ITEX CORPORATION, S-8, 1998-05-21

ITEX CORPORATION
S-8, 1998-05-21
BUSINESS SERVICES, NEC

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As filed with the Securities and Exchange Commission on May 21, 1998.
File No. 0-18275

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------

FORM S-8/S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------

ITEX Corporation
------------------------------------------------------
(Exact name of registrant as specified in its charter)

Nevada 93-0922994
- -------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

10300 S.W. Greenburg Road, Suite 370, Portland, Oregon 97223
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)

1996 ITEX Corporation Key Employees' Incentive Stock Option Plan,
1997 ITEX Corporation Key Employees' Incentive Stock Option Plan,
1998 ITEX Corporation Key Employees' Incentive Stock Option Plan
- --------------------------------------------------------------------------------
(Full title of the plan)

Donovan C. Snyder, 10300 S.W. Greenburg Road, Suite 370, Portland, Oregon 97223
- --------------------------------------------------------------------------------
(Name, address, including zip code, of agent for service)

Telephone number, including area code, of agent for service: (503) 244-4673
----------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ------------------------ -------------- -------------------- -------------------- --------------
<S> <C> <C> <C> <C>
Title of Securities to Amounts to be Proposed Maximum Proposed Maximum Amount of
be Registered Registered(2) Offering Price Per Aggregate Offering Registration
Share(1) Price Fee
- ------------------------ -------------- -------------------- -------------------- --------------
Common Stock, issuable 2,970,000 (1) $13,563,437.50 $4001.21
upon exercise of
Options
- ------------------------ -------------- -------------------- -------------------- --------------
</TABLE>
(1)Bona fide estimate of maximum offering price solely for the purpose of
calculating the registration fee pursuant to Rule 457(h) of the Securities Act
of 1933, based on the price at which the options outstanding as of the date
hereof may be exercised (1,250,000 @$6.125/share, 755,000 @$3.75/share and
965,000 @$3.1875/share).

(2)Pursuant to Rule 416, there are also being registered such additional
securities as may become issuable as a result of anti-dilution provisions to
such plans.

<PAGE>
PART I

REOFFER PROSPECTUS OF CONTROL SECURITIES

ITEX CORPORATION
1,264,200 Shares of
Common Stock, $0.01 Par Value

This reoffer prospectus relates to the sale of up to 1,264,200 shares
(the "Shares") of common stock, $0.01 par value per share (the "Common Stock"),
of ITEX Corporation, a Nevada Corporation (the "Registrant" or the "Company"),
issuable upon the exercise of certain outstanding stock options under the
Registrant's 1996 ITEX Corporation Key Employees' Incentive Stock Option Plan,
1997 ITEX Corporation Key Employees' Incentive Stock Option Plan, and 1998 ITEX
Corporation Key Employees' Incentive Stock Option Plan (collectively, the
"Plans"), which may be offered hereby from time to time by any or all of the
selling security holders who are affiliates of the Registrant named herein
(collectively, the "Selling Security Holders"). The Selling Security Holders may
sell the Shares from time to time at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices. See "Selling Security Holders" and "Plan of Distribution" set forth
below. The Registrant will not receive any of the proceeds from the sale of the
Shares.

The Common Stock is listed on the National Association of Securities
Dealers Automated Quotation system, small cap market ("NASDAQ") under the symbol
"ITEX." May 20, 1998, the closing sale price of the Common Stock as reported
by NASDAQ was $3.8125 per share.

The Selling Security Holders and any broker-dealers who participate in
selling the Shares may be deemed "underwriters" as defined by the Securities Act
of 1933, as amended (the "Securities Act"). Commissions paid such
broker-dealers, as well as any profit received on sale of the Shares by
broker-dealers purchasing for their own accounts may be deemed to be
underwriting discounts and commissions. The Selling Security Holders or
purchasers of the Shares will pay all discounts, commissions and fees related to
the sale of the Shares. The Registrant has paid the costs of filing this
registration statement and reoffer prospectus (this "Prospectus") with the
Securities and Exchange Commission (the "Commission") and will pay the costs of
registering or qualifying the Shares under the securities laws of any
jurisdiction where such registration or qualification is necessary.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

PURCHASE OF THESE SECURITIES INVOLVES SUBSTANTIAL RISK. SEE "RISK
FACTORS."

No person has been authorized in connection with any offering made
hereby to give any information or to make any representation not contained in
this Prospectus. If any such information is given or any such representation
made, the information or representation should not be relied upon as having been
authorized by the Registrant. This Prospectus is not an offer to sell or a
solicitation of an offer to buy any securities other than the Shares offered by
this Prospectus, nor is it an offer to sell or a solicitation of an offer to buy
any of the Shares offered hereby in any jurisdiction where it is unlawful to
make such an offer or solicitation. Neither the delivery of this Prospectus nor
any sale hereunder shall

<PAGE>
under any circumstances imply that the information in this Prospectus is correct
any time subsequent to May 21, 1998, the date of this Prospectus.

The date of this Prospectus is May 21, 1998.

