180306 CorpOverview Q22018 FINAL LowRes - Cortex · Title: 180306_CorpOverview_Q22018_FINAL_LowRes...
Transcript of 180306 CorpOverview Q22018 FINAL LowRes - Cortex · Title: 180306_CorpOverview_Q22018_FINAL_LowRes...
Simple, Scalable E-invoicing Solutions.
Corporate Presentation Q2 2018
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.
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CORTEX INTRODUCTION
Cortex transforms B2B invoicing from manual and time consuming to streamlined and automated, saving companies time and money.
Our unique shared value network model provides both the technology and support services to engage the entire business chain for maximum results.
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USA
CORTEX MARKET PRESENCE
CANADA60%11,000+ Registered
Organizations
12M+
Annual TransactionValue Processed18B+
96%
40%
4
TransactionsProcessed Annually
Customer SatisfactionRating
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) **
CORTEX MARKET PRESENCE
* Epayables 2013: AP’s New Dawn. Ardent Partners Ltd.; ** E-invoicing Entering a New Era 2015, Billentis
%
$
5
%
%
%
%
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%
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E-invoicing / E-Billing 2015, Billentis
Source: Billentis, 2017
LEADERS
AVERAGE
DEVELOPING
LAGGARDS
OPPORTUNITY
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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.
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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
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KEY DRIVERS OF ADOPTION 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
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Flexible ConnectionMethods
Trading Partner Network
Workflow & ERP Agnostic
THE CORTEXADVANTAGE
TECHNOLOGY
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Value AddedServices
Ongoing Training &Support
SupplierOnboarding
THE CORTEXADVANTAGE
PEOPLE
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Scalable for any sized business
IndustryAgnostic
Primarye-InvoicingFocus
MARKETSTRATEGY
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Capitalize on New Industry Growth
Increase VolumeWithin Current Base
Add New Oil & Gas Customers
GROWTHSTRATEGY
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$
$
Buyer & Supplier Shared Costs
Recurring Monthly Access Plans
RECURRINGREVENUEMODEL
FINANCIAL MODEL
Revenue Access & Usage Fees Integration & Set-up Fees Project Management Revenue
Cost of Sales Gross Profit Gross Profit Margin
ExpensesSales & Marketing Research & Development General & Administrative Severance & Termination BenefitsOnerous Contract Total Expenses
Finance Income
Tax Expense (Recovery)
Net Income (Loss)
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Q2 2018$2,853,893
$50,683$114,379
$3,018,955
$789,504$2,229,451
74%
$484,593$459,143$971,726
$2,762$0
$1,918,224
$13,065
$2,142
$322,150
F 2017$9,964,212
$268,579$826,501
$11,059,292
$3,217,622$7,841,670
71%
$2,382,665$1,869,596$3,676,862
$138,897$217,638
$8,285,658
$6,546
($22,128)
($415,314)
Q2 2017$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
$0$2,131,024
$429
$15,024
($196,385)
FAST FACTS (Q2 FISCAL 2018)
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STOCK PRICE (Jan 31, 2018)$4.10
52 WEEK LOW/HIGH$2.90/$4.40
AVG. DAILY VOL. (3 mo.)4,143
SHARES OUTSTANDING9.10M
OUTSTANDING WARRANTS0
MARKET CAPITALIZATION$37.3M
ENTERPRISE VALUE$30.6M
TOTAL REVENUE $3.0M
EPS$0.04
INSIDER OWNERSHIP %13.61%
CASH and Short Term Investments*$6.74M
TOTAL ASSETS*$8.56M
TOTAL DEBT*$0
TOTAL LIABILITIES*$1.81M
FINANCING$0
*As at Jan 31, 2018
Q2 FINANCIALS
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ACTIVE SUPPLIERS VS. ACCESS FEES BILLABLE TRANSACTIONS VS. USAGE FEES
Access Fees Active Suppliers Usage Fees Billable Transactions
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,800,000
$2,000,000
Q32015
Q4F2015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
Q32015
Q4F2015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Q2 FINANCIALS
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REVENUE CASH FLOW FROM OPERATIONS
($205.5)
($432.4)
($126.2) ($108.8)
$241.5
$510.7
$313.9
$141.5
($600)
($500)
($400)
($300)
($200)
($100)
$0
$100
$200
$300
$400
$500
$600
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Cash
Flo
w f
rom
Ope
ratio
ns (C
$ 00
0s)
$2,403
$2,234
$2,469
$2,722
$2,931 $2,938
$3,235
$3,019
$1,500
$2,000
$2,500
$3,000
$3,500
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Reve
nue
(C$
000s
)
Q2 FINANCIALS
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ADJUSTED EBITDA
-$63,546
-$137,517
$50,750
$165,410 $170,731 $182,324
$504,813
$614,910
-$150,000
-$50,000
$50,000
$150,000
$250,000
$350,000
$450,000
$550,000
$650,000
$750,000
Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018
Q2 FINANCIALS
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ACTIVE BUYERS / SUPPLIERS BILLABLE TRANSACTIONS VS.TOTAL DOCUMENTS
84 86 8690 91 92 92 91
96 96 97 97
8.9 9.0 9.0 9.08.6
8.3 8.2 8.08.3 8.4 8.6 8.5
0.0
1.5
3.0
4.5
6.0
7.5
9.0
60
80
100
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Acti
ve S
uppl
iers
(00
0s)
Acti
ve B
uyer
s
Active Buyers Active Suppliers Linear (Active Buyers)
1.2 1.2 1.2 1.11.0 0.9
1.01.2 1.2 1.3 1.3 1.3
3.4
3.1 3.12.9
2.52.3
2.72.9
3.1 3.13.3 3.2
0.0
1.0
2.0
3.0
4.0
0.0
0.5
1.0
1.5
2.0
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Tota
l Doc
umen
ts E
xcha
nged
(M
Ms)
Billa
ble
Tran
sacti
ons
(MM
s)Billable Transactions Total Documents Exchanged
CAP TABLE
*based on $4.10 as at Jan 31, 2018
Total Cortex Shares Issued & Outstanding
Options, Warrants & Other Issuance Obligations
Fully Diluted
Cortex Market Cap 37,289,299
SHARES MARKET CAP
9,097,146
628,025
9,725,171
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Q2 2017$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
$0$2,131,024
$429
$15,024
($196,385)
CAP TABLE
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MANAGEMENT TEAMJoel Leetzow | President & 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 senior accounting 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 overall customer 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’s customers, as well as innovating processes & systems necessary to both increase revenue and improve the overall 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.
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, DrillingInfo, Oildex, and Ceridian. John is recognized as a leader and motivator with immense energy that consistently builds high performance teams.
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MANAGEMENT TEAM
BOARD OFDIRECTORS
Grant Billing | Chairman
Joel Leetzow | President & CEO
Andrew Gutman | Director
Randy Henderson | Director
Mark Ripplinger | Director
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ANALYSTCOVERAGE
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
Cormark SecuritiesP: 403.266.4240
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CONTACTJoel Leetzow | CEOP: 403.219.1503 C: 587.582.3971
Jason Baird | VP Finance & CFOP: 587.320.1235 C: 403.390.1959
Andrew Stewart | VP, Customer ExperienceP: 403.219.1532 C: 403.519.3982
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CBX