ITEX Announces Results For Second Quarter 2008

ITEX Corporation (OTCBB:ITEX), a leading marketplace for cashless business transactions in North America, has filed its Form 10Q with the Securities and Exchange Commission and announced its results for its 2008 second quarter ended January 31, 2008.

�We are pleased to report a 14% increase in second quarter revenue over the same quarter last year. Increased revenue positively impacted net cash provided by operating activities which increased a remarkable 141% for our second quarter over the same quarter last year,� said Steven White, Chairman and CEO.

�The second quarter is historically strong due to holiday events and year-end business spending. Contributing to this quarter�s results are our three corporate-managed offices that are showing steady increases in enrollment and transaction volume.

�Quarter after quarter, we have been able to report positive net cash provided by operating activities. During the second quarter, we received 87% of our net payments from members via credit card or electronic funds transfer (EFT). EFT enables us to collect payments sooner and lessens the likelihood of non-payments. Strong cash flow has been an important component in helping us complete three key acquisitions, buying back and retiring our common stock, and pursuing initiatives to increase future revenues.�

White continued, �Several of our revenue initiatives over the last twelve months are beginning to gain traction, including our hiring of an industry veteran as our national sales manager and engaging a seasoned new member registration individual in our Chicago location.

�Expenses for corporate salaries, wages and employee benefits and selling, general and administrative have increased over last year as we invest in new revenue generating activities; however, as a percentage of revenue these expenses have trended downward from 41% in 2003 to 22% today. While continuing to refine and enhance our current initiatives, we will be devoting resources to our newest revenue generating initiative, Software as a Service, which we announced last week.�

Second quarter highlights:

�         Revenue was $4,175,000 in 2008 compared to $3,665,000 for the second quarter in 2007, a 14% increase. Revenue for first six months of 2008 was $8,028,000 compared to $7,455,000 in the same period in 2007, an 8% increase.

�         For the quarter and six month period, generated revenue from the acquisition of Intagio assets was $352,000 and $639,000, respectively, and $119,000 and $211,000 in organic growth from existing operations, respectively.

�         Net cash provided by operating activities for the second quarter increased to $1,018,000 from $423,000 for the same period in 2007, a 141% increase. For the six month period ended January 31 net cash provided by operating activities increased 31% to $1,785,000 from $1,367,000 for the same period in 2007.

�         Stockholders� equity increased $413,000 or 3% to $12,754,000 at January 31 from October 31, 2007. Cash and cash equivalents increased to $1,091,000 as of January 31 from $254,000 on October 31, 2007.

�         Income from operations excluding the non-cash items of stock-based compensation, depreciation, and amortization was $671,000 or 4-cents per share for the second quarter of 2008, and $1,128,000 or 6-cents per share for the six month period of 2008.

�         New member registrations increased 28% to 632 in the second quarter from 492 in the same period last year, and for the six month periods registrations increased 19% to 1,588 from 1,333.

�         ITEX acquired a 15% equity position in MyTypes, Inc., a Seattle-based technology and small business blogging company. As part of the collaboration, they engaged two MyTypes senior software engineers to work on our search engine optimization and marketing initiatives for a limited time.

�         ITEX retained two top Chicago marketing firms - The Goodness Company and Sigale Public Relations - to provide additional, professional assistance to its franchisees.

�         ITEX dismissed a defamation complaint filed in September 2006 upon execution of a stipulated judgment payable to the company in the sum of $100,000 contingent on certain, future events. There was no impact to earnings or the balance sheet for this judgment.

�         Subsequent to the end of the second quarter, a membership list had been acquired of approximately 400 member businesses in Cleveland, Ohio.

White concluded, �As our success and visibility increases, we expect to become more attractive to the investment community, as evidenced by the recent invitations to present at the Roth Capital 20th Annual Growth Stock Conference in February and the upcoming Montgomery Technology Conference in mid March. Meanwhile, as we expected, the hostile tender offer is getting little attention from shareholders. Income from operations for our second quarter includes our expenses associated with responding to this tender offer.�

ITEX Corporation's report on Form 10-Q can be found at www.sec.gov. For more information on ITEX visit www.itex.com.