ITEX DOLLAR ACTIVITY

3 Months Ended

Oct. 31, 2011

Business Activity Disclosure [Textblock]

NOTE 2 – ITEX DOLLAR ACTIVITY

As discussed in Note 1, the Company receives ITEX dollars from members’ transaction and association fees, and, to a lesser extent, from other member fees. ITEX dollars earned from members are later used by the Company as a method of payment in revenue sharing and incentive arrangements with its Broker Network, co-op advertising with Marketplace members, as well as for certain general Marketplace and corporate expenses.

The Company records transactions at the fair value of products or services received when those values are readily determinable. Most of ITEX dollar transactions during the periods presented in these financial statements lacked readily determinable fair values and were recorded at the cost basis of the ITEX dollars surrendered, determined to be zero.

During three-months ending October 31, 2011 and 2010, the Company spent ITEX dollars on certain products and services for corporate purposes such as legal, consulting and marketing services with readily determinable fair market values. Those ITEX dollar activities were included in the Company’s consolidated statements of income as follows (in thousands):

	Three-months ended October 31,
	2011		2010
Revenue:
Marketplace and other revenue	$	60	$	73

Costs and expenses:
Cost of marketplace revenue		-		-
Corporate salaries, wages and employee benefits		-		-
Selling, general and administrative		60		73
Depreciation and amortization		-		-
		60		73

Income from operations		-		-