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Cortex Announces Fiscal 2012 Annual Financial Results

CALGARY, ALBERTA -- (Marketwire) -- 11/22/12 -- Cortex Business Solutions Inc. ("Cortex" or the "Company") (TSX VENTURE:CBX) is pleased to announce the Company's FY 2012 Financial and Operational Highlights. Complete financials and MD&A are available on Sedar (

Revenue was $4.9 million in the Fiscal Year of 2012, compared to $3.1 million in the Fiscal Year 2011, reflecting a 61% growth in total revenue and a 63% recurring revenue growth year over year.

At the end of the 2012 fiscal year, Cortex had signed agreements with 43 buying organizations ("Hubs"), 28 more than at the end of fiscal 2011. At the end of fiscal 2012, 21 of the 43 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. Cortex added 2,860 new customers and increased total transactions through the system 65%.

Cortex had a net loss of $9,303,590 or $0.05 per basic and diluted share, compared to net loss of $9,548,936 or $0.06 per basic and diluted share. This modest improvement in net loss year over year is the result of the Company's continued investment into US expansion, market development and the new technology platform. The expenditure in these areas has been declining over the last two quarters of fiscal 2012 and are expected to continue to decline for fiscal 2013.

"Cortex continues to grow our network of companies with excellent growth in 2012 specifically in the areas of new Hub signings and transaction growth," said Art Smith, President & CEO of Cortex. "Our revenue growth is accelerating with the network effect of our recurring revenue and we expect 2013 to be a significant year for the company as we expand our network in Canada and the United States."


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

Building on the strong Network growth in 2012, Cortex begins fiscal 2013 with 43 buying organizations signed to the Network, 21 Hubs active on the Network and 7,933 contracted suppliers. This is a strong improvement over where we started fiscal 2012 with 15 buying organizations and 5,073 suppliers. Our continued strong relationship with our clients will provide continued month over month revenue growth from increasing transaction volumes between our 43 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 projecting to exit fiscal year ended July 31, 2013 with over 100 Hub customers.

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

With the addition of multiple buying organizations to the Network, management expects the growth of access and usage fee revenue stream to accelerate. This growth was 63% Fiscal year 2012 over Fiscal year 2011.

In the coming year, Management expects to complete more partnerships, launch new features to the Network and continue increasing recurring revenue.

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 projecting to exit fiscal year ended July 31, 2013 with over 100 Hub customers.

The Company has applied to the TSX Venture Exchange for the issuance of 2,207,900 common shares in alignment with the Company's Employee Performance Management ("EPM") Program. The issuance of these shares was voted on at the Company's AGM on June 11, 2012. These shares were applied for at a deemed price of $0.225. Of this amount 366,500 are to be issued to insiders.

Annual Results Conference Call

To call in for the live conference call please contact:

Toll-Free Dial-In Number: (877) 440-9795

Local Dial-In #: (416) 340-9432 (Toronto)

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 November 29, 2012. You may listen to the recording by calling (905) 694-9451 or toll-free at 1-800-408-3053. The password for the replay is 6143140.

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

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 2012    July 31 2011 
  Cash                                        $   6,750,970   $   9,695,210 
  Accounts receivable                               847,847         514,877 
  Prepaids and deposits                             168,160         213,063 
                                              --------------  --------------
                                                  7,766,977      10,423,150 
Property and equipment                              611,082         744,565 
Intangible asset                                  2,970,245       1,833,019 
                                              --------------  --------------
                                              $  11,348,304   $  13,000,734 
                                              --------------  --------------
                                              --------------  --------------
Current liabilities                                                         
  Accounts payable and accrued liabilities    $   1,842,431   $   1,613,030 
  Current portion of deferred revenue               710,598         688,766 
                                              --------------  --------------
                                                  2,553,029       2,301,796 
Deferred revenue                                    342,368         771,843 
                                              --------------  --------------
                                                  2,895,397       3,073,639 
Shareholders' Equity                                                        
Share capital                                    41,858,963      33,851,308 
Warrants                                            753,202       1,135,282 
Contributed surplus                               5,029,271       4,825,444 
Deficit                                         (39,188,529)    (29,884,939)
                                              --------------  --------------
                                                  8,452,907       9,927,095 
                                              $  11,348,304   $  13,000,734 
                                              --------------  --------------
                                              --------------  --------------
Cortex Business Solutions Inc.                                              
Consolidated Statements of Loss and Comprehensive Loss                      
For the years ended July 31, 2012 and 2011                                  
(Prepared in Canadian dollars)                                              
                                                       2012            2011 
  Access and usage fee                        $   4,093,869   $   2,512,978 
  Integration fees                                  552,601               - 
  Set-up fees                                       290,847         399,527 
  Project management                                      -         150,000 
                                              --------------  --------------
                                                  4,937,317       3,062,505 
                                              --------------  --------------
  General and administrative                      1,356,068         734,477 
  Internet and hosting costs                        124,363          85,696 
  Market expansion and product development        2,273,850       1,875,279 
  Professional fees                                 181,896         163,642 
  Rent                                              322,493         317,849 
  Salaries, employee benefits and subcontract     8,922,904       8,032,615 
  Stock-based compensation                          496,396       1,233,010 
  Amortization                                      603,562         224,763 
                                              --------------  --------------
                                                 14,281,532      12,667,331 
                                              --------------  --------------
Loss before the following                        (9,344,215)     (9,604,826)
Finance income                                       40,625          55,890 
                                              --------------  --------------
Net loss and comprehensive loss               $  (9,303,590)  $  (9,548,936)
                                              --------------  --------------
                                              --------------  --------------
Net loss per share-basic and diluted          $       (0.05)  $       (0.06)
                                              --------------  --------------
                                              --------------  --------------
Cortex Business Solutions Inc.                                              
Consolidated Statements of Cash Flows                                       
For the years ended July 31, 2012 and 2011                                  
(Prepared in Canadian dollars)                                              
                                                       2012            2011 
Cash provided by (used in)                                                  
Operating activities                                                        
Net loss                                      $  (9,303,590)  $  (9,548,936)
Items not affecting cash                                                    
  Stock-based compensation                          496,396       1,233,010 
  Amortization                                      603,562         224,763 
  Salaries paid in shares                            10,687         133,711 
                                              --------------  --------------
                                                 (8,192,945)     (7,957,452)
  Changes in non-cash working capital               332,878        (265,966)
                                              --------------  --------------
Net cash used in operating activities            (7,860,067)     (8,223,418)
                                              --------------  --------------
Financing activity                                                          
  Proceeds from issuance of shares and                                      
   warrants, net of issue costs                   6,647,402       8,431,249 
                                              --------------  --------------
Net cash from financing activity                  6,647,402       8,431,249 
                                              --------------  --------------
Investing activities                                                        
  Acquisition of property and equipment            (125,364)       (406,498)
  Software development costs                     (1,481,941)     (1,833,019)
  Changes in non-cash working capital              (124,270)         84,012 
                                              --------------  --------------
Net cash used in investing activities            (1,731,575)     (2,155,505)
                                              --------------  --------------
Cash outflow                                     (2,944,240)     (1,947,674)
Cash, beginning of year                           9,695,210      11,642,884 
                                              --------------  --------------
Cash, end of year                             $   6,750,970   $   9,695,210 
                                              --------------  --------------
                                              --------------  --------------

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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