April 2008
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April 15, 2008

Innuity, Inc. Reports 2007 Financial Results

The Company Announces the Pending Sale of Jadeon, Inc. and $5.1 Million Reduction in Net Loss from Continuing Operations From 2006

REDMOND, Wash. (April 15, 2008) – Innuity, Inc. (INNU.OB, http://www.innuity.com), a Software as a Service (SaaS) company that designs, acquires, and integrates applications to deliver affordable solutions to small businesses, reported its financial results for fiscal year 2007.

Summary of Financial Results

Innuity’s net loss from continuing operations for the fourth quarter of 2007 was ($45,000), compared to a net loss of $1.8 million from continuing operations during the same period in 2006. Innuity’s net loss from continuing operations for 2007 was $3.0 million, or $0.14 per share, compared with a net loss from continuing operations of $8.1 million, or $0.42 per share, for 2006. Consolidated revenues from continuing operations for the fourth quarter of 2007 increased to $2.5 million as compared to $1.5 million for the fourth quarter of 2006. Consolidated revenues from continuing operations for the full year 2007 increased slightly to $6,490,000 from $6,353,000 in 2006.

 The significant reduction of losses for the fourth quarter and full year 2007 resulted from the tightening of operating costs, the elimination of royalty payments, the sale of the Vista.com domain name to VistaPrint, and the improvement of margins.

The net loss from both continuing and discontinued operations for the full year 2007 was $3.0 million, or $0.13 per share, compared to $8.5 million, or $0.43 per share, for 2006.  Innuity’s adjusted EBITDA from continuing operations was a negative $10,000 for the full year 2007, representing an improvement of over $5 million from adjusted EBITDA from continuing operations in 2006.

Discussion of Discontinued Operations

During the fourth quarter of 2007, Innuity entered into negotiations with a third party to sell substantially all of the assets used in the Innuity’s In-Store Systems business line that has operated as Jadeon, Inc. In accordance with Statement of Financial Accounting Standards (SFAS) No. 144, “Accounting for Impairment or Disposal of Long-Lived Assets” the operations of Jadeon, Inc. are being presented as a discontinued operation.

Following the completion of this sale, which is expected to occur during the first half of the second quarter of 2008, Innuity intends to use the proceeds to retire its remaining secured debt, invest in the growth of its high-margin business lines and for general corporate purposes.

“I am pleased with the significant move towards profitability we were able to deliver during the fourth quarter and the improved financial stability that I believe will come with the completion of the sale of our In-Store Systems business line,” said John Wall, Innuity Chairman and CEO. “We are now in a position to improve our balance sheet and to expand our focus from profitability to include revenue growth and customer acquisition in our continuing operations.”

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 facilitates 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.  In addition, we have incurred losses since our inception, and we may not achieve or maintain profitability.  We will need additional funding to support our operations and capital expenditures, which may not be available in amounts or terms acceptable to us.  If adequate additional funds are not available, we may be required to delay, reduce the scope of or eliminate implementation of material parts of our business strategy.  Further, although we expect to complete the sale of our In-Store Systems business line in the second quarter of 2008, we may be unable to enter into a definitive agreement or close this transaction for a number of reasons.  If we do not complete the sale of our In-Store Systems business line, our business and future prospects could be limited.  Additional risks and uncertainties include our financial condition and those other risk factors described in our quarterly reports on Form 10-Q, our annual report on Form 10-K, and other documents we file periodically with the Securities and Exchange Commission.

Non-GAAP Financial Information

To supplement Innuity’s consolidated financial statements presented in accordance with GAAP and to provide clarity internally and externally, Innuity uses Adjusted EBITDA which is a non-GAAP measure of financial performance. Adjusted EBITDA is calculated by reducing net losses computed in accordance with GAAP for interest expense, income taxes, depreciation, amortization and share-based payments.  This measure, among other things, is one of the primary metrics by which Innuity evaluates the performance of its business and believes this measure is useful to investors because it represents meaningful supplemental information regarding liquidity and Innuity’s ability to fund operations and its financing obligations.

Innuity’s management believes that investors should have access to, and Innuity is obligated to provide, the same set of tools that management uses in analyzing the company’s results. Non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, and should not be considered in isolation, as a substitute for, or superior to, GAAP results. Non-GAAP terms, as defined by Innuity, may not be comparable to similarly titled measures used by other companies. A reconciliation of Innuity’s GAAP net losses from continuing operations  to Adjusted EBITDA from continuing operations for the years ended December 31, 2007 and 2006 is included with the financial statement tables.

IR contact:
Jordan Silverstein
Christine Berni
The Investor Relations Group
212-825-3120 (office)

Company contact:
Linden N Barney