$3.15 Million purchase increases business member count to 24,000 BELLEVUE, Wash., July 30 /PRNewswire-FirstCall/ -- ITEX Corporation(OTC Bulletin Board: ITEX), The Membership Trading Community(SM), a leadingmarketplace for cashless business transactions in North America, hasentered into an agreement to acquire the trade exchange marketplacepreviously operated by Intagio Corporation of San Francisco, California.The transaction increases ITEX's business member base to 24,000 memberbusinesses. Beginning Wednesday, August 1, more than 2,000 members of the IntagioTrading Network will migrate to the ITEX Trading Community and paymentsystems platform. The core markets acquired from the Intagio TradingNetwork are San Francisco, Chicago, Cleveland, two suburbs near Hartford,CT, New York City, central New Jersey, eastern Massachusetts and Wisconsin.These former Intagio Trading Network markets will continue to be servicedby the nine employees who have managed the Intagio Trading Network memberbase, and who will be offered employment with ITEX. The new offices will beadministered by ITEX's executive office until such time it is deemedbeneficial to structure them as one or more franchisees. Following thetransaction, Intagio will direct its resources toward its media planningand placement, and online luxury hotel marketing business units. "We are aggressively pursuing revenue growth and the expansion of ourmember base," said ITEX Chairman and CEO Steven White. "With thisacquisition, we achieve both objectives and further extend our leadershipposition in the cashless transaction industry. The additional businessmembers and markets in our trading community place us in a strongerposition to expand revenue and profits by offering more content andtransaction opportunities to our members." "In addition, the newly acquired corporate-owned and operated officesprovide a valuable opportunity to test new solutions and marketingtechniques that are currently being explored," White continued. "Althoughwe are seeking innovative ways to increase member registrations andrevenue, we want to make certain that our new initiatives are successfulbefore we launch systems to the entire franchise network." Terms of the Transaction The purchase price of approximately $3,150,000 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; and -- In addition, a 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 $1.0million credit line with U.S. Bank to fund the down payment. About ITEX ITEX, The Membership Trading Community(SM), is a thriving community ofmember businesses buying and selling more than $250 million a year in ITEXdollar transactions. Member businesses increase sales through an exclusivedistribution channel managed by franchisees, licensees and corporate-ownedlocations, by utilizing ITEX dollars to exchange goods and services. ITEXis powered by ITEX Payment Systems, the leading payment technology platformfor processing cashless business transactions. ITEX is headquartered inBellevue, Washington. This press release contains forward-looking statements that involverisks and uncertainties concerning our expected performance (as describedwithout limitation in the quotations from current management in thisrelease) and comments within the safe harbor provisions established underThe Private Securities Litigation Reform Act of 1995. Actual results maydiffer materially from the results predicted and reported results shouldnot be considered as an indication of our future performance. We believethat these potential risks and uncertainties include, without limitation:the continuing development of successful marketing strategies for ourconcepts; our ability to increase revenues and sustain profitability; theavailability of adequate working capital; our dependence both on keypersonnel and our franchise network; and the effect of changes in theoverall economy and in technology. Statements in this release should beevaluated in light of these factors. These risk factors and other importantfactors that could affect our business and financial results are discussedin our periodic reports and filings with the Securities and ExchangeCommission, including our Forms 10-KSB and Forms 10-QSB, which areavailable at
ITEX Corporation Enters Into Agreement to Acquire Intagio Commercial Trading System
August 08, 2007, 1:07 a.m. EDT 4 Min Read
