March 2006
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March 2006

Innuity, Inc. Issues 2005 Financial Results


Internet Technology Company Reports Substantial Revenue Increase Due to Strategic Acquisitions Related to Its Aggressive Growth Strategy


REDMOND, Wash. (March 23, 2006) – Innuity, Inc., an Internet technology company dedicated to helping small businesses succeed, today announced its financial results for the year ended December 31, 2005.

Consolidated revenues were $12.5 million for the 2005 year, a 205-percent increase from $4.1 million reported for 2004. This substantial increase in revenues resulted primarily from the 2005 strategic acquisitions of the online marketing company 10xMarketing (now Innuity’s Lead Generation Services business) and the POS systems company Jadeon (now Innuity’s In-store Systems business).

Innuity reported an operating loss of $9.1 million for the 2005 year as compared to a $3.2 million loss reported in 2004. The company’s net loss for 2005 was $9.4 million (or $(1.02) per basic and diluted share), compared to a net loss of $3.4 million for 2004 (or $(1.32) per basic and diluted share). The operating loss and net loss for the 2005 year include a $3.4 million increase in non-cash charges over the 2004 year. These non-cash charges for 2005 of $5.6 million, include $3 million for share based payments, $1.7 million amortization expense relating to prepaid royalties and $900,000 for depreciation and amortization expense for 2005. Non-cash charges for 2004 included $1.4 million for depreciation and amortization and $800,000 for asset impairment. The increase in the company’s operating and net losses was due primarily to acquisition activity and building the necessary technology, integration and corporate infrastructure to enable Innuity to continue its strategic growth strategy and to meet the reporting requirements of a publicly traded company. Innuity ended 2005 with a working capital deficit of $2.2 million.

“Innuity had a landmark year in 2005 in that we made two strategic acquisitions that expand our promotion and commerce offerings to small businesses and we successfully achieved public reporting company status,” said John Wall, chairman and chief executive officer of Innuity. “We see 2006 as a year of continued expansion of our product offerings that benefit small businesses looking to grow their revenues, reach and serve their customers and run everyday operations.”

About Innuity

Headquartered in Redmond, WA, Innuity is an Internet technology company that designs, acquires and integrates applications to deliver solutions for small business. The company’s Internet technology is based on an affordable, on-demand model that allows small businesses to simply interact with customers, business partners, and vendors and efficiently manage their businesses. Innuity delivers its on-demand applications through its Internet technology platform, Innuity Velocity™.  The Velocity technology platform enables use-based pricing, provides the opportunity to choose applications individually or as an integrated suite and ensures minimum start-up costs and maintenance.  For more information on Innuity, go to www.innuity.com

This press release contains statements and information about management’s view of the Innuity’s future expectations, plans and prospects that constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995.  These statements are subject to risks and uncertainties that could cause actual results and events to differ materially from those described, including risks and uncertainties associated with the anticipated benefits of the merger, general economic conditions, Innuity’s inability to sufficiently anticipate market needs and develop products and enhancements that achieve market acceptance, higher than anticipated expenses in future quarters, and Innuity’s working capital deficit and its ability to continue as a going concern.

Media contact:

Katie McFadzean
MWW Group for Innuity
206-505-8333 (office)
kmcfadzean@mww.com

Bob Silver
MWW Group for Innuity
206-689-8505 (office)
206-355-2993 (cell)
bsilver@mww.com

IR contact:

Laurie S. Roop
Shareholder Relations
435-652-3884 (direct)
laurie@shareholder-relations.net