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August 26, 2003

Written by Bob Meyer, Editor of BarterNews

IMS Net Revenue Jumps UP 55%

International Monetary Systems (OTCBB:INLM) reports that the internal growth of the company's Continental Trade Exchange barter network, plus their most recent acquisitions (Tradecorp of Columbus, OH, BarterNet of Brentwood, CA, TradeMasters of Louisville, KY), are paying off. IMS reported net revenue of $1,013,231 for the second quarter ending June 30, 2003. Last year's second quarter net was $653,700.

IMS is the cover story for the recently published issue of BarterNews magazine. The cover and Editor's Note can be accessed on the Home Page.


Coming To A Mall Near You...More Advertising Opportunities

More money is spent on marketing, promotion, and advertising in the U.S. than the next 57 countries combined. And the ingenious ways of adding to the mix continues to expand. Latest on the horizon will be 1,300 large digital-plasma screens at 64 of Westfield America malls nationwide.

These digital billboard screens will be installed, owned, and operated by AdSpace Networks Inc. The Burlingame (CA) firm is leasing space from Westfield to place 15 to 25 screens in each Westfield mall, depending on the mall's size. The companies will share ad revenue, which is expected to range from $50 million up to $100 million.

The first of the screens will be installed by November at the Garden State Plaza in Paramus (NJ), and Fashion Square in Sherman Oaks (CA).


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Change Continues At ITEX As Company Pursues Firmer Financial Ground

ITEX Corporation (OTCBB:ITEX) reveals their fourth quarter of fiscal 2003, ending July 31, will show a loss. Audited numbers will be released in late October on Form 10-KSB.

CEO Steven White elaborated, "We were faced with a number of expense items that will impact the fourth quarter. A number of unresolved legal issues were recently uncovered by the new management, and were dealt with immediately."

Several outstanding lawsuits were settled in the fourth quarter, incurring over $100,000 in legal fees and settlements. The settlements eliminated further legal costs and potential exposure to cumulative claims, which was significantly higher than the amounts paid.

The company also reported additional litigation claims as a result of the recent restructuring of its executive management team...the corporate staff has been reduced by thirty percent.

ITEX will continue to seek regulatory approval in California, and certain provinces in Canada, to sell franchises. They are currently qualified to sell franchises in 49 of the 50 states.


Extraordinary Revealing Report For Business Owners - Click here.


"The whole bubble of the dot-com era created an awful lot of people who perceived themselves as entrepreneurs."

--Sam Zell

Chicago billionaire and dealer in distressed assets, Sam Zell, attended the University of Michigan, one of the finer colleges in the world. Yet, Zell says he never thinks about his schooling and his business in the same vein. In short, his alma mater never sparked or shaped his entrepreneurial dreams or successes.

Zell lists the following traits as entrepreneurial: high-energy level; the word failure is nonexistent; lonely; thinks about solutions even if it's not his role; a leader; a certain amount of living on the edge; a significant need for recognition; and most important, understands that if you ever have to take a vote, you've lost.

Interestingly, Zell and his now-deceased partner, Robert Lurie, gave $10 million to the University of Michigan to fund an Institute for Entrepreneurial Studies bearing their names. Zell hopes his institute helps people discover the talents they have.

The classes and programs at the Institute are popular because many people have slight or strong entrepreneurial leanings, and they can be more fully developed by training. And for those who do measure 100% (on the Zell meter), entrepreneurship classes may draw them to a business school where they'll likely learn more traditional management skills that will help them.

Another benefit of entrepreneurship training is that some people, those not cut out for the risk and worry, will take the classes and recognize that entrepreneurship is not for them.


Every barter company in the world is listed on our web site, click through to our Global List of Barter Companies.

Restaurant Sales Up—Good Sign For Better Economy

After a year of weekly declines that represented the worst restaurant slump in nearly three decades, industry sales have risen for five consecutive weeks...according to NPD Group, a market-information firm in Port Washington (NY).

