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DIGITAL TRANSFORMATION SOLUTIONS
Corporate Presentation Q1 F2019
TSXV: CBX
TSXV: CBX
DISCLAIMERThis presentation is not, and nothing in it should be construed as, an offer, invitation or recommendation in respect of Cortex Business Solution’s securities, or an offer, invitation or recommendation to sell, or a solicitation of an offer to buy, the facilities or any of the Company’s securities in any jurisdiction. Neither this presentation nor anything in it shall form the basis of any contract or commitment. This presentation is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any investor. All investors should consider such factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate. The Company has prepared this presentation based on information available to it, including information derived from public sources that have not been independently verified. No representation or warranty, express or implied, is provided in relation to the fairness, accuracy, correctness, completeness or reliability of the information, opinions or conclusions expressed herein. These projections should not be considered a representation of the Company’s potential cash generation performance in any way.
The financial information included in this presentation is preliminary, forward-looking, unaudited and subject to revision. All forward–looking statements attributable to the Company or persons acting on its behalf apply only as of the date of this document, and are expressly qualified in their entirety by the cautionary statements included elsewhere in this document. The financial projections are preliminary and subject to change; the Company undertakes no obligation to update or revise these forward–looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Inevitably, some assumptions will not materialize, and unanticipated events and circumstances may affect the ultimate financial results. Projections are inherently subject to substantial and numerous uncertainties and to a wide variety of significant business, economic and competitive risks, and the assumptions underlying the projections may be inaccurate in any material respect. Therefore, the actual results achieved may vary significantly from the forecasts, and the variations may be material.
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TSXV: CBX
CORTEX INTRODUCTION
Cortex is a service-centric, digital transformation solutions provider that is revolutionizing B2B document exchange.
We save businesses valuable time and money by replacing traditional paper-based manual systems with AP and AR invoice automation.
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TSXV: CBX
CORTEX MARKET PRESENCE
11,000+
12M+
21B+
97%
RegisteredOrganizations
TransactionsProcessed Annually
Annual TransactionValue Processed
Customer SatisfactionRating*
4
60%CANADA
40%USA
*as at Oct 31, 2018
APPX.
APPX.
TSXV: CBX
CURRENT LANDSCAPE
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Paper and email invoices are the most
commonly received invoice types
Most organization manually enter invoice
data into their accounting systems
2018 Payables Insight Report, 2018, PayStream Advisors
Invoices received via paper
Invoices received via email
Invoices received via EDI/XML
Invoices received via
web upload/supplier portal
36%
34%
15%
15%
INVOICE RECEIPT METHODS
Invoices received via paper
Invoices received via email
Invoices received via EDI/XML
Invoices received via
web upload/supplier portal
54%
34%
9%
3%
INVOICE ENTRY METHODS
TSXV: CBX
KEY DRIVERS OF ADOPTION
With such an abundant amount of invoices to be processed, companies are always looking for ways to improve accounts payable (AP) and accounts receivable (AR) functions.
Electronic and automated invoice processes can result in possible savings of 60 – 80% compared to traditional paper-based processing.
PI Financial (Ardent Partners)
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TSXV: CBX
BENEFITS OF AP AUTOMATION
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Reduction in paper invoice volume
Quicker approval of invoices
Improved visibility into unpaid invoices/liabilities
Increased employee productivity
Lover overall AP processing costs
Reduction in late payment penalties and interest
Better compliance with regulatory requirements (SOX, FASB)
Improved supplier relationships
Reduction in fully loaded cost per invoice
66%
62%
40%
35%
30%
17%
10%
9%
8%
2018 Payables Insight Report, 2018, PayStream Advisors
TSXV: CBX
THE CORTEX ADVANTAGE
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ALIGNS WITHEXISTINGSYSTEMS
CUSTOMDATA
CONFIGURATIONS
FLEXIBLECONNECTION
METHODS
INDUSTRYAGNOSTIC
TECHNOLOGY
ONBOARDINGAND CUSTOMER
SUPPORT
97% Customer SatisfactionRating*
*as at Oct 31, 2018
TSXV: CBX
MARKET STRATEGY
Primary AP and AR Automation Focus
IndustryAgnostic
Scales WithBusiness Changes
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TSXV: CBX
GROWTH STRATEGY
Increase VolumeWithin Current Base
Add New Oil & GasCustomers
Capitalize On NewIndustry Growth
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TSXV: CBX
RECURRING REVENUE MODEL
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RecurringRevenue
= Improved
Predictability
Recurring monthly access plans
Buyer & supplier shared costs
TSXV: CBX
FINANCIAL MODEL
RevenueAccess & Usage Fees Integration & Set-up Fees Project Management Consolidated Revenue
Consolidated Cost of Sales Gross Profit Gross Profit Margin
ExpensesSales & Marketing Research & Development General & Admin Severance & Termination BenefitsTotal Consolidated Expenses
Finance Income
Income Tax expense – currentIncome Tax (recovery) - deferred
Net income Adjusted EBITDA
Q1 2019$3,261,753
$30,111$43,668
$3,335,532
$925,357$2,410,175
72%
$663,631$529,640$940,807
-$2,134,078
$21,873
$2,379($814,629)
$1,110,220$649,035
Q1 2018$2,809,912
$86,561$338,200
$3,234,673
$832,300$2,402,373
74%
$689,969$477,587$797,419$155,922
$2,120,897
$7,096
$2,108-
$286,464$504,813
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F2018$11,562,518
$240,227$651,036
$12,453,780
$3,287,242$9,166,538
74%
$2,248,966$1,900,089$3,276,424
$184,910$7,610,389
$80,921
$(2,749,236)-
$4,359,902$2,191,648
TSXV: CBX
FAST FACTS - Q1 F2019
MARKET CAPITALIZATION$32.0M
ENTERPRISE VALUE$30.3M
TOTAL REVENUE $3.3M
EPS$0.12
INSIDER OWNERSHIP1.77%
CASH + Short Term Investments*
$4.1M
TOTAL ASSETS*
$16.8M
TOTAL DEBT*
$2.3M
TOTAL LIABILITIES*
$4.8M
STOCK PRICE (Oct 31, 2018)
$3.50
52 WEEK LOW/HIGH
$3.50/$4.45
AVG. DAILY VOL. (3 mo.)
