CBX Cortex Business Solutions Inc.

Cortex Reports Record Fiscal Third Quarter 2014 Financial Results

Q3 Total Revenues up 46% to $2,390,652; Recurring Access and Usage Revenues up 44% to $2,070,174

CALGARY, ALBERTA--(Marketwired - Jun 16, 2014) - Cortex Business Solutions Inc. (TSX-VENTURE:CBX)(OTCQX:CTPNF), an enterprise e-Procurement solutions company, reported financial results for the fiscal third quarter ended April 30, 2014.

Fiscal Q3 2014 Financial Highlights vs. Same Year-Ago Quarter

• Total revenues increased 46% to a record $2,390,652.
• Revenue from recurring access and usage fees increased 44% to $2,070,174.
• Net cash used in operating activities improved to $(860,456) compared to $(1,155,584).

Management Commentary

"The fiscal third quarter marked the highest quarterly revenue in our company's history as well as the third sequential quarter of double-digit revenue growth," said Art Smith, president and CEO of Cortex. "These record results were driven by continued robust growth in suppliers transacting on the network, the rollout of value-added services and accelerated traction in the U.S. market."

"Along those lines, we continue to execute on our plan to penetrate the U.S. markets. We believe the strategic initiatives we are making, such as ramping our U.S. sales force, will allow us to capitalize on the tremendous, untapped opportunity in this market. In fact, U.S. revenues, which grew by 43% during the quarter, will play an integral role in driving top line growth."

"Looking ahead, our overall activity in the fiscal fourth quarter remains strong, both in terms of transaction volume and the onboarding of new customers to the network. As our customer base expands, we are confident that the introduction of additional service offerings will result in recurring revenue growth, and ultimately, profitability."

Fiscal Q3 2014 Financial Results

Total revenues in the fiscal third quarter of 2014 increased 46% to $2,390,652 compared to $1,634,469 in the fiscal third quarter of 2013. The key growth was in the access and usage revenue stream, which increased 44% as the result of increased billable suppliers on the Network and increased transactions flowing through the Network.

On a sequential basis, total revenues increased 20% to $2,390,652, compared to $1,984,069 in the second quarter of 2014. Recurring access and usage fees increased 13% to $2,070,174 in the third quarter of 2014 from $1,829,303 in the second quarter of 2014. This growth can be attributed to an increase in the number of suppliers transacting on the Network.

Net cash used in operating activities in the third quarter improved to $(860,456) compared to $(1,155,584) in the year-ago quarter. The improvement in cash outflow is the result of the increase in the revenue as well as the monitoring of expenditures across the organization.

Total expenses in the third quarter increased 20% to $4,125,881 compared to the same year-ago quarter. Expenses in the quarter include bonus provisions of $531,274. Of this, $301,274 is with respect to the employee performance management program (April 30, 2013 - $263,613), of which approximately $158,000 will be settled through issuance of common shares. An additional $230,000 was accrued based on approval received at the June 12, 2014 AGM for incentive compensation for leadership members of Cortex, payable by way of common shares. The Company will see further compensation increases in fiscal fourth quarter of 2014 as the Company increases its sales force to focus on its U.S. growth strategy.

Net loss in the third quarter was $1,716,619 or $(0.01) per diluted common share, compared to a net loss of $1,809,062 or $(0.01) per diluted common share in the year-ago quarter.

At April 30, 2014, cash totaled $10,669,125 compared to $5,179,066 at July 31, 2013. During the fiscal third quarter, the company completed a $10,000,000 equity financing. The company continues to carry no debt.

