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Cortex Announces April 30, 2013 Quarterly Financial Results

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CALGARY, ALBERTA -- (Marketwired) -- 06/26/13 -- Cortex Business Solutions Inc. (TSX VENTURE: CBX) ("Cortex" or the "Company") is pleased to announce the Company's Q3 F2013 Financial and Operational Highlights. Complete financials and MD&A are available on SEDAR (www.sedar.com).

Revenue was $1.6M in the third quarter of the Fiscal Year 2013, compared to $1.4M in the same quarter Fiscal Year 2012, reflecting a 20% growth in total revenue. Q3 F2013 total revenue grew 9% over Q2 F2013. Included in the total revenue is access and usage fee revenue of $1.4M Q3 F2013 compared to $1.1M in Q3 F2012 and $1.3M in Q2 F2013 representing a 30% and 9% respective, increase in recurring revenue growth.

The Company reduced its net cash used in operating activities to $1,093,929 in Q3 F2013 from $2,103,861 in Q3 F2012; an improvement of 48%. There was a 39% reduction in net cash used in operating activities Q3 F2013 compared to Q2 F2013 of $1,807,182.

At the end of the quarter ended April 30, 2013 ("Q3 F2013"), Cortex had signed agreements with 69 Hubs, 5 more than at the end of January 31, 2013 ("Q2 F2013"). Of those, 51 have progressed through the pilot phase and 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 an additional destination for existing network users to send invoices to. During the quarter, Cortex added 367 new customers.

Cortex had a net loss of $1,809,062 or $(0.01) per basic and diluted share in Q3 F2013, compared to net loss of $2,374,772 or $(0.01) per basic and diluted share in Q3 F2012. This reduction in net loss of 24% is the result of increased revenue in conjunction with a reduction of expenditures of 8% compared to Q3 2012.

"Cortex continues to grow our Network of companies, transactions and revenue during a time period when drilling activity in the oil and gas industry is down considerably from last year. This is a direct result of our investments in market expansion, productivity improvements and technology over the past year," said Art Smith, President & CEO of Cortex. "We expect 2013 to close with strong growth for the Company in terms of both revenue and productivity improvements, as we expand our Network in Canada and the United States."

Outlook

Cortex is seeing increasing demand for our new 100% e-Billing service with the signing of a large initiative in February 2013. This initiative will expand the Cortex network into 5 new industries including Mining, Construction, Power Systems, Agriculture and Forestry and has the potential to add thousands of new Hubs to the Cortex network. We have seen additional demand for this service and expect more projects to be signed over the next 6 months.

Cortex expects to launch its new Portal product in the summer of 2013, which will include a collaboration environment enabling customers to create profiles, perform searches, send messages and connect with each other through the Cortex Network. The Roadmap project was the foundation required to proceed with the development of the Portal product.

Cortex will continue to expand the Network by adding Hubs and their supplier groups through current and new partnerships. Cortex will explore new revenue, industry and partnership opportunities in Canada and the U.S.

Cortex is three quarters through fiscal 2013 with 69 Hubs signed to the Network, 51 Hubs active on the Network and 9,147 contracted suppliers. F2013 continues the momentum with a focus on strong relationships with clients and partners which are expected to provide continued month over month revenue growth through increasing transaction volumes between our Hub customers and their suppliers.

Organic network growth, both in the number of customers connected and the number of transactions they do, has provided a solid revenue foundation for the Company. Management expects to see continued Hub signings in 2013 and is projecting to exit fiscal year ended July 31, 2013 with over 80 Hub customers.

Strategic partnerships with Full Circle, Powervision, Pandell, Basware, Verian Technologies, IT Canada and Concerta are providing numerous opportunities to add Hubs in both Canada and the U.S.

Cortex continues to expand partnerships adding Microsoft, Etelligent, Coupa Software and Perfect Commerce this year.

Over the next year, management expects to complete more partnerships, launch new features to the Network and continue increasing recurring revenue.

The TSX Venture Exchange approved the previously disclosed applied for issuance of 200,000 common shares at a deemed price of $0.19. These shares were issued on April 23, 2013.

Quarterly Results Conference Call

On June 26th, 2013 at 2:00 pm MST, please join the live conference:

Toll-Free Dial-In Number: (866) 223-7781

Local Dial-In #: (416) 340-8018

Time: 2:00 pm MST

A replay of the conference call will be available two hours after the call's completion and will expire by 11:59 pm EST on July 3rd, 2013. You may listen to the recording by calling toll-free (800) 408-3053 or (905) 694-9451. The password for the replay is 4507076.