AVAILABLE INFORMATION

The Registrant is subject to the informational requirement of the
Securities Exchange Act of 1934, as amended, (the "Exchange Act") and in
accordance therewith files reports and other information with the Commission.
Such reports, proxy statements and other information filed by the Registrant can
be inspected and copied at the public reference facilities maintained by the
Commission in Washington D.C. at 450 Fifth Street, N.W., 20549, and at the
following regional offices located at 26 Federal Plaza, Room 1100, New York, New
York 10278; 219 Dearborn Street, Room 1228, Chicago, Illinois, 60604; and at 410
Seventeenth Street, Suite 700, Denver, Colorado 80202. Copies of these materials
can be obtained from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. Registrant is an
electronic filer and the Commission maintains a Web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically, the address of which is http://www.sec.gov. The Common
Stock of the Company is quoted on the Nasdaq Small Cap Market under the ticker
symbol "ITEX." Reports, proxy statements and information statements and other
information concerning the Registrant may be inspected at the offices of the
National Association of Securities Dealers, Inc. located at 1735 K Street, N.W.,
Washington D.C. 20006.

The Registrant will provide, without charge, to each person to whom a
copy of this Prospectus is delivered, upon the oral or written request of such
person, a copy of any and all information incorporated by reference into this
Prospectus. Requests for such information may be directed to Donovan C. Snyder
at 10300 S.W. Greenburg Road, Suite 370, Portland, Oregon 97223. The Registrant
intends to furnish annual reports to its stockholders, which reports will
contain financial statements audited by independent accountants, and such other
reports as it may determine to furnish or as may be required by law.

<PAGE>
TABLE OF CONTENTS

Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Selling Security Holders . . . . . . . . . . . . . . . . . . . . . . . . 7

Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Material Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Interests of Named Experts and Counsel . . . . . . . . . . . . . . . . . 9

Incorporation of Certain Documents by Reference . . . . . . . . . . . . 9

Commission's Position on Indemnification for Securities Liability . . . 10

<PAGE>
The mailing address of the Registrant's executive offices is 10300 S.
W. Greenburg Road, Suite 370, Portland, Oregon 97223. The telephone number at
the Registrant's executive offices is (503) 244-4673.

RISK FACTORS

The Shares offered hereby are speculative and involve a high degree of
risk. Accordingly, in analyzing this offering, prospective investors should
carefully consider the following factors, among others, relating to the
Registrant:

Shares Eligible for Future Sale. On the date of this Prospectus,
1,139,845 of the currently outstanding shares of Common Stock, excluding the
Shares offered hereby, are restricted securities or held by affiliates of the
Registrant, or both. Consequently, those shares may be sold without registration
only upon Compliance with Rule 144 promulgated under the Securities Act. In
general, Rule 144 provides that a person who has held restricted securities for
one year may sell those securities in limited amounts of those securities under
certain conditions. During any three month period, such persons may sell an
amount of securities not exceeding the greater of one percent of the outstanding
Common Stock or the average weekly trading volume during the four weeks prior to
the sale. Persons who are not affiliates of the Registrant and have held
restricted securities for two years are not subject to these volume limitations.
Sales of substantial amounts of Common Stock by security holders under Rule 144
or otherwise, or even the potential for such sales, might depress the price for
Common Stock and could impair the Registrant's ability to raise capital through
the sale of its equity securities. See also "Volatility of Stock Price" in this
section.

Competition. The trade exchange industry in which the Registrant
competes is fragmented and highly competitive. Although the Registrant believes
it is the largest trade exchange in the United States (calculated either in
terms of broker offices, customers, trade volume or service fees billed)
reliable financial comparisons of industry participants are not available.
Therefore, the Registrant could have competitors with greater financial,
marketing or other resources. Also, because the industry is growing rapidly, no
assurances can be given that new firms with greater financial resources will not
enter the market. The Registrant can give no assurances that present or future
competitors will not develop new or enhanced services that are perceived to be
superior to the Registrant's. No assurances can be given that the Registrant
will continue to be able to compete with present or future competitors.

No Dividends. The Registrant has not paid dividends on its Common Stock
since its inception and does not intend to pay any dividends to stockholders in
the foreseeable future. Management intends to reinvest future profits, if any,
to develop and expand the business.

Expansion into New Markets. The Registrant plans to expand into new
geographic markets and increase its presence in those markets where it is less
established. Management's expansion plan centers around acquiring other trade
exchanges in select geographic markets. Management hopes to finance these
acquisitions primarily with the Registrant's equity securities. Although
management believes its acquisition policy has been successful to date, the
Registrant can give no assurances that such policy will result in any beneficial
acquisitions. In addition, no assurances are given that any trade exchanges the
Registrant acquires will improve the Registrant's financial condition and
results of operations.

Volatility of Stock Price. The Common Stock has been listed on the
NASDAQ Small-Cap market since April 18, 1994. Since that time, the bid price of
the Common Stock has been very volatile, ranging from $1.875 to $12.500. Various
events and factors may have a significant impact on the price of the

<PAGE>
Common Stock and the Registrant's business. Such events and factors could
include future announcements of technological developments, new services and
acquisitions by the Registrant or its competitors, publicity on potential or
actual financial results of the Registrant or its competitors, and economic and
other external factors. In addition, the stock market has from time to time
experienced significant price and volume fluctuations that are unrelated to the
operating performance of any particular company.