Fiscal Q3 2014 Operational Metrics

• Signed three buying organizations onto the network for a total of 82, compared to five signed in the year-ago quarter for a total of 69
• Active buying organizations on the network increased by seven for a total of 69, compared to the year-ago quarter for a total of 51
• Signed four new 100% e-billing customers for a total of 12, compared to zero in the year ago quarter since the product was not yet introduced
• E-Billing destinations on the network totaled 249, compared to zero in the year ago quarter since the e-billing product was not yet introduced
• Total suppliers transacting on the network increased 34% to 7,817, compared to 5,849 in the year-ago quarter
• Supplier initiated transactions increased 21% to 998,814, compared to 823,440 in the year-ago quarter
• Total transactions increased 15% to 3,231,611, compared to 2,821,534 in the year-ago quarter

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 third quarter ended April 30, 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: Monday, June 16, 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 June 23, 2014.

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

Toll replay number: 1-905-694-9451

Replay ID: 3174225

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 Statements of Financial Position
(Prepared in Canadian dollars)
(unaudited)
		April 30				July 31
		2014				2013
Assets
Current assets
	Cash	$	10,669,125			$	5,179,066
	Accounts receivable		842,450				651,782
	Prepaid expenses and deposits		210,087				167,870
	Investments		60,000				50,000
			11,781,662				6,048,718
Property and equipment			382,309				476,735
Intangible assets			4,273,296				4,275,120
		$	16,437,267			$	10,800,573
Liabilities
Current liabilities
	Accounts payable and accrued liabilities	$	1,881,485			$	1,404,716
	Current portion of deferred revenue		151,098				539,853
			2,032,583				1,944,569
Deferred revenue			-				4,500
			2,032,583				1,949,069
Shareholders' Equity
Share capital			56,782,560				47,713,288
Accumulated other comprehensive income			141,745				-
Warrants			980,941				980,941
Contributed surplus			7,369,013				6,492,495
Deficit			(50,869,575	)			(46,335,220	)
			14,404,684				8,851,504
		$	16,437,267			$	10,800,573

Approved by the Board:

Art Smith, Director

Randy Henderson, Director

Cortex Business Solutions Inc.
Condensed Consolidated Statements of Loss and Comprehensive Loss
For the three months and nine months ended April 30, 2014 and 2013
(Prepared in Canadian dollars)
(unaudited)
		Three months ended April 30								Nine months ended April 30
		2014				2013				2014				2013
Revenue
	Access and usage fees	$	2,070,174			$	1,439,219			$	5,555,292			$	3,995,390
	Integration fees		213,490				84,578				423,029				216,754
	Set-up fees		18,304				110,672				92,723				328,060
	Project management		88,684				-				94,259				-
			2,390,652				1,634,469				6,165,303				4,540,204
Expenses
	Salaries, employee benefits and subcontract		2,810,515				2,330,878				7,169,016				6,723,077
	General and administrative		397,956				260,881				999,652				725,224
	Commissions, rebates and credit card charges		222,275				150,934				606,251				510,104
	Rent		127,492				96,192				338,590				256,399
	Professional fees		107,738				50,989				347,352				148,915
	Internet and hosting costs		31,856				27,943				82,299				81,485
	Market expansion and product development		-				218,226				-				777,106
	Stock-based compensation		122,918				153,894				423,023				388,355
	Amortization		305,131				161,716				766,163				499,137
			4,125,881				3,451,653				10,732,346				10,109,802
Loss before the following			(1,735,229	)			(1,817,184	)			(4,567,043	)			(5,569,598	)
Finance income			18,610				8,122				32,688				27,607
Net loss		$	(1,716,619	)		$	(1,809,062	)		$	(4,534,355	)		$	(5,541,991	)
Other comprehensive earnings
	Items that may be reclassified subsequently to net income (loss):
	Foreign exchange gain (loss) on foreign operations		40,365				-				141,745				-
Comprehensive loss		$	(1,676,254	)		$	(1,809,062	)		$	(4,392,610	)		$	(5,541,991	)
Net loss per share-basic and diluted		$	(0.01	)		$	(0.01	)		$	(0.01	)		$	(0.02	)