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 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.Condensed Interim Consolidated Statements of Financial Position(Prepared in Canadian dollars)(unaudited) April 30 July 31 2013 2012AssetsCurrent assets Cash $ 7,238,184 $ 6,750,970 Accounts receivable 779,754 847,847 Prepaids and deposits 178,033 168,160 ------------------------- 8,195,971 7,766,977Property and equipment 562,027 611,082Intangible asset 3,839,347 2,970,245 ------------------------- $ 12,597,345 $ 11,348,304 ------------------------- -------------------------LiabilitiesCurrent liabilitiesAccounts payable and accrued liabilities $ 1,506,910 $ 1,842,431Current portion of deferred revenue 634,776 710,598 ------------------------- 2,141,686 2,553,029Deferred revenue 69,000 342,368 ------------------------- 2,210,686 2,895,397 -------------------------Shareholders' EquityShare capital 47,732,574 41,858,963Warrants 1,083,068 753,202Contributed surplus 6,301,537 5,029,271Deficit (44,730,520) (39,188,529) ------------------------- 10,386,659 8,452,907 ------------------------- $ 12,597,345 $ 11,348,304 ------------------------- -------------------------Approved by the Board:(Signed) "Art Smith", Director(Signed) "Doug Lailey", DirectorCortex Business Solutions Inc.Condensed Interim Consolidated Statements of Loss and Comprehensive LossFor the three months and nine months ended April 30, 2013 and 2012(Prepared in Canadian dollars)(unaudited) Three months ended April 30 Nine months ended April 30 2013 2012 2013 2012Revenue Access and usage fees $ 1,439,219 $ 1,104,353 $ 3,995,390 $ 2,965,931 Integration fees 84,578 171,893 216,754 492,085 Set-up fees 110,672 87,438 328,060 193,917 ------------------------------------------------------ 1,634,469 1,363,684 4,540,204 3,651,933 ------------------------------------------------------Expenses Commissions, rebates and credit card charges 150,934 129,578 510,104 324,186 General and administrative 260,881 268,560 725,224 809,813 Internet and hosting costs 27,943 28,942 81,485 97,178 Market expansion and product development 218,226 550,058 777,106 1,746,618 Professional fees 50,989 40,763 148,915 135,669 Rent 96,192 77,734 256,399 236,960 Salaries, employee benefits and subcontract 2,330,878 2,357,842 6,723,077 6,499,680 Stock-based compensation 153,894 109,795 388,355 412,445 Amortization 161,716 179,909 499,137 423,725 ------------------------------------------------------ 3,451,653 3,743,181 10,109,802 10,686,274 ------------------------------------------------------Loss before the following (1,817,184) (2,379,497) (5,569,598) (7,034,341)Finance income 8,122 4,725 27,607 30,950 ------------------------------------------------------Net loss and comprehensive loss $ (1,809,062) $ (2,374,772) $ (5,541,991) $ (7,003,391) ------------------------------------------------------ ------------------------------------------------------Net loss per share- basic and diluted $ (0.01) $ (0.01) $ (0.02) $ (0.04) ------------------------------------------------------ ------------------------------------------------------Cortex Business Solutions Inc.Condensed Interim Consolidated Statements of Changes in Shareholders'Equity(Prepared in Canadian dollars)(unaudited) Number Common of shares Number Warrants Common stated of stated shares value Warrants valueBalance - July 31, 2011 177,222,248 $ 33,851,308 10,995,063 $ 1,135,282Net loss - - - -Compensation Options exercised for cash 423,000 67,680 - -Transferred on exercise ofCompensation Options - 79,626 - -Warrants issued on exercise ofCompensation Options for cash - - 211,500 16,920Issued in lieu of salaries and bonus 2,844,819 635,604 - -Issuance costs - (8,916) - -Options exercised for cash 2,011,742 322,240 - -Transferred on exercise of options - 242,842 - -Stock-based compensation - - - -Warrants expired - - (1,400,000) (399,000) --------------------------------------------------------Balance, April 30, 2012 182,501,809 35,190,384 9,806,563 753,202Net loss - - - -Prospectus offering for cash 31,492,665 6,298,533 - -Options exercised for cash 3,016,667 603,333 - -Transferred on exercise of options - 501,370 - -Issued in lieu of salaries and bonus 250,000 50,000 - -Stock-based compensation - - - -Issuance costs - (784,657) - - --------------------------------------------------------Balance - July 31, 2012 217,261,141 41,858,963 9,806,563 753,202Net loss - - - -Expiration of Compensation units and warrants - - (8,333,500) (653,969)Options exercised for