May 10, 2007
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May 10, 2007


Innuity, Inc. Reports First Quarter 2007 Financial Results

Positive Revenue Increase and Significantly Reduced Losses Generate Strong Momentum


REDMOND, Wash. (May 10, 2007) – Innuity, Inc. (INNU.OB), a Software as a Service (SaaS) company that designs, acquires and integrates applications to deliver affordable solutions to small business, reported its financial results for the first quarter of 2007.

Consolidated revenues for the first quarter of 2007 increased 6% to $5.3 million from $5.0 million reported during the same quarter of 2006.  The Company’s net loss for the first quarter of 2007 was $1.6 million, or $0.07 per share, compared with a net loss of $2.5 million, or $0.13 per share, for the first quarter of 2006.  The significant improvement to net loss is based on the elimination of royalty payments, tightening of operating costs, and a decline in interest expense.

“Innuity has already made substantial business and financial progress in 2007.  In the second quarter, we closed $2 million in funding with Imperium Master Fund, Ltd., which allowed us to settle a $1.2 million liability to Citysearch for $600,000,” said John Wall, Innuity chairman and CEO. “As we move towards achieving cash flow positive operations over the next several quarters we now have additional resources and an improved balance sheet to effectively drive our progress.”

Wall continued, “We also have successfully introduced a new product line and created customer growth momentum with our launch of LeadConnect, which provides cost-effective local search results for small businesses. Our new agreement with Amerivon should accelerate the penetration of our products into the mass retail market, and our agreement extension with International Merchant Services (IMS) designates that our Creditdiscovery product will serve as their primary customer acquisition tool.”

About Innuity

Headquartered in Redmond, WA, Innuity is a Software as a Service (SaaS) company that designs, acquires and integrates applications to deliver solutions for small business. Innuity’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.

Forward-Looking Statements

This release contains information about management’s view of 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. Actual results may differ materially from those indicated by these forward-looking statements as a result of a variety of factors, including, but not limited to, risks and uncertainties associated with our ability to develop or offer additional Internet technology applications and solutions in a timely and cost-effective manner.  If we are unable to develop, license, acquire or otherwise offer through arrangements with third parties the additional services that our customers desire, or if any of our existing or future relationships with these third parties were to be terminated, we could lose our ability to provide key Internet technology solutions at cost-effective prices to our customers, which could hinder our ability to introduce new products and services and could cause our revenues to decline.  Additional risks and uncertainties include our financial condition and those other risk factors described in our quarterly reports on Form 10-QSB, our annual report on Form 10-KSB, and other documents we file periodically with the Securities and Exchange Commission.

IR contact:
Jordan Silverstein
The Investor Relations Group
212-825-3120 (office)
jsilverstein@investorrelationsgroup.com

Company contact:
Shivonne Byrne
Innuity, Inc.
425-968-0306 (office)
shivonne@innuity.com