarter increased 11% from $1.8 million in the first quarter of 2014. Recurring access and usage fees increased 10% from $1.7 million in the first quarter of 2014.

Total expenses in the second quarter decreased 4% to $3.3 million as compared to the same year-ago quarter. Excluding non-cash expenses of stock-based compensation expense that increased $24,000 and amortization that increased $137,000, total expenses decreased 7% to $2.8 million from the year-ago quarter.

Net loss in the second quarter improved to $1.3 million or $(0.00) per diluted common share, compared to a net loss of $1.9 million or $(0.01) per diluted common share in the year-ago quarter. The improvement was primarily due to the increase in revenues and prudent expense management.

The Company improved its cash outflow by 46% (Q2 F2014 - $(1,312,744); Q2 F2013 - $(2,445,755)). This improvement is the result of increased revenue, productivity improvements and a reduction in capital spending.

The Company paid its annual Employee Performance Management bonus in the quarter. The total bonus paid in Q2 F2014 was $819,895 (Q2 F2013 - $936,449), of this $419,881 was paid in cash (Q2 F2013 - $443,696). The bonus paid in Q2 F2014 was included in accrued liabilities at the end of July 31, 2013 and the bonus paid in Q2 F2013 was included in accrued liabilities at the end of July 31, 2012.

At January 31, 2014, cash totaled $2.5 million, compared to $5.2 million at July 31, 2013. Subsequent to the end of the fiscal second quarter, the company completed a $10.0 million equity financing. The company continues to carry no debt.

Fiscal Q2 2014 Operational Metrics

• Signed six hubs onto the network for a total of 81, compared to eight signed in the year-ago quarter for a total of 64
• Active hubs on the network increased by two to a total of 62, compared to an increase of eight in the year-ago quarter to total 42
• Signed two new 100% e-billing customers, including Maverick Oilfield Services and X-Cel Energy Services, for a total of five, compared to zero in the year ago quarter since the product was not yet introduced
• Total suppliers transacting on the network increased 13% to 6,584, compared to 5,844 in the year-ago quarter
• Supplier initiated transactions increased 19% to 925,445, compared to 778,387 in the year-ago quarter
• Total transactions increased 16% to 3,039,967, compared to 2,622,069 in the year-ago quarter

Management Commentary

"Our record revenue in the second quarter also represented another quarter of sequential double-digit revenue growth," said Art Smith, president and CEO of Cortex. "This double-digit growth was on top of sequential single-digit growth in transaction volume, demonstrating the pricing power and increased revenue per supplier in our Cortex Trading Partner Network.

"We expect average revenue per supplier to continue to increase, particularly as we introduce additional service offerings, such as our 100% e-billing solution, which continues to garner growing interest and new signups. Our first customer using this solution is committed to onboarding approximately 4,000 of its customers and we expect this to generate meaningful revenues in fiscal 2014.

"Our transaction levels have continued to strengthen in the current third quarter, which reflects positive indicators in the broader macro environment for our customers in the oil and gas industry, such as an increase in oil rig utilization. As we work to expand our presence in the North American market, particularly in the U.S. where we see a robust pipeline of sales opportunities, we are confident the strategic steps we are taking today will result in steady recurring revenue growth and, ultimately, greater shareholder value."

Conference Call

Cortex will hold a conference call today at 4:30 p.m. Eastern time (2:30 p.m. Mountain time) to discuss its financial results for the second quarter ended January 31, 2014. The company's president and CEO, Art Smith, and senior vice president of U.S. operations and business development, Ryan Lailey, will host the conference call, followed by a question and answer period.

Date: Thursday, March 27, 2014

Time: 4:30 p.m. Eastern time (2:30 p.m. Mountain time)

Toll-free dial-in number: 1-800-565-0813

International dial-in number: 1-416-340-8527

Please call the conference telephone number ten minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 1-949-574-3860.

A replay of the conference call will be available after the call through April 3, 2014.

Toll-free replay number: 1-800-408-3053

Toll replay number: 1-905-694-9451

Replay ID: 2960712

About Cortex Business Solutions

Cortex Business Solutions Inc. (TSX-VENTURE:CBX)(OTCQX:CTPNF) is an enterprise e-Procurement solutions 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 clients' existing business environment. For more information, please visit www.cortex.net.