Substantial Options, Warrants and Shares Reserved. As of the date of
this Prospectus the Registrant had granted options and warrants to purchase
about 3,963,278 shares of Common Stock. Sales of substantial amounts of the
Common Stock subject to these options and warrants could adversely affect the
price for Common Stock. Such sales, or the possibility for such sales, could in
turn impact the Registrant's ability to raise capital through the sale of its
equity securities. The outstanding options and warrants are described in the
paragraphs below and elsewhere in this Prospectus, including the information
incorporated herein by reference. See "MATERIAL CHANGES" and "INCORPORATION OF
CERTAIN INFORMATION BY REFERENCE."

The Registrant has adopted a key employees' incentive stock option plan
for 1994 (the "1994 Plan"). The 1994 Plan granted options to purchase 305,000
shares of Common Stock at an exercise price of $1.00 per share and an expiration
date of April 19, 2003, of which, options to purchase 32,000 options remain
outstanding. The 1994 Plan also granted options to purchase 460,000 shares of
Common Stock at an exercise price of $1.94 per share and an expiration date of
October 26, 2004, of which, options to purchase 199,800 shares remain
outstanding. The 1994 Plan also granted options to purchase 100,000 shares of
Common Stock at an exercise price of $2.00 per share and an expiration date of
December 1, 2004, all of which have been exercised. The 1994 Plan also granted
options to purchase 20,000 shares of Common Stock at an exercise price of $2.50
per share and an expiration date of January 10, 2005, all of which have been
exercised. The 1994 Plan also granted options to purchase 150,000 shares of
Common Stock at an exercise price of $2.50 per share and an expiration date of
February 10, 2005, of which, options to purchase 60,000 shares remain
outstanding. Finally, the 1994 Plan granted options to purchase 203,000 shares
of Common Stock at an exercise price of $3.38 per share and an expiration date
of February 11, 2004, of which, options to purchase 133,000 shares remain
outstanding.

The Registrant has adopted a key employees' incentive stock option plan
for 1996, 1997, and 1998 (the "Plans"). The Plans give the board of directors
discretion to grant options to the Registrant's employees, officers, directors,
and certain consultants or advisors, to purchase shares of Common Stock . The
Plans are intended to meet the requirements of section 422 of the Internal
Revenue Code of 1986, as amended. Options under the Plans may be exercised at
strike prices which in most cases are equal to the market value of the Common
Stock on the date the options were granted. As amended, there are 2,970,00
shares of Common Stock subject to the Plans. The Registrant either has granted
or may grant options to purchase 1,250,000 shares at $6.125 per share and an
expiration date of December 15, 2000, options to purchase 755,000 shares at
$3.75 per share and an expiration date of December 27, 2006, and options to
purchase 965,000 shares at $3.1875 per share and an expiration date of September
3, 2007. All options granted under the aforementioned Plans are still
outstanding. The number of shares subject to the Plans may not be increased
without approval from the holders of the Registrant's voting securities but may
be adjusted upon the occurrence of certain events, including, but not limited
to, stock splits, combinations of shares, recapitalization, or corporate
reorganizations.

The Registrant granted warrants for the purchase of 600,000 shares of
Common Stock to Inventory Merchandising Services, Inc., a Texas corporation
("IMS"). The Registrant granted these warrants as consideration for a marketing
agreement pursuant to which IMS served as a marketing agent to the Registrant's
travel department. These warrants have an exercise price of $3.83 per share.
Each warrant

<PAGE>
entitles IMS to purchase 300,000 shares. The warrants expire on July 31, 1998.
In connection with a private placement, the Registrant has also granted a
warrant for the purchase of 55,000 shares of Common Stock to New Horizons, L.P.
If exercised prior to June 19, 1999, the exercise price will be $3.25 per share.
If exercised between June 20, 1999 and June 19, 2000, the exercise price will be
$4.00 per share. The warrants expire on June 19, 2000. In connection with a
settlement agreement, the Registrant has granted an option to purchase up to
20,000 shares of Common Stock to IBTEX A.G., a Liberian Corporation. The option
has an exercise price of $3.50 per share and has an expiration date of December
31, 2001. In connection with a settlement agreement, the Registrant has granted
an option to purchase up to 200,000 shares of Common Stock to Martin Kagan. The
option has an exercise price of $3.50 per share and has an expiration date of
December 31, 2001.

USE OF PROCEEDS

This section is not applicable because the Registrant will not receive any
proceeds from the sale of shares of Common Stock by the Selling Security Holders
hereunder. See "Selling Security Holders" and "Plan of Distribution."

DETERMINATION OF OFFERING PRICE

The Selling Security Holders may sell the Shares from time to time in the
over-the-counter market, or otherwise, at prices and terms then prevailing or at
prices related to the then current market price, or in negotiated transactions.
See "Selling Security Holders" and "Plan of Distribution."

DILUTION

Not applicable.

