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.