Cortex Business Solutions Inc.
Condensed Consolidated Statements 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	-			-			-				-			-				-			(5,541,991	)			(5,541,991	)
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
Issuance costs	-			(892,061	)		-				(164,305	)		261,797				-			-				(794,569	)
Stockckcbased compensation	-			-			-				-			388,355				-			-				388,355
Expiration of Compensation units and warrants	-			-			(8,333,500	)			(653,969	)		653,969				-			-				-
Prospectus offering for cash	38,920,000			6,168,820			22,379,000				1,148,140			-				-			-				7,316,960
Balance, April 30, 2013	259,147,375			47,732,574			23,852,063				1,083,068			6,301,537				-			(44,730,520	)			10,386,659
Balance July 31, 2013	259,147,375			47,713,288			22,379,000				980,941			6,492,495				-			(46,335,220	)			8,851,504
Net loss	-			-			-				-			-				-			(4,534,355	)			(4,534,355	)
Foreign exchange translation of foreign operations																		141,745							141,745
Prospectus offering for cash	100,000,000			10,000,000			-				-			-				-			-				10,000,000
Compensation units issued in conjunction with prospectus	-			(462,000	)		-				-			462,000				-			-				-
Options exercised for cash	65,852			13,480			-				-			-				-			-				13,480
Transferred on exercise of options	-			8,505			-				-			(8,505	)			-			-				-
Issued in lieu of salaries and bonus	2,484,200			397,472																					397,472
Issuance costs	-			(888,185	)		-				-			-				-			-				(888,185	)
Stockcbased compensation	-			-			-				-			423,023				-			-				423,023
Balance April 30, 2014	359,213,227		$	56,782,560			22,379,000			$	980,941		$	7,369,013			$	141,745		$	(50,869,575	)		$	14,404,684

Cortex Business Solutions Inc.
Condensed Consolidated Statements of Cash Flows
For the three months and nine months ended April 30, 2014 and 2013
(Prepared in Canadian dollars)
(unaudited)
			Three months ended April 30								Nine months ended April 30
			2014				2013				2014				2013
Cash provided by (used in)
Operating activities
	Net loss		$	(1,716,619	)		$	(1,809,062	)		$	(4,534,355	)		$	(5,541,991	)
	Items not affecting cash
		Stock-based compensation		122,918				153,894				423,023				388,355
		Amortization		305,131				161,716				766,163				499,137
		Salaries paid in shares (note 7(b))		-				3,928				16,000				(74,314	)
				(1,288,570	)			(1,489,524	)			(3,329,169	)			(4,728,813	)
	Changes in non-cash working capital			428,114				333,940				259,160				(15,930	)
Net cash used in operating activities				(860,456	)			(1,155,584	)			(3,070,009	)			(4,744,743	)
Financing activities
	Proceeds from issuance of shares			10,000,000				6,528,917				10,000,000				6,551,141
	Proceeds from exercise of stock options, net of costs			-				-				13,480				-
	Share issuance costs			(882,148	)			-				(888,185	)			-
Net cash from (used in) financing activities				9,117,852				6,528,917				9,125,295				6,551,141
Investing activities
	Acquisition of property and equipment			(1,641	)			(7,200	)			(6,966	)			(105,367	)
	Intangible asset costs			(85,215	)			(411,267	)			(662,947	)			(1,213,817	)
Net cash used in investing activities				(86,856	)			(418,467	)			(669,913	)			(1,319,184	)
Effect of exchange rate changes on cash and cash equivalents held in foreign currency				(27,041	)			-				104,686				-
Cash inflow (outflow)				8,143,499				4,954,866				5,490,059				487,214
Cash, beginning of period				2,525,626				2,283,318				5,179,066				6,750,970
Cash, end of period			$	10,669,125			$	7,238,184			$	10,669,125			$	7,238,184
Non-cash transactions:
	Issuance of shares in lieu of salaries and bonuses including prior period amounts accrued (note 7(b))		$	-			$	28,000			$	16,000			$	536,247

See accompanying notes

Investor Relations Contacts:Liolios Group, Inc.Cody Slach or Greg Falesnik1-949-574-3860CBX@Liolios.comBrisco Capital PartnersScott Koyich1-403-215-5979skoyich@briscocapital.com