SELLING SECURITY HOLDERS

The Selling Security Holders are offering shares which will be issued
by the Registrant pursuant to the Plans. The following table sets forth certain
information with respect to the Selling Security Holders as of May 21, 1998:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Name Number of Shares Number of Shares Number of Sharers Beneficially Owned Upon
Beneficially owned(1) Offered Completion of Offering(1)(2)
- --------------------------------------------------------------------------------------------------------------------
Number Percent
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Graham Norris, Sr.,(3) 587,106 509,000 78,106 *
- --------------------------------------------------------------------------------------------------------------------
Mary Scherr(4) 216,500 203,400 13,100 *
- --------------------------------------------------------------------------------------------------------------------
Joseph Morris(5) 199,500 196,000 3,500 *
- --------------------------------------------------------------------------------------------------------------------
Dr. Charles Padbury(6) 88,055 73,000 15,055 *
- --------------------------------------------------------------------------------------------------------------------
Robert Nelson(6) 62,547 60,000 2,547 *
- --------------------------------------------------------------------------------------------------------------------
Dr. Evan B. Ames(6) 62,500 60,000 2,500 *
- --------------------------------------------------------------------------------------------------------------------

<PAGE>
Donovan C. Snyder(7) 38,800 37,800 1,000 *
- --------------------------------------------------------------------------------------------------------------------
Gerald Pitts(8) 75,000 75,000 -0- *
- --------------------------------------------------------------------------------------------------------------------
Edward S. Wittman(8) 50,000 50,000 -0- *
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
* Less than 1% of the outstanding Common Stock

(1) Includes shares of Common Stock owned by the Selling Security
Holders and shares of Common Stock that the Selling Security Holders may acquire
within 60 days of the date of this Prospectus by exercising options or
otherwise.

(2) Assumes all Shares Offered will be sold. The number of shares of
Common Stock issued and outstanding on February 12, 1998 was 11,401,845 shares
(7,438,567 shares issued, 3,963,278 stock options and warrants).

(3) Chairman of the Board and the President of the Registrant.

(4) Director and a Vice President.

(5) Director, Senior Vice President and Chief Financial Officer.

(6) Director of the Registrant.

(7) Secretary and Corporate Counsel for the Registrant.

(8) Vice President

PLAN OF DISTRIBUTION

The Selling Security Holders may sell the Shares from time to time in
the NASDAQ Stock Market, or otherwise, at prices and terms then prevailing or at
prices related to the then current market price, or in negotiated transactions.
The Selling Security Holders expect to employ brokers or dealers in order to
sell the Shares. Brokers or dealers engaged by the Selling Security Holders may
arrange for other brokers or dealers to participate. Brokers or dealers will
receive commissions from the Selling Security Holders or from purchasers in
amounts to be negotiated immediately prior to the sale, which commissions are
not expected to deviate from usual and customary brokers' commissions.

Neither the Registrant or Selling Security Holders expect to employ,
utilize or otherwise engage any finders to assist in the sales of the Shares.

The amount of Shares which may be offered or sold pursuant to this
Prospectus by the Selling Security Holders, and any other person with whom they
are acting in concert for the purpose of selling securities of the Registrant,
may not exceed, during any three month period, the amount specified in Rule
144(e) promulgated under the Securities Act.

There is no assurance that the Selling Security Holders will offer for
sale or sell any or all of the Shares registered pursuant to this Prospectus.

DESCRIPTION OF SECURITIES TO BE REGISTERED

<PAGE>
Not applicable.

INTERESTS OF NAMED EXPERTS AND COUNSEL

No expert or counsel for the Company named in this registration
statement as having prepared or certified any part hereof or as giving an
opinion as to the validity of the securities being registered was employed on a
contingency basis, or has or is to receive, in connection with the offering, a
substantial interest, direct or indirect, in the Company or its subsidiaries. No
such expert is connected with the Company or its subsidiaries as a promoter,
managing underwriter, voting trustee, director or officer. Donovan Snyder, Esq.,
who is named in this registration statement as having given an opinion as to the
validity of the securities being registered, is employed by the Company as its
corporate counsel. Mr. Snyder is the Secretary of the Company. Mr. Snyder is not
connected with the Company or its subsidiaries as a promoter, managing
underwriter, voting trustee, or director.

MATERIAL CHANGES

Not applicable.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

The following documents that the Registrant filed with the Commission
are hereby incorporated by reference into this Prospectus:

1. The Company's annual report on Form 10-K for the fiscal year ended
July 31, 1997, which contains financial statements of the Registrant for that
fiscal year;

2. The Company's report on Form 10-Q for the quarterly period ended
November 20, 1997;

3. The Company's report on Form 10-Q for the quarterly period ended
February 12, 1998;

4. The Company's reports on Form 8-K dated October 23, 1997; February
20, 1998; April 17, 1998; and April 27, 1998;

5. All subsequent reports that the Company files with the Commission
pursuant to sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), since the end of the fiscal year ended July 31,
1997;

6. The Specimen Common Stock certificate contained in the Company's S-8
Registration Statement filed August 24, 1995; and

7. The description of the Common Stock contained in the Company's
registration statement filed under the Exchange Act on Form 10, filed on or
about May 17, 1990, including any amendment or report filed for the purpose of
updating such description.

Prior to the filing of a post-effective amendment indicating that all
securities covered by this registration statement have been sold or that
de-registers all securities then remaining unsold, all reports and other
documents the Company subsequently files pursuant to Sections 13(a), 13(c), 14,
or 15(d) of the Exchange Act shall be deemed to be incorporated by reference in
this Registration Statement and will be a part hereof from the date of the
filing of such reports and documents.