Forward-Looking Statements

Certain statements contained in this press release may constitute forward-looking statements. All statements other than statements of historical fact may be forward-looking statements. In particular, this press release contains forward-looking statements pertaining to meaning revenue growth from e-billing solution and recurring revenue growth. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Cortex believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon by investors. With respect to forward-looking statements contained in this press release, Cortex has made assumptions regarding, among other things: Cortex's continued success in gaining new customers in Canada and the United States, general economic and financial conditions, and other assumptions as set forth in the company's annual filings. Cortex's actual results could differ materially from those anticipated in these forward-looking statements as a result of risk factors that may include, but are not limited to: worse than expected general economic conditions in Canada and the United States, the inability of management to execute its business plan and manage growth successfully and the risk of slow service adoption. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect Cortex's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).

The forward-looking statements contained in this press release speak only as of the date of this press release and are expressly qualified, in their entirety, by this cautionary statement. Readers should not place undue reliance on forward-looking information. Except as required by law, the company undertakes no obligation to publicly update or revise any forward-looking statements.

Cortex Business Solutions Inc.
Condensed Consolidated Statement of Financial Position
(Prepared in Canadian dollars)
(unaudited)
		January 31		January 31
			2014		2013
Assets
Current assets
	Cash	$	2,525,626	$	5,179,066
	Accounts receivable		678,025		651,782
	Prepaid expenses and deposits		148,094		167,870
	Investments		50,000		50,000
			3,401,745		6,048,718
Property and equipment			414,551		476,735
Intangible assets			4,459,333		4,275,120
		$	8,275,629	$	10,800,573
Liabilities
Current liabilities
	Accounts payable and accrued liabilities	$	1,173,269	$	1,404,716
	Current portion of deferred revenue		262,195		539,853
			1,435,464		1,944,569
Deferred revenue			-		4,500
			1,435,464		1,949,069
Shareholders' Equity
Share capital			48,126,705		47,713,288
Accumulated other compehensive income			101,380		-
Warrants			980,941		980,941
Contributed surplus			6,784,095		6,492,495
Deficit			(49,152,956)	(46,335,220)
			6,840,165		8,851,504
		$	8,275,629	$	10,800,573

Cortex Business Solutions Inc.
Condensed Consolidated Statement of Loss and Comprehensive Loss
For the three months ended January 31, 2014 and 2013
(Prepared in Canadian dollars)
(unaudited)
		Three months ended January 31				Six months ended January 31
			2014		2013		2014		2013
Revenue
	Access and usage fees	$	1,829,303	$	1,318,275	$	3,485,118	$	2,556,171
	Integration fees		119,962		73,134		209,539		132,176
	Set-up fees		29,229		110,784		74,419		217,388
	Project management		5,575		-		5,575		-
			1,984,069		1,502,193		3,774,651		2,905,735
Expenses
Salaries, employee benefits and subcontract			2,094,378		2,282,151		4,358,501		4,392,199
General and administrative			314,461		233,910		601,696		464,343
Commissions, rebates and credit card charges			190,319		203,635		383,976		359,170
Rent			105,649		78,695		211,098		160,207
Professional fees			79,953		54,036		239,614		97,926
Internet and hosting costs			26,435		26,074		50,443		53,542
Market expansion and product development			-		228,710		-		558,880
Stock-based compensation			148,837		125,124		300,105		234,461
Amortization			305,079		168,284		461,032		337,421
			3,265,111		3,400,619		6,606,465		6,658,149
Loss before the following			(1,281,042)		(1,898,426)		(2,831,814)		(3,752,414)
Finance income			4,098		6,213		14,078		19,485
Net loss		$	(1,276,944)	$	(1,892,213)	$	(2,817,736)	$	(3,732,929)
Other comprehensive earnings
	Items that may be reclassified subsequently to net income (loss):
	Foreign exchange gain (loss) on foreign operations		101,380				101,380
Comprehensive earnings (loss)		$	(1,175,564)	$	(1,892,213)	$	(2,716,356)	$	(3,732,929)
Net loss per share-basic and diluted		$	0.00	$	(0.01)	$	(0.01)	$	(0.02)

