Cortex Business Solutions Inc. CTPNF

RE:Fabrice

[TheRock07]

Fabrice is enamored with new management and with the growth prospects for the unique business model.

Two recent collaborative deals will only enhance his views as to the value inherent in this investment.
Lets look at the one year valuation metrics..

...Sequential quarterly growth of 10 %

.....massive gross margins of 52 % and increasing as sales grow

.....recurring revenues about 90 % of gross revenues

......$8.5 million in cash

.......cash burn rate reduced to just over $900,000 in the last reported quarter.

.......40 % of its sales in USD

......$3.1 million of its cash in USD.

Valuation

@ a sequential growth rate of 10 %, quarterly sales will grow to nearly $4 million by Q4/15 or about $16 million annualized.

Given its scorching growth rate and pristine balance sheet, 7 times annual sales seems appropriate.

This provides a fair value of about 30.5 cents, 33 cents when cash is included.

The $3.1 million USD in cash is now worth $3.9 million in CAD.

Along with a rapidly diminishing cash burn rate and extra cash provided by forex gains, cash burn rates will reach zero in about 2 quarters.

This leaves us with a pristine balance sheet with still over $7 million in cash.

These estimates of gross sales growth are probably conservative, given recent executive changes and collaboative arrangements.

So, upwards to 40 cents in fair value would not be unreasonable.

Plus the high rate of recurring sales puts a solid floor on sales levels.

At least thats my view