corporate presentation q2 2017cortex.net/assets/corporate/170314-corpoverview-q22017.pdf ·...

Simple, Scalable E-invoicing Solutions.

Corporate Presentation Q2 2017

TSXV: CBX

This presentation is not, and nothing in it should be construed as,

an offer, invitation or recommendation in respect of Cortex Busi-

ness Solution’s securities, or an offer, invitation or recommenda-

tion to sell, or a solicitation of an offer to buy, the facilities or any of

the Company’s securities in any jurisdiction. Neither this presenta-

tion 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 consulta-

tion 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, correct-

ness, 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.

DISCLAIMERThe 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 assump-

tions 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.

2

CURRENT LANDSCAPE

7419.10

3.12

26.329

21.4

of companies still receive & manually process paper invoices *

is the cost to process a single invoice using a manual process *

of companies duplicate or overpay invoices on a regular basis *

of companies do not pay on time & lose out on possible discounts *

of invoices contain incorrect information, costing up to 8x more to process **

of invoices are sent to the wrong receiver (internally) **

* Epayables 2013: AP’s New Dawn. Ardent Partners Ltd.; ** E-invoicing Entering a New Era 2015, Billentis

%

$

3

%

%

%

%

Of the 500 billion bills/invoices globally, 42 billion are estimated to be exchanged paperless in 2015 (North America 7B).

This means approximately 91%of the market has yet to adopte-invoicing.

OPPORTUNITY

91%

4

E-invoicing / E-Billing 2015, Billentis

Source: Billentis, 2015

LEADERS

AVERAGE

DEVELOPING

LAGGARDS

OPPORTUNITY

5

KEY DRIVERS OF ADOPTION

PI Financial (Ardent Partners)

With such an abundant amount of invoices to be processed, companies are always looking for ways to improve A/P and A/R functions.

Electronic and automated invoice processes can result in savings of 60 – 80% compared to traditional paper-based processing.

6

KEY DRIVERS OF ADOPTION

Reduction in processing costs

Fewer lost or missing invoices

Quicker approval cycles

Better visibility across the transaction lifecycle

Increased ability to capture discounts

Increased on time payments

Reduction in exceptions/ discrepancies

Fewer duplicate invoices

Improved vendor satisfaction

Fewer supplier inquiries

54%

31%30%

25%

24%

23%

17%

10%

9%

5%Invoice Receipt Management Report, 2015, PayStream Advisors

7

INDUSTRY BARRIERS TO ADOPTIONIntegration with in-house

& Supplier systems

Gaining Supplier adoption

Internal change management /lack of executive sponsorship

Solution does notfunction as expected

47%

42%

37%

1 1%

Invoice Receipt Management Report, 2015, PayStream Advisors

8

9

Flexible ConnectionMethods

Trading Partner Network

Workflow & ERP Agnostic

THE CORTEXADVANTAGE

TECHNOLOGY

10

Value AddedServices

Ongoing Training &Support

SupplierOnboarding

THE CORTEXADVANTAGE

PEOPLE

11

Scalable for any sized business

IndustryAgnostic

Primarye-InvoicingFocus

MARKETSTRATEGY

USA

CORTEX MARKET PRESENCE

CANADA57%11,000+ Registered

Organizations

10M+

Annual TransactionValue Processed10B+

96%

43%

12

TransactionsProcessed Annually

Customer SatisfactionRating

13

Capitalize on New Industry Growth

Increase VolumeWithin Current Base

Add New Oil & Gas Customers

GROWTHSTRATEGY

14

$

$

Buyer & Supplier Shared Costs

Recurring Monthly Access Plans

RECURRINGREVENUEMODEL

FINANCIAL MODELRevenue Access & 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 Benefits Total Consolidated Expenses

Loss Before Finance Finance Income (Expense)

Tax

Net income (loss)

15

2016$9,376,298

$404,062$43,158

$9,823,518

$5,462,248$4,361,270

44%

$1,429,838$1,990,361$3,412,059

$213,445$7,045,703

($2,684,433)($7,249)

($2,691,682)

$12,987

($2,704,669)

2016 Q2$2,443,975

$110,729$3,869

$2,558,573

$1,397,136$1,161,437

45%

$324,954$489,545$858,327$105,626

$1,778,452

($617,015)($1,959)

($618,974)

$282

($619,256)

2017 Q2$2,398,153

$82,475$241,048

$2,721,676

$772,442$1,949,234

72%

$584,152$462,159

$1,014,480$70,233

$2,131,024

($181,790)$429

($181,361)

$15,024

($196,385)

FAST FACTS (Q2 FISCAL 2017)

16

STOCK PRICE (Jan 31, 2017)$3.20

52 WEEK LOW/HIGH$2.10/$3.28

AVG. DAILY VOL. (3 mo.)12,190

SHARES OUTSTANDING8.99M

OUTSTANDING WARRANTS0

MARKET CAPITALIZATION$28.8M

ENTERPRISE VALUE$23.3M

TOTAL REVENUE $2.72M

EPS$(0.02)