9
<PAGE>
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITY

Under Nevada Revised Statutes ("N.R.S.") section 78.751(3) Nevada
corporations must indemnify directors, officers, employees or agents who are
parties to legal actions by reason of their positions with the corporation to
the extent they are successful in defense of any claim, issue or matter therein.
This mandatory indemnification applies to expenses actually and reasonably
incurred defending the action, including attorneys' fees.

Nevada law permits corporations to indemnify a director, officer,
employee or agent in situations where indemnification is not mandatory provided
the officer or director satisfies certain statutory standards of conduct and
indemnification is proper under the circumstances. The standard of conduct
required and level of indemnification permitted depend on whether the action,
proceeding or suit is civil or criminal and whether it is maintained by or in
the right of the corporation. In actions other than those by or in the right of
the corporation, N.R.S. section 78.751(1) permits a corporation to indemnify
directors or officers against actual and reasonable expenses, including
attorneys fees, judgments, fines and settlement payments. In civil cases the
officer or director meets the applicable standard of conduct if he or she acted
in good faith and in a manner he or she reasonably believed to be in or not
opposed to the best interests of the corporation. In criminal cases, an officer
or director meets the standard of conduct if he or she had no reasonable cause
to believe his or her conduct was unlawful.

In actions by or in the right of the corporation, N.R.S. section
78.751(2) provides that a corporation may indemnify an officer or director
against actual and reasonable expenses, including attorneys' fees and settlement
payments, provided the officer or director acted in good faith and in a manner
he or she reasonably believed to be in or not opposed to the best interests of
the corporation and indemnification is proper under the circumstances. A Nevada
corporation cannot indemnify a director, officer, employee or agent adjudged
liable to the corporation on any claim, issue or matter unless, and to the
extent, the court determines that despite the adjudication of liability, and in
light of all the circumstances, the person is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper.

In all cases, except those in which a court orders indemnification or
the Registrant advances expenses pursuant to N.R.S. section 78.751(5), the
determination of whether indemnification is proper under the circumstances must
be made by the stockholders, by a quorum of disinterested directors, or, in
certain situations, by independent legal counsel.

Under N.R.S. section 78.715(5), a Nevada corporation may provide,
either in its articles, bylaws or agreements, that the corporation will pay
officers' and directors' defense expenses as they are incurred and prior to a
final disposition. Such provisions must make advancement contingent upon the
corporation's receipt of an undertaking by or on behalf of the director or
officer to repay advancements if a court of competent jurisdiction ultimately
determines that the officer or director is not entitled to indemnification.
Section 78.715(5) does not affect advancement rights to which corporate
personnel other than directors and officers may be entitled under contract or
otherwise by law.

Nevada law does not exclude other indemnification or advancement rights
to which a person may be entitled under the articles of incorporation, the
bylaws, an agreement, a vote of shareholders or disinterested directors, or
otherwise. In pertinent part, N.R.S. Section 78.037 (1993) provides that a
Nevada corporation's articles of incorporation may contain:

<PAGE>
[a] provision eliminating or limiting the personal liability of a
director or officer to the corporation or its stockholders for damages
for breach of fiduciary duty as a director or officer, but such a
provision must not eliminate or limit the liability of a director or
officer for:

(a) [a]cts or omissions which involve intentional misconduct,
fraud or a knowing violation of law; or
(b) [t]he payment of distributions in violation of NRS 78.300.

In addition, unless ordered to do so by a court of competent
jurisdiction, a corporation cannot indemnify an officer director or advance
payment to or behalf of an officer or director (except pursuant to section
78.715(5)) if a final adjudication establishes the officer's or director's acts
or omissions involved intentional misconduct, fraud or known violation of the
law and were material to the cause of action.

Article XII of the Registrant's By-Laws provides that the corporation
may indemnify past or present officers, directors, agents or employees against
expenses incurred, judgments entered or penalties levied in legal actions
brought against such persons for acts or omissions alleged to have been
committed by such persons while they were serving the Registrant. However, the
Registrant can grant indemnity only if the board of directors determines that
the person did not act, fail to act, or refuse to act willfully, with gross
negligence, with fraudulent intent or with criminal intent. The term "expenses"
includes all obligations for payment of money, including, without limitation,
legal fees and settlements. Judgments or convictions are not conclusive on the
issue of whether the person acted, failed to act or refused to act willfully,
with gross negligence, with fraudulent intent or with criminal intent. A
majority of a quorum of the board of directors, excluding directors who have
incurred judgments, penalties or expenses in the action in question, shall make
all decisions regarding indemnity. If a quorum of non-excluded directors cannot
be obtained, the majority vote of a committee consisting of non-excluded
directors and stockholders appointed by the entire board of directors shall
decide indemnity questions. The indemnity provisions of Article XII extend to
the member of such a committee. Article XII does not exclude other indemnity
rights.

The foregoing discussion of indemnification merely summarizes certain
aspects of indemnification provisions and is limited by reference to Nevada
Revised Statutes (1993) and Article XII of the Corporation's By-Laws, as
amended.

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to members of the board of directors, officers, employees,
or persons controlling the Registrant pursuant to the foregoing provisions, the
Registrant has been informed that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.