cash 191,667 28,750 - -Transferred on exercise of options - 31,855 - -Issued in lieu of salaries and bonus 2,774,567 536,247 - -Stock-based compensation - - - -Prospectus offering for cash 38,920,000 6,168,820 22,379,000 1,148,140Issuance costs - (892,061) - (164,305) --------------------------------------------------------Balance - April 30, 2013 259,147,375 $ 47,732,574 23,852,063 $ 1,083,068 -------------------------------------------------------- -------------------------------------------------------- Total Contri- share- buted holders' surplus Deficit equityBalance - July 31, 2011 $ 4,825,444 $(29,884,939) $ 9,927,095Net loss - (7,003,391) (7,003,391)Compensation Options exercised for cash - - 67,680Transferred on exercise ofCompensation Options (79,626) - -Warrants issued on exercise ofCompensation Options for cash - - 16,920Issued in lieu of salaries and bonus - - 635,604Issuance costs - - (8,916)Options exercised for cash - - 322,240Transferred on exercise of options (242,842) - -Stock-based compensation 412,445 - 412,445Warrants expired 399,000 - - -----------------------------------------Balance, April 30, 2012 5,314,421 (36,888,330) 4,369,677Net loss - (2,300,199) (2,300,199)Prospectus offering for cash - - 6,298,533Options exercised for cash - - 603,333Transferred on exercise of options (501,370) - -Issued in lieu of salaries and bonus - - 50,000Stock-based compensation 83,951 - 83,951Issuance costs 132,269 - (652,388) -----------------------------------------Balance - July 31, 2012 5,029,271 (39,188,529) 8,452,907Net loss - (5,541,991) (5,541,991)Expiration of Compensation units and warrants 653,969 - -Options exercised for cash - - 28,750Transferred on exercise of options (31,855) - -Issued in lieu of salaries and bonus - - 536,247Stock-based compensation 388,355 - 388,355Prospectus offering for cash - - 7,316,960Issuance costs 261,797 - (794,569) -----------------------------------------Balance - April 30, 2013 $ 6,301,537 $(44,730,520) $ 10,386,659 ----------------------------------------- -----------------------------------------Cortex Business Solutions Inc.Condensed Interim Consolidated Statements of Cash FlowsFor the three months and nine months ended April 30, 2013 and 2012(Prepared in Canadian dollars)(unaudited) Three months ended April 30 Nine months ended April 30 2013 2012 2013 2012Cash provided by (used in)Operating activitiesNet loss $ (1,809,062) $ (2,374,772) $ (5,541,991) $ (7,003,391)Items not affecting cash Stock-based compensation 153,894 109,795 388,355 412,445 Amortization 161,716 179,909 499,137 423,725 Adjustment to salaries expense for salaries paid in shares 3,928 - (74,314) 14,250 ------------------------------------------------------ (1,489,524) (2,085,068) (4,728,813) (6,152,971) Changes in non- cash working capital 395,595 (18,793) 160,067 102,605 ------------------------------------------------------Net cash used in operating activities (1,093,929) (2,103,861) (4,568,746) (6,050,366) ------------------------------------------------------Financing activity Proceeds from issuance of shares and warrants, net of costs 6,528,917 401,357 6,551,141 397,924 ------------------------------------------------------Net cash from financing activities 6,528,917 401,357 6,551,141 397,924 ------------------------------------------------------Investing activities Acquisition of property and equipment (7,200) (4,884) (105,367) (123,407) Software development costs (411,267) (347,333) (1,213,817) (1,104,057) Changes in non- cash working capital (61,655) (12,381) (175,997) (129,527) ------------------------------------------------------Net cash used in investing activities (480,122) (364,598) (1,495,181) (1,356,991) ------------------------------------------------------Cash inflow (outflow) 4,954,866 (2,067,102) 487,214 (7,009,433)Cash, beginning of period 2,283,318 4,752,879 6,750,970 9,695,210 ------------------------------------------------------Cash, end of period $ 7,238,184 $ 2,685,777 $ 7,238,184 $ 2,685,777 ------------------------------------------------------ ------------------------------------------------------Non-cash transactions: Issuance of shares in lieu of salaries and bonuses including prior period amounts accrued $ 28,000 $ - $ 536,247 $ 635,604 ------------------------------------------------------ ------------------------------------------------------





Contacts:
Brisco Capital Partners
Scott Koyich
(403) 215-5979
skoyich@briscocapital.com



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