The streak of positive sales increases began the week of June 29. Prior to that, the industry sustained the longest stretch of declines since 1975, when NPD began to track tens of thousands of restaurant unit sales by segment and category.

The only concern about the robust gains is that they are not broad-based, but rather concentrated among the largest restaurant chains which are pulling people out of their homes with better marketing.

Savvy independent restaurant owners use the services of a trade exchange which provide them an additional conduit for business, and then will use much of the trade earned for their marketing efforts. (BarterNews has published a special 16-page restaurant report.)


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Here And There. . .
  • TeleTrade International, a company that's provided technology for the barter industry, has announced its new Mature Exchanges program. Trade exchanges with annual collections over $250,000 will be offered a front-end percentage rate equal to, or lower than, many existing credit card collections. For more information: www.teletrade.net or call Gary Lasater (303) 840-7172 ext. 1.
  • The one-year anniversary of the enactment of the Sarbanes-Oxley Corporate Responsibility Act occurred in late July. Still unknown is whether the law's benefits will ultimately outweigh its hefty compliance costs.

    The Johnsson Group, a Chicago consulting firm, estimates Sarbanes-Oxley will add $3 million to $8 million in annual compliance costs for Fortune 500 companies. David Hardesty, an accountant who has written a manual about the act, says we probably won't know if the new law actually prevents fraud. That's because frauds tend to take place mostly at the end of long bull runs, when companies are struggling to meet earnings expectations.

  • Have you signed up to receive a summary via e-mail of the Tuesday Report every week? If not, go to the top of this issue (right hand corner) and sign up!

  • Lighthouse Capital Partners has introduced a new twist, and now wears the hat of banker with their "venture debt" loans. The venture capitalist firm lends money to startups much the way a bank does, but with a VC-tolerance for risk. In short, Lighthouse has figured out a way to get its money back if the borrower goes belly-up. Here's their formula...

    Lighthouse takes a smaller chunk of equity—1% versus the 15% or so normally sought by a VC—and they only deal with startups that already have venture financing. They also charge interest on the capital, typically making loans of $3 million to $7 million at an annual rate of 10% to 14%.

    The loans are backed by assets that have tangible value. So if things go badly and the startup fails, Lighthouse is first in line to foreclose on the available assets. In contrast, traditional VCs often walk away from failed ventures with nothing.

  • The percentage of hotels with fitness facilities has jumped dramatically, from 35% in 1988 to 71% today, according to Smithy Travel Research.

  • Thinking of getting into the horse-racing business? Buying a yearling at auction is quite easy (there are 35,000 sold every year), but remember the odds of success—only 20 of those will ever make it to the Kentucky Derby!

  • Wealthy people in the U.S. (net worth of at least $1 million excluding the value of their primary home) are more pessimistic about their financial future than they were a year ago. The largest contingent of those surveyed, 62%, estimated they had lost from 15% to 40% of their investment portfolio in the past three years. And a rising percentage, 39% today versus 34% a year ago, are very concerned about out-living their money.

    By the year 2030, 70 million people (20% of the population) are expected to be 65 years or older, compared with 36 million (almost 13%) today. Retirees will take $670 billion from their investments for living expenses in 2012, up from $134 billion in 2001, according to Boston consultant Cerulli Associates.

  • A new census report says that if it were not for Latino immigration, California's population would be falling. Between 1995 and 2000, more than 600,000 of its residents moved out of what was once America's promised land. According to the Tax Foundation, California is ranked second-worst in the nation (after Mississippi) in a May study of state business tax climates. (State government employment grew 13.6% from 1997-2001, or twice as fast as state population growth.)

  • If you've missed any of our weekly Tuesday Reports the past three years we have an archive of issues for you at the bottom of this week's letter...check it out!
We welcome your comments, questions, and observations.
Copyright BarterNews 2003. Redistribution of BarterNews content expressly prohibited without the prior written permission of BarterNews.

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