10,632
SHARES OUTSTANDING
9.14M
*As at Oct 31, 2018
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TSXV: CBX
FINANCIALS - Q1 F2019
ACTIVE SUPPLIERS VS. ACCESS FEES BILLABLE TRANSACTIONS VS. USAGE FEES
14
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 -
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019
TSXV: CBX
FINANCIALS - Q1 F2019
REVENUE CASH FLOW FROM OPERATIONS
15
$2,722
$2,931 $2,938
$3,235
$3,019$3,113 $3,087
$3,336
$1,500
$2,000
$2,500
$3,000
$3,500
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019
Rev
enu
e (C
$ 0
00
s)
($108.8)
$241.5
$510.7
$313.9
$141.5
$843.0
$674.0
$477.6
($500)
($300)
($100)
$100
$300
$500
$700
$900
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019
Cas
h F
low
from
Op
erat
ion
s (C
$ 0
00
s)
TSXV: CBX
FINANCIALS - Q1 F2019
ADJUSTED EBITDA
16
$165,410 $170,731 $182,324
$504,813
$614,910 $622,732
$431,158
$649,036
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019
TSXV: CBX
9,137,700
550,328
9,688,028
Total Cortex Shares Issued & Outstanding
Options, Warrants & Other Issuance Obligations
Fully Diluted
Cortex Market Cap
*based on $3.50 as at Oct 31, 2018
CAP TABLE
17
$31,981,950
TSXV: CBX
MANAGEMENT TEAMJoel Leetzow | CEOJoel’s tenacity and drive fuel his relentless passion for empowering a brilliant idea, taking it to market, and seeing industries and businesses change as a result. He came onboard in 2015 to lead the company’s continued growth as an international e-invoicing player, bringing with him more than 25 years of leadership experience within technology companies in both Canada and the United States.
Jason Baird | VP Finance & CFOJason has held multiple senior financial management positions within the oil & gas sector, as well as senioraccounting roles for EY (formerly Ernst & Young). Jason was awarded his Chartered Professional Accountant(CPA, CA) designation in 2001, and holds a Bachelor of Commerce (with distinction) from the Haskayne School of Business in Calgary, bringing over 20 years of finance experience to Cortex.
Andrew Stewart | VP, Customer ExperienceAs the Vice President, Customer Experience Andrew is responsible for the design & delivery of the overallcustomer experience for companies that are on the Cortex Network. As part of the senior leadership group,Andrew is relied upon to guide the teams that support the onboarding and ongoing support of all of Cortex’scustomers, as well as innovating processes & systems necessary to both increase revenue and improve theoverall customer experience with Cortex.
Chris Lambert | VP, TechnologyChris leads and guides the evolution of our world-class product suite. Chris has extensive experience in software and application development, people and project management, and a passion for finding intelligent and efficient solutions to complex challenges.
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BOARD OF DIRECTORS
Grant Billing | Chairman
Joel Leetzow | CEO, President & Director
Andrew Gutman | Director
Mark Ripplinger | Director
Randy Henderson | Director
Alice Reimer | Director
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ANALYST COVERAGE
David Kwan, CFA | PI Financial Corp.P: 604.718.7528
Pardeep S. Sangha | Haywood Securities Inc.P: 604.697.6142
Gabriel Leung | Beacon Securities LimitedP: 416.507.3963
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TSXV: CBX
CONTACT
Joel Leetzow | CEOP: 403.219.1503C: 587.582.3971
Jason Baird | VP Finance & CFOP: 587.320.135C: 403.390.1959
Andrew Stewart | VP, Customer ExperienceP: 403.219.1532C: 403.519.3982
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