ITEX Corporation Acquires Intagio ... Adds 2,000 Members

ITEX Corporation (OTCBB: ITEX) has entered into an agreement to acquire the trade exchange marketplace operated by Intagio Corporation of San Francisco (CA). The transaction increases ITEX’s business member base to 24,000 member businesses.

Beginning August 1, more than 2,000 members of the Intagio Trading Network will migrate to the ITEX trading community and payment systems platform. The core markets acquired are San Francisco, Chicago, Cleveland, two suburbs near Hartford (CT), New York City, central New Jersey, eastern Massachusetts, and Wisconsin.

These former Intagio markets will continue to be serviced by the nine employees who have managed their member base, and will be offered employment with ITEX.

ITEX will own and operate the former Intagio operations until such time it is deemed beneficial to sell it to one or more franchisees. Following the transaction, Intagio will direct its resources toward its media planning and placement, and online marketing of luxury hotel business units.

“We are aggressively pursuing revenue growth and the expansion of our member base,” said ITEX Chairman and CEO Steven White. “We achieve both objectives and further extend our leadership position in the cashless transaction industry. The additional business members and markets in our trading community place us in a stronger position to expand revenue and profits by offering more content and transaction opportunities to our members. This acquisition will provide added value for members, the franchise network and for our shareholders.”

“In addition, the newly acquired corporate-owned and operated offices provide a valuable opportunity to test new solutions and marketing techniques that are currently being explored,” White continued. “While seeking to increase member registrations and revenue, we want to make certain that our new initiatives are successful before we launch systems to the entire franchise network.”  

The purchase price of approximately $3.15 million includes the following:

·         $2 million down payment

·         Up to a $1.15 million note financed by the seller at 8% APR for 2 years (up to $150,000 of the note will be determined based on current receivables as of July 31, 2007)

·         Assumed certain liabilities not to exceed $30,000

·         Maximum earn-out up to $150,000 for one year, beginning August 1, 2008, based on certain performance requirements

The acquired assets include the following:

·         Contracts between Intagio and specified clients, including the client relationships

·         Historical transactional data and associated accounts

·         Accounts receivable

ITEX utilized existing cash plus approximately $350,000 of its $1.0 million credit line with U.S. Bank to fund the down payment.

For more information go to www.itex.com.