The Committee to Enhance ITEX Files its Definitive Proxy Statement and Answers Frequently Asked Questions

CRANFORD, N.J., Nov. 11, 2010 /PRNewswire/ -- The Committee to Enhance ITEX (the "Committee") answers the following frequently asked questions:

Do you think it's a good idea to conserve a significant portion of ITEX's capital "to capitalize on opportunities as they arise"?

No – the Committee does not feel that ITEX Corp. (OTC Bulletin Board: ITEX) should repeat its acquisition strategy as executed since calendar 2007 with over $4 million spent on acquisitions (Intagio, ATX Barter, a minority stake in Mytypes.com, and Intagio Media). Excess capital above what is necessary to run and organically grow ITEX should be returned to shareholders.

Is $5 million an excessive amount of capital to return to shareholders during calendar year 2011? Will this return of capital affect ITEX's existing credit lines with U.S. Bank?

No - between the end of FY 2003 to FY 2009, ITEX did not have over $2.6 million in cash on its Balance Sheet at any time, but as of July 31, 2010, ITEX had $5.17 million in cash. In our estimation, if ITEX generates the same level of free cash flow in calendar 2011 as in calendar 2010, even after the Committee's plan to return $5 million in capital to shareholders and any potential costs related to our successful proxy solicitation, ITEX will still have over $2 million in cash on its balance sheet at the end of calendar 2011. The Committee has nominated board members, each of whom has worked with financial institutions either as a public company CFO, a business owner, Fortune 500 Company executive or investment banker. Our board members will ensure that no covenants or conditions within the existing credit facility are breached by paying out any dividend.

How can you return such a significant amount of capital to shareholders and grow ITEX's core franchise business?

While franchise-related revenues have only increased from $14.25 million in fiscal 2006 to $14.76 million by fiscal 2010, ITEX's Selling, General, and Administrative expenses have increased from $2.9 million in fiscal 2006 to $5.2 million by the end of fiscal 2010.  Additionally, over that same time period, ITEX's headcount increased from 19 to 35 personnel. The Committee intends to focus ITEX on its core business, the franchise network. We will cut existing expenses not focused on growing the core business, while increasing our focus on improving the sales, training, financial growth incentives, and value proposition of the Broker Network.

How do franchisees feel about the potential change to ITEX's Board of Directors?

Members of the Committee have spoken to over 10% of the existing franchise base.  These franchisees, both large and small, have expressed interest in working with a new leadership team. The Committee does anticipate existing management will attempt to influence the existing ITEX Broker Board to support them, and we would not be surprised if the franchisees publicly support the existing management team, as they are currently in control of ITEX.

Do you intend to turn ITEX  into a holding company or take it private?

Absolutely not – the Committee intends to return excess capital to shareholders, not keep it on the balance sheet earning a very-low rate of return.

Additionally, on November 9, 2010, the Committee filed its definitive proxy statement with the SEC related to ITEX Corp.'s 2010 Annual Meeting, scheduled to be held on December 10, 2010.  The Committee's definitive proxy statement is available on the SEC's website at http://www.sec.gov and at our website, www.enhanceitex.com (the "Website"). We encourage shareholders to visit our website regularly and to share their thoughts with us.

Please refer to the Website (www.enhanceitex.com) for further information about the Participants.

SOURCE The Committee to Enhance ITEX