INSIDER OWNERSHIP %18%

CASH and Short Term Investments*$5.42M

TOTAL ASSETS*$6.97M

TOTAL DEBT*$0

TOTAL LIABILITIES*$1.35M

FINANCING$0

*As at Jan 31, 2017

Q2 FINANCIALS

17

SUPPLIERS VS. ACCESS & USAGE FEES TRANSACTIONS VS. ACCESS & USAGE FEES

7600

7800

8000

8200

8400

8600

8800

9000

9200

$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

Q2 F2015 Q3 F2015 Q4 F2015 Q1 F2016 Q2 F2016 Q3 F2016 Q4 F2016 Q1 F2017 Q2 F2017

Usage Fees Access Fees Active Suppliers

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000


Usage Fees Access Fees Billable Transactions

Q2 FINANCIALS

18

REVENUE CASH FLOW FROM OPERATIONS

$2,559

$2,403

$2,234

$2,469

$2,722

$1,500

$2,000

$2,500

$3,000

Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017

Rev

enue

(C$

000s

)

($400.3)

($205.5)

($432.4)

($126.2) ($108.8)

($500.0)

($400.0)

($300.0)

($200.0)

($100.0)

$0.0

$100.0

Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017

Cas

h Fl

ow fr

om O

pera

tions

(C$

000s

)

Q2 FINANCIALS

19

ACTIVE BUYERS / SUPPLIERS BILLABLE TRANSACTIONS VS.TOTAL DOCUMENTS

78 84 86 86 90 91 92 92 91

8.8 8.9 9.0 9.0 9.08.6

8.3 8.2 8.0

0.0

1.5

3.0

4.5

6.0

7.5

9.0

0

20

40

60

80

100


Act

ive

Su

pp

lie

rs (

00

0s)

Act

ive

Bu

yers

Active Buyers Active Suppliers Linear (Active Buyers)

1.41.2 1.2 1.2 1.1

1.0 0.91.0 1.2

3.9

3.43.1 3.1

2.9

2.52.3

2.72.9

0.0

1.0

2.0

3.0

4.0

0.0

0.5

1.0

1.5

2.0


Tota

l D

ocu

me

nts

Exc

ha

ng

ed

(M

Ms)

Bil

lab

le T

ran

sact

ion

s (M

Ms)

Billable Transactions Total Documents Exchanged

CAP TABLE

*based on $3.20 as at Jan 31, 2017

Total Cortex Shares Issued & Outstanding

Options, Warrants & Other Issuance Obligations

Fully Diluted

Cortex Market Cap 28,762,224

SHARES MARKET CAP

8,988,195

547,013

9,535,208

20

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 contin-ued 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.

Sandra Fawcett, CPA, CGA | CFOSandra has dedicated herself to providing the expertise and leadership needed to ensure foundational stability and forward momentum to financial teams. She holds a CPA, CGA designation, and has worked previously in public accounting firms as well as providing financial statement and tax consulting services.

Elena Dumitrascu | VP, Strategic PartnershipsElena has spent her career working with Fortune 500 companies in the Energy, Automotive and Manufac-turing sectors. Her experience in sales, enterprise business development, and consulting in supply chain, operations, and regulatory compliance led her to found Oil and Gas software company Caledonia Solutions.

John Gilkison | VP, Sales & Business DevelopmentJohn is passionate in market opportunity identification and managing our global sales efforts, with long term growth, profitability and customer centric outcomes as priorities. From previous roles at SAP, DrillingIn-fo, Oildex, and Ceridian. John is recognized as a leader and motivator with immense energy that consistently builds high performance teams.

21

2016$9,376,298

$404,062$43,158

$9,823,518

$5,462,248$4,361,270

44%

$1,429,838$1,990,361$3,412,059

$213,445$7,045,703

($2,684,433)($7,249)

($2,691,682)

$12,987

($2,704,669)

2016 Q2$2,443,975

$110,729$3,869

$2,558,573

$1,397,136$1,161,437

45%

$324,954$489,545$858,327$105,626

$1,778,452

($617,015)($1,959)

($618,974)

$282

($619,256)

2017 Q2$2,398,153

$82,475$241,048

$2,721,676

$772,442$1,949,234

72%

$584,152$462,159

$1,014,480$70,233

$2,131,024

($181,790)$429

($181,361)

$15,024

($196,385)

Darryl Gate | VP, Client ServicesDarryl manages the entire Cortex lifecycle from new client sign up, to solution implementation, project management, customer training, account and relationship provisioning, to ongoing care and support. He and his team are focused on streamlining processes and performance for operational efficiency.

Andrew Stewart | Director, Marketing & Investor RelationsAndrew is responsible for all activity related to Cortex’s position and reputation in the marketplace. He manages the Marketing and Product Management teams, ensuring a strong go-to-market strategy that strengthens the corporate brand and relationship with the investor community.

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.

22

MANAGEMENT TEAM

ANALYSTCOVERAGE

Hubert Mak, CPA, CA, CFA | Cormark SecuritiesP: 416.943.6727

E: [email protected]

David Kwan, CFA | PI Financial Corp.P: 604.718.7528


Pardeep S. Sangha | Haywood Securities Inc.P: 604.697.6142


24

CONTACTJoel Leetzow | CEOP: 403.219.1503 C: 587.582.3971

Andrew Stewart | Director, Marketing & Investor RelationsP: 403.219.1532 C: 403.519.3982

Sandra Fawcett, CPA, CGA | CFOP: 403.219.1500 C: 403.850.1850

25