In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.

<PAGE>
PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3. Incorporation of Documents by Reference

The following documents filed by ITEX Corporation, a Nevada
corporation, (the "Company") with the Securities and Exchange Commission (the
"Commission") are incorporated by reference in this registration statement:

1. The Company's Annual Report on Form 10-K for the fiscal year
ended July 31, 1997;

2. The Company's report on Form 10-Q for the quarterly period
ended November 20, 1997;

3. The Company's report on Form 10-Q for the quarterly period
ended February 12, 1998;

4. The Company's reports on Form 8-K dated October 23, 1997; February
20, 1998; April 17, 1998; and April 27, 1998;

5. All subsequent reports that the Company files with the
Commission pursuant to sections 13(a) or 15(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), since the end of the fiscal year ended
July 31, 1997;

6. The Specimen Common Stock certificate contained in the Company's
S-8 Registration Statement filed August 24, 1995; and

Item 4. Description of Securities

The common stock of the Company being registered pursuant to this
registration statement is part of a class of securities registered under section
12 of the Exchange Act. A description of such securities is contained in a
registration statement filed under the Exchange Act and is incorporated herein
by reference. (See ITEM 3. "INCORPORATION OF DOCUMENTS BY REFERENCE.")

Item 5. Interests of Named Experts and Counsel

No expert or counsel for the Company named in this registration
statement as having prepared or certified any part hereof or as giving an
opinion as to the validity of the securities being registered

<PAGE>
was employed on a contingency basis, or has or is to receive, in connection with
the offering, a substantial interest, direct or indirect, in the Company or its
subsidiaries. No such expert is connected with the Company or its subsidiaries
as a promoter, managing underwriter, voting trustee, director or officer.
Donovan Snyder, Esq., who is named in this registration statement as having
given an opinion as to the validity of the securities being registered, is
employed by the Company as its corporate counsel. Mr. Snyder is the Secretary of
the Company. Mr. Snyder is not connected with the Company or its subsidiaries as
a promoter, managing underwriter, voting trustee, or director.

Item 6. Indemnification of Directors and Officers

Nevada law permits corporations to indemnify a director, officer,
employee or agent in situations where indemnification is not mandatory provided
the individual satisfies certain statutory standards of conduct and
indemnification is proper under the circumstances. The standard of conduct
required and level of indemnification permitted depend on whether the action,
proceeding or suit is civil or criminal and whether it is maintained by or in
the right of the corporation. In actions other than those by or in the right of
the corporation, N.R.S. section 78.751(1) permits a corporation to indemnify
directors or officers against actual and reasonable expenses, including
attorneys fees, judgments, fines and settlement payments. In civil cases the
officer or director meets the applicable standard of conduct if he or she acted
in good faith and in a manner he or she reasonably believed to be in or not
opposed to the best interests of the corporation. In criminal cases, an officer
or director meets the standard of conduct if he or she had no reasonable cause
to believe his or her conduct was unlawful.

In actions by or in the right of the corporation, N.R.S. section
78.751(2) provides that a corporation may indemnify an officer or director
against actual and reasonable expenses, including attorneys' fees and settlement
payments. However, indemnification is permitted only if the officer or director
acted in good faith and in a manner he or she reasonably believed to be in or
not opposed to the best interests of the corporation and indemnification is
proper under the circumstances. A Nevada corporation cannot indemnify a
director, officer, employee or agent adjudged liable to the corporation on any
claim, issue or matter unless, and to the extent, the court determines that
despite the adjudication of liability, and in light of all the circumstances,
the person is fairly and reasonably entitled to indemnity for such expenses as
the court deems proper.

In all cases, except those in which a court orders indemnification or
the Company advances expenses pursuant to N.R.S. section 78.751(5), the
determination of whether indemnification is proper under the circumstances must
be made by the stockholders, by a quorum of disinterested directors, or, in
certain situations, by independent legal counsel.

Under N.R.S. section 78.715(5), a Nevada corporation may provide,
either in its articles of incorporation, bylaws or agreements, that the
corporation will pay officers' and directors' defense expenses as they are
incurred and prior to a final disposition. Such provisions must make advancement
contingent upon the corporation's receipt of an undertaking by or on behalf of
the director or officer to repay advancements if a court of competent
jurisdiction ultimately determines that the officer or

<PAGE>
director is not entitled to indemnification. Section 78.715(5) does not affect
advancement rights to which corporate personnel other than directors and
officers may be entitled under contract or otherwise by law.

[a] provision eliminating or limiting the personal liability of a
director or officer to the corporation or its stockholders for damages
for breach of fiduciary duty as a director or officer, but such a
provision must not eliminate or limit the liability of a director or
officer for:

(a) [a]cts or omissions which involve intentional misconduct,
fraud or a knowing violation of law; or
(b) [t]he payment of distributions in violation of NRS 78.300.

In addition, unless ordered to do so by a court of competent
jurisdiction, a corporation cannot indemnify an officer director or advance
payment to or on behalf of an officer or director (except pursuant to section
78.715(5)) if a final adjudication establishes the officer's or director's acts
or omissions involved intentional misconduct, fraud or known violation of the
law and were material to the cause of action.

