ITEX Announces Results for Fiscal Year 2005

Bellevue, WA October 31, 2005 ITEX Corporation (OTCBB: ITEX), The Cashless MarketplaceSM, a leading marketplace for cashless business transactions in North America, today filed its Form 10-KSB with the Securities and Exchange Commission (SEC) and announced its results for fiscal year ended July 31, 2005.

We ended the final month of our fiscal year by completing the acquisition of BXI Exchange, Inc. (BXI), the second largest cashless marketplace in North America behind ITEX, said Steven White, chairman and CEO.  This was a significant milestone for the industry and for us in particular, further catapulting us ahead of our competitors as we continue to lead and set the trends for the cashless marketplace industry.

The merger of the two companies' member bases and broker networks was an integral part of ITEX's goal of becoming the hub for cashless transactions. No other company in the industry has the scope of presence throughout the United States and Canada or a nationwide franchise model. ITEX's cash revenues are more than triple its nearest competitor.

We believe our national presence, longevity and breadth of products and services will make ITEX the clear choice for businesses considering utilizing the benefits of a cashless marketplace, White said.  Our expectation is that businesses will want to align themselves with the industry leader.

We have now completed eight consecutive quarters of operational profitability.  Our cash flow is strong, further positioning us to take advantage of opportunities as they arise and allowing us to continue investing in our technology strategies, White said. Results for fiscal year 2005 reflect our successful efforts to generate net income while investing in growing the company, providing support programs for our Broker Network, member transaction tools, technology infrastructure upgrades, and online initiatives. We expect our revenues to increase in the upcoming fiscal year and our operations to continue to be profitable.

Fiscal Year 2005 Highlights

·         Completed the acquisition of BXI Exchange, Inc.

Revenue was $10,453,000, compared to $10,283,000 for fiscal year 2004.

·         Income from operations was $729,000, or 4 cents a share, compared to $1,031,000, or 5 cents a share, for fiscal year 2004.  In fiscal year 2005, ITEX expensed $309,000 including $98,000 for the BXI acquisition plus $222,000 for Broker investment incentives, which were not applicable in fiscal year 2004.

·         Total net income was $3,098,000, or 17 cents a share, compared to $2,653,000, or 15 cents a share, for the prior year. In fiscal year 2005 the company realized a gain of $2,260,000 as an income tax benefit. In fiscal year 2004 the company realized a gain of $1,654,000 as a gain on sales of corporate-owned offices.

·         Assets increased to $9,125,000 compared to $2,923,000 for fiscal year 2004.

·         Business members participating in the ITEX Marketplace increased to more than 22,000 from 13,400 the prior fiscal year.

  ITEX Corporation's yearly report on Form 10-KSB can be found at www.sec.gov

About ITEX:

Founded in 1982, ITEX is a leading marketplace for cashless business transactions across North America. ITEX processes over $250 million a year in transactions across 22,000 member businesses and 96 regional licensees. Member businesses increase sales and open new markets by utilizing ITEX Dollars to exchange goods and services. ITEX is powered by ITEX Payment Systems, the leading payment technology platform for powering cashless business transactions headquartered in Bellevue, Washington.

Contact:
Alan Zimmelman
425.463.4017
alan@itex.com

This press release contains forward-looking statements that involve risks and uncertainties concerning our expected performance (as described without limitation in the quotations from current management in this release) and comments within the safe harbor provisions established under The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of our future performance. We believe that these potential risks and uncertainties include, without limitation: that ITEX will be unable to successfully complete its integration strategies or achieve planned synergies; the continuing development of successful marketing strategies for our concepts; our ability to sustain profitability; the availability of adequate working capital; our dependence both on key personnel and our broker network; and the effect of changes in the overall economy and in technology. Statements of expected synergies, execution of integration plans and management and organizational structure relating to ITEX's acquisition of BXI are all forward-looking statements. Statements in this release should be evaluated in light of these factors. These risk factors and other important factors that could affect our business and financial results are discussed in our periodic reports and filings with the Securities and Exchange Commission, including our Forms 10-KSB and Forms 10-QSB, which are available at www.sec.gov., including under the caption, "Management's Discussion and Analysis of Financial Condition and Results of Operations." All information set forth in this release is as of October 28, 2005, and ITEX undertakes no duty to update this information.