Innuity, Inc. Reports Q-1 2008 Financial Results

The Company Announces a $400,000 Reduction in Net Loss
REDMOND, Wash.--(Business Wire)--
Innuity, Inc. (OTCBB: INNU), 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 the quarter ended March 31, 2008.

Summary of Financial Results

Innuity's net loss from continuing operations for the first
quarter of 2008 was $1.0 million, or $0.04 per share, compared to a
net loss of $1.4 million, or $0.06 per share, from continuing
operations during the same period in 2007. Consolidated revenues from
continuing operations for the first quarter of 2008 decreased to $1.2
million as compared to $1.3 million for the first quarter of 2007. The
reduction of losses resulted from the tightening of operating costs.

The net loss from both continuing and discontinued operations for
the first quarter of 2008 was $1.2 million, or $0.05 per share,
compared to $1.6 million, or $0.07 per share, for the same period in
2007. Innuity's adjusted EBITDA from continuing operations was a
negative $460,000 for the first quarter of 2008, representing an
improvement of over $342,000 from adjusted EBITDA from continuing
operations for the first quarter of 2007.

Discussion of Discontinued Operations

On May 2, 2008, Innuity sold substantially all of the assets used
in its In-Store Systems business line that has operated as Jadeon,
Inc. to Radiant Systems, Inc. for $7.0 million. 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 presented in Innuity's financial
statements as a discontinued operation.

Part of the proceeds from the sale of Jadeon were used to retire
its $1.0 million 15% secured debt that was payable to Imperium Master
Fund, Ltd. Innuity also paid off $200,000 of notes payable to a
shareholder that were in default. Innuity intends to invest the
remaining proceeds in the growth of its high-margin business lines and
for general corporate purposes.

"We are pleased to have been able to retire our secured debt and
improve our balance sheet with the sale of Jadeon," said John Wall,
Chairman and CEO of Innuity. "I am now eager to turn our attention to
growing our higher margin small business service offerings during the
remainder of 2008."

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(TM). 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. 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 three months ended March 31, 2008 and 2007 is included with
the financial statement tables.

-0-
*T
INNUITY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

March 31, December 31,
2008 2007
----------------------------------------------------------------------

ASSETS

Current Assets
Cash and cash equivalents $ 52,354 $ 200,877
Settlement deposits 358,747 361,675
Settlement receivable, net of
allowance for doubtful accounts 121,375 156,817
Trade accounts receivable, net of
allowance for doubtful accounts 221,901 322,131
Current assets relating to
discontinued operations 1,379,801 1,252,763
Other current assets 96,769 132,634
----------------------------------------------------------------------
Total Current Assets 2,230,947 2,426,897
----------------------------------------------------------------------

Property and equipment, net 466,174 578,864
Intangible assets, net 301,592 412,915
Long-term assets relating to discontinued
operations 2,073,633 2,195,993
----------------------------------------------------------------------
Total Assets $ 5,072,346 $ 5,614,669
----------------------------------------------------------------------

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
Trade accounts payable $ 1,347,391 $ 1,449,062
Accrued salaries and wages 431,780 413,737
Merchant settlement payable 412,947 389,993
Accrued liabilities 809,431 854,785
Deferred revenues 186,607 183,093
Line of credit 85,412 -
Related party notes payable, current
portion, net of discount 616,481 684,703
Long-term debt, current portion, net
of discount 1,226,280 1,103,847
Capital lease obligations, current
portion 189,146 195,662
Current liabilities relating to
discontinued operations 4,994,153 4,624,111
----------------------------------------------------------------------
Total Current Liabilities 10,299,628 9,898,993

Long-Term Liabilities
Long-term debt, net of current portion 57,668 82,821
Capital lease obligations, net of
current portion 120,398 165,074
----------------------------------------------------------------------
Total Long-Term Liabilities 178,066 247,895

----------------------------------------------------------------------
Total Liabilities 10,477,694 10,146,888
----------------------------------------------------------------------

Commitments and Contingencies
Stockholders' Deficit (5,405,348) (4,532,219)
----------------------------------------------------------------------
Total Liabilities and Stockholders' Deficit $ 5,072,346 $ 5,614,669
----------------------------------------------------------------------
*T

-0-
*T
INNUITY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

For the Three Months Ended March 31, 2008 2007
----------------------------------------------------------------------

Revenues
Merchant services $ 691,413 $ 662,492
Promotion services 511,628 620,945
----------------------------------------------------------------------
Total revenues 1,203,041 1,283,437

Operating expenses
Cost of merchant services 158,232 196,220
Cost of promotion services 235,301 256,421
General and administrative 687,716 951,873
Selling and marketing 483,354 602,168
Research and development 338,148 458,417
Amortization expense 111,323 111,323
----------------------------------------------------------------------
Loss from operations (811,033) (1,292,985)
----------------------------------------------------------------------

Other income (expense)
Interest expense, net (217,235) (95,554)
----------------------------------------------------------------------
Total other income (expense) (217,235) (95,554)
----------------------------------------------------------------------

Loss before income taxes (1,028,268) (1,388,539)
----------------------------------------------------------------------

Income tax benefit - -
----------------------------------------------------------------------
Loss from continuing operations (1,028,268) (1,388,539)

Loss from discontinued operations (143,579) (166,166)
----------------------------------------------------------------------
Net loss $(1,171,847) $(1,554,705)
----------------------------------------------------------------------

Basic and Diluted Loss from Continuing
Operations
Per Common Share $ (0.04) $ (0.06)
----------------------------------------------------------------------

Basic and Diluted Loss from Discontinued
Operations Per Common Share $ (0.01) $ (0.01)
----------------------------------------------------------------------

Basic and Diluted Loss Per Common Share $ (0.05) $ (0.07)
----------------------------------------------------------------------

Basic and Diluted Weighted-Average
Common Shares Outstanding 24,039,459 21,446,188
----------------------------------------------------------------------
*T

-0-
*T
Three Months Ended March
Adjusted EBITDA from Continuing Operations 31,
2008 2007
------------ ------------

Net loss from continuing operations $(1,028,268) $(1,388,539)
Add Back:

Interest expense 217,235 95,554

Amortization 111,323 111,323

Depreciation 79,052 79,000

Share based Payments 160,931 300,406
------------ ------------

$ (459,727) $ (802,256)
============ ============
*T

The Investor Relations Group
Jordan Silverstein/Christine Berni, 212-825-3210
jsilverstein@investorrelationsgroup.com
or
Innuity, Inc.
Linden N. Barney, 801-705-5163
CFO
lindenb@innuity.com

Copyright Business Wire 2008