Cortex Business Solutions Inc.
Condensed Consolidated Statement of Changes in Shareholders' Equity
(Prepared in Canadian dollars)
(unaudited)
	Number of Common shares		Common shares stated value	Number of Warrants		Warrants stated value		Contributed Surplus		Accumulated Other Comprehensive Income		Deficit		Total shareholders' equity
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	-		-	-		-		-		-		(3,732,929)		(3,732,929)
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	2,574,567		508,247	-		-		-		-		-		508,247
Issuance costs	-		(6,526)	-		-		-		-		-		(6,526)
Stock-based compensation	-		-	-		-		234,461		-		-		234,461
Expiration of Compensation units and warrants	-		-	(8,333,500)		(653,969)		653,969		-		-		-
Balance, January 31, 2013	220,027,375		42,421,289	1,473,063		99,233		5,885,846		-		(42,921,458)		5,484,910
Balance - July 31, 2013	259,147,375		47,713,288	22,379,000		980,941		6,492,492		-		(46,335,220)		8,851,501
Net loss	-		-	-		-		-		-		(2,817,736)		(2,817,736)
Foreign exchange translation of foreign operations										101,380				101,380
Options exercised for cash	65,852		13,480	-		-		-		-		-		13,480
Transferred on exercise of options	-		8,502	-		-		(8,502)		-		-		-
Issued in lieu of salaries and bonus	2,484,200		397,475	-		-		-		-		-		397,475
Issuance costs	-		(6,040)	-		-		-		-		-		(6,040)
Stock-based compensation	-		-	-		-		300,105		-		-		300,105
Balance - January 31, 2014	261,697,427	$	48,126,705	22,379,000	$	980,941	$	6,784,095	$	101,380	$	(49,152,956)	$	6,840,165

Cortex Business Solutions Inc.
Condensed Consolidated Statement of Cash Flows
For the three months ended January 31, 2014 and 2013
(Prepared in Canadian dollars)
(unaudited)
			Three months ended January 31				Six months ended January 31
				2014		2013		2014		2013
Cash provided by (used in)
Operating activities
	Net loss			$ (1,276,944)		$ (1,892,213)		$ (2,817,736)		$ (3,732,929)
	Items not affecting cash
		Stock-based compensation		148,837		125,124		300,105		234,461
		Amortization		305,079		168,284		461,032		337,421
		Salaries paid in shares		16,000		(72,020)		16,000		(78,242)
				(807,028)		(1,670,825)		(2,040,599)		(3,239,289)
Changes in non-cash working capital				(361,205)		(136,357)		(125,318)		(235,528)
Net cash used in operating activities
				(1,168,233)		(1,807,182)		(2,165,917)		(3,474,817)
Financing activities
	Proceeds from issuance of shares			-		-		-		22,224
	Proceeds from exercise of stock options, net of costs			-		-		13,480		-
	Share issuance costs			(3,282)		(4,084)		(6,037)		-
Net cash from (used in) financing activities				(3,282)		(4,084)		7,443		22,224
Investing activities
	Acquisition of property and equipment			(2,666)		(89,334)		(5,325)		(98,167)
	Software development costs			(226,654)		(439,721)		(577,732)		(802,550)
	Changes in non-cash working capital			-		(105,434)		-		(114,342)
Net cash used in investing activities				(229,320)		(634,489)		(583,057)		(1,015,059)
Effect of exchange rate changes on cash and cash equivalents held in foreign currency				88,091		-		88,091		-
Cash outflow				(1,312,744)		(2,445,755)		(2,653,440)		(4,467,652)
Cash, beginning of period				3,838,370		4,729,073		5,179,066		6,750,970
Cash, end of period			$	2,525,626	$	2,283,318	$	2,525,626	$	2,283,318
Non-cash transactions:
	Issuance of shares in lieu of salaries and bonuses including prior period amounts accrued		$	16,000	$	453,802	$	16,000	$	635,604

Liolios Group, Inc.Cody Slach or Greg FalesnikInvestor Relations Contacts1-949-574-3860CBX@Liolios.comBrisco Capital PartnersScott KoyichInvestor Relations Contact1-403-215-5979skoyich@briscocapital.com