Article XII of the Company's By-Laws provides that the corporation may
indemnify past or present officers, directors, agents or employees against
expenses incurred, judgments entered or penalties levied in legal actions
brought against such persons for acts or omissions alleged to have been
committed by such persons while they were serving the Company. However, the
Company can grant indemnity only if the board of directors determines that the
person did not act, fail to act, or refuse to act willfully, with gross
negligence, with fraudulent intent or with criminal intent. The term "expenses"
includes all obligations for payment of money, including, without limitation,
legal fees and settlements. Judgments or convictions are not conclusive on the
issue of whether the person acted, failed to act or refused to act willfully,
with gross negligence, with fraudulent intent or with criminal intent. A
majority of a quorum of the board of directors, excluding directors who have
incurred judgments, penalties or expenses in the action in question, shall make
all decisions regarding indemnity. If a quorum of non-excluded directors cannot
be obtained, the majority vote of a committee consisting of non-excluded
directors and stockholders appointed by the entire board of directors shall
decide indemnity questions. The indemnity provisions of Article XII extend to
the member of such a committee. Article XII does not exclude other indemnity
rights.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Securities Act") may be permitted to directors, officers, and
controlling persons of the Company pursuant to the foregoing provisions, or
otherwise, the Company has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable.

<PAGE>
Item 7. Exemption from Registration Claimed

No restricted securities are being registered.

Item 8. Exhibits.
The following exhibits are attached to this Registration Statement:

SEC Ref. No. Exhibit No. Description of Exhibit
- ------------ ----------- ----------------------
4 4.1 Specimen Common Stock certificate (included
in the Company's S-8 Registration Statement
filed August 24, 1995 and incorporated by
reference)

4 4.2 ITEX Corporation Key Employees' Incentive
Stock Option Plan, adopted December 15,
1995

4 4.3 ITEX Corporation Key Employees' Incentive
Stock Option Plan, adopted December 27,
1996

4 4.4 ITEX Corporation Key Employees' Incentive
Stock Option Plan, adopted September 3,
1997

5 5.1 Opinion of Donovan Snyder, Esq. with
respect to the legality of the issuance of
securities being issued

23 23.1 Consent of Anderson, Anderson & Strong,
certified public accountants

23 Consent of Counsel (included in Exhibit
5.1, above)

Item 9. Undertakings

(a) The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.

(b) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or

<PAGE>
otherwise, the Company has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable.

In the event that a claim for indemnification against such liabilities
(other than the payment by the Company of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Tigard, State of Oregon, on April , 1998.

ITEX Corporation

By
----------------------
Graham H. Norris, Sr.,
President and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Donovan C. Snyder, with power of
substitution, as his attorney-in-fact for him, in all capacities, to sign any
amendments to this registration statement and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that said
attorney-in-fact or his substitutes may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.

Signature Title
Date

- ---------------------------- President, Chief Executive May 21, 1998
Graham H. Norris, Sr. Officer, Chairman of the
Board of Directors

- ---------------------------- Director May 21, 1998
Ronald P. Erickson

- ---------------------------- Director May 21, 1998

<PAGE>
Mary Scherr

- ---------------------------- Director May 21, 1998
Dr. Charles Padbury

- ---------------------------- Director May 21, 1998
Robert Nelson

- ---------------------------- Director, Senior Vice President May 21, 1998
Joseph M. Morris and Chief Financial Officer

- ---------------------------- Director May 21, 1998
Evan Ames

- ---------------------------- Director May 21, 1998
G. Dale Weight

17
<PAGE>
As filed with the Securities and Exchange Commission on May 21, 1998.
File No.

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

EXHIBITS

FORM S-8

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

ITEX Corporation
(A Nevada Corporation)

<PAGE>
<TABLE>
<CAPTION>
INDEX TO EXHIBITS
Sequentially
SEC Ref. No. Exhibit Description of Exhibit Numbered Pages
No. Number ---------------------- --------------
--- ------
<S> <C> <C>
4 4.1 Specimen Common Stock certificate Included in the Company's
S-8 Registration Statement
filed August 24, 1995 and
incorporated by reference

4 4.2 ITEX Corporation Key Employees' Incentive Stock 20-
Option Plan, adopted December 15, 1995

4 4.3 ITEX Corporation Key Employees' Incentive Stock
Option Plan, adopted December 27, 1996

4 4.4 ITEX Corporation Key Employees' Incentive Stock
Option Plan, adopted September 3, 1997

5 5.1 Opinion of Counsel with respect to the legality of
the issuance of securities being issued

23 23.1 Consent of independent certified public accountants

23 23.2 Consent of counsel (included in Exhibit 5.1,
Opinion of Counsel)
</TABLE>

ITEX CORPORATION Exhibit 4.2
1995-96 KEY EMPLOYEES' INCENTIVE
STOCK OPTION PLAN

SECTION 1. PURPOSE

The continued growth and success of ITEX CORPORATION (the
"Corporation") depend in part on its ability to obtain and retain the services
of key employees of the highest competence, and to provide incentives for the
effective service of high-level performance. The purposes of this Key Employees'
Incentive Stock Option Plan (the "Plan") are to provide a means whereby the
Corporation can continue to attract, motivate, and retain key employees who can
contribute materially to the Corporation's growth and success, and to facilitate
the acquisition of shares of the Corporation's common stock, par value $0.01 per
share (the "Stock") by key employees pursuant to the options meeting the
requirements of IRC ss. 422, so that such key employees will more closely
identify their interests with those of the Corporation and its shareholders.

