ITEX Announces Results for Fiscal Year 2007

Bellevue, WA October 2, 2007 ITEX Corporation (OTCBB: ITEX), The Membership Trading CommunitySM, a leading marketplace for cashless business transactions in North America, today filed its Form 10-KSB with the Securities and Exchange Commission and announced its results for the fiscal year ended July 31, 2007.

Over the past four fiscal years, we have increased operational income and cash flow year over year. During the same period, we increased stockholder equity from a negative $481,000 to more than $12,000,000, increased revenue 34% and almost doubled our membership base.  We attribute our growth to focusing our model on cashless transaction processing for small businesses in a unique, vertical marketplace.  Our fiscal 2007 results reflect another solid year with gains in key areas including income from operations, operational cash flow and earnings per share, said Steven White, Chairman and CEO.

As a result of our gains and strong cash flow, our balance sheet continued to strengthen in fiscal 2007 with total assets increasing 34% and total liabilities decreasing 27%.  Our ability to invest in technology and to initiate new projects in order to grow revenue affords us a firm footing for the future, White continued.

White added, During fiscal 2007, we upgraded and expanded the franchise portion of our website, www.itex.com; we retained outside technology and marketing firms to help execute a multi-faceted strategy to increase revenue; and we announced our Executive Privileges Program.  We anticipate that these programs and initiatives will have a long-term positive effect on our operations by expanding our Trading Community member base and increasing participation in our Marketplace.

Fiscal Year 2007 Highlights

·         Income from operations increased 12% in fiscal year 2007 to $1,505,000 from $1,341,000 for fiscal year 2006.

·         Operational cash flow increased 12% in fiscal year 2007 to $2,057,000 from $1,836,000 for fiscal year 2006.

·         Total net income increased 31% in fiscal year 2007 to $4,504,000 from $3,433,000 for fiscal year 2006.  In fiscal year 2007 and 2006 we realized gains of $2,843,000 and $1,975,000, respectively, as an income tax benefit.  Most of ITEX's future tax benefit is now recorded on our balance sheet as a deferred tax asset.

·         Earnings per Share (diluted) increased 39% in fiscal year 2007 to 25 cents from 18 cents for fiscal year 2006. 

·         Earnings per Share (diluted) from operations increased 14% in fiscal year 2007 to 8 cents from 7 cents for fiscal year 2006. 

·         Cash and cash equivalents increased 458% in fiscal year 2007 to $1,753,000 from $314,000 for fiscal year 2006.

·          Assets increased 34% in fiscal year 2007 to $14,304,000 from $10,663,000 for fiscal year 2006.

·         Total liabilities decreased 27% in fiscal 2007 to $1,974,000 from $2,695,000 in fiscal year 2006.

ITEX repurchased 438,000 and 1,050,000 shares of common stock during fiscal years 2007 and 2006, respectively.  There were 17,918,632 total outstanding shares as of October 2, 2007, with no outstanding options or warrants. We completed more than $270,000,000 in ITEX dollar transactions by processing 314,000 transactions.

 ITEX Corporation's report on Form 10-KSB can be found at www.sec.gov and on the investor relations portion of its website at www.itex.com.

About ITEX:

ITEX, The Cashless Marketplace, is a leading marketplace for cashless business transactions in North America. ITEX processes more than $250 million a year in transactions through 22,000 member businesses managed by 95 franchisees and licensees. Member businesses increase sales through an exclusive distribution channel by utilizing the ITEX Dollar to exchange goods and services. ITEX is powered by ITEX Payment Systems, the leading payment technology platform for processing cashless business transactions. ITEX is 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: the continuing development of successful marketing strategies for our concepts; our ability to increase revenues and sustain profitability; the availability of adequate working capital; our dependence both on key personnel and our franchise network; and the effect of changes in the overall economy and in technology. 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 2, 2007, and ITEX undertakes no duty to update this information. For more information, please visit www.itex.com