SECTION 2. STOCK

The Stock subject to options under the Plan shall be shares of the
Corporation's authorized but unissued or reacquired Stock. Subject to the
adjustments described in Section 6 of the Plan, the aggregate number of shares
that may be issued pursuant the to the Plan shall not exceed 1,250,000 shares.
In the event that any outstanding option granted under the Plan for any reason
expires or is terminated, the shares of Stock allocable to the unexercised
portion of such option may again be subjected to the grant of options under the
Plan.

SECTION 3. ELIGIBILITY

The individuals who may participate in this Plan are employees of the
Corporation and its subsidiaries, including officers and directors, non-employee
directors and other individuals who are not employees of the Corporation,
including consultants and advisors; provided however, consultants and advisors
may participate only if they render bona fide services to the Corporation that
are not in connection with the offer or sale of securities in a capital-raising
transaction. The stock option committee (the "Committee") of the Corporation's
board of directors (the "Board") or the non-employee directors of the Board (if
no such committee is in place) may determine from time to time which eligible
individuals will participate in the Plan. No otherwise eligible individual shall
have any right to participate in this Plan unless designated by the Committee or
the Board. Participants shall receive options to purchase Stock subject to the
provisions of this Plan and, to the extent not inconsistent with this Plan, the
terms of his or her stock option agreement.

SECTION 4. EMPLOYEE AND CONSULTANTS OPTIONS

Employees of the Corporation and its subsidiaries, including officers
and directors and other individuals who are not employees of the Corporation,
including consultants and advisors shall be granted such options as may be
determined by the Committee or the non-employee directors of the Board if no
such committee is in place. Consultants and advisors may participate only if
they render bona fide services to the Corporation that are not in connection
with the offer or sale of securities in a capital-raising transaction.

<PAGE>
SECTION 5. NON-EMPLOYEE DIRECTORS OPTIONS

Awards of stock options to Non-Employee Directors shall be made only
under this Section 5. No perosn, including the members of the Board or the
Committee, shall have any discretion as to the selection of eligible recipients
or the determination of the amount or terms of such awards pursuant to this
Section 5.

5.1 Initial Director Options. Upon the effective date of the Plan the
Non-Employee Directors shall each receive an Initial Option to acquire 10,000
Shares at an exercise price of $6.125 per share which is the Fair Market Value
of a share of the common stock of the Corporation on the Effective Date hereof.
Each person who becomes a Non-Employee Director after the Effective Date shall
be granted an Initial Option to purchase 10,000 Shares, with an exercise price
equal to the Fair Market Value of the Corporation's common stock on the date of
grant.

5.2 Renewal Director Options. Each Non-Employee Director shall be
granted an option to purchase 1,000 Shares for each year of service as a
Non-Employee Director on the December 15 prior to the Annual Meeting of
Shareholders, with an exercise price equal to the Fair Market Value of the
Corporation's common stock on such date.

SECTION 6. ADMINISTRATION

The Board shall administer the Plan. Subject to compliance with
applicable provisions of the governing law, the Board may delegate
administration of the Plan, or specific administrative duties on such terms as
the Board deems proper, to the Committee. The Committee shall be composed of not
less than three members of the Board. The term the "Board" shall be deemed to
replace the term "Committee" until a Committee is duly appointed or, if there is
a vacancy on the Committee, until a replacement or successor director is
appointed and qualified. The Committee shall have full power and authority,
subject to the provisions of the Plan, to:

(1) To determine eligibility to participate in the Plan and designate
participants;

(2) Determine the number of options to be granted to each participant;

(3) Determine the terms of option agreements for each option;

(4) Supervise administration of the Plan;

(5) Interpret the provisions of the Plan and option agreements granted
under it; and

(6) Take all action in connection with the Plan as it deems necessary
or advisable.

Decisions of the Committee shall be final. More than one option may be
granted to the same individual. No member of the Committee or the Board shall be
liable for any action or determination made in good faith with respects to the
Plan or any option granted under it.

SECTION 7. TERMS AND CONDITIONS OF OPTIONS

Options under the Plan granted by the Committee shall be evidenced by
stock option agreements in such form as the Committee shall from time to time
approve, and shall comply with and

<PAGE>
be subject to the following terms and conditions.

7.1 Number of Shares. Each option agreement shall state the number of
shares of Stock subject to the option.

7.2 Option Price. Each option agreement shall state the option price,
which shall be not less than 100% (110% for 10% Shareholders, as defined below)
of the fair market value, on the date the option is granted, of the shares of
Stock subject to the option. A "10% Shareholder" is any person who, at the time
an option is granted, owns stock of the Corporation possessing more than 10% of
the combined voting power of all classes of stock of the Corporation or any
affiliate.

7.3 Determination of Fair Market Value. The fair market value per share
of Stock shall be determined by the Committee in good faith at the time the
option is granted.

7.4 Option Period and Limitations on Exercise. Each option shall expire
and shall not be exercisable after the expiration of 10 years (five years for
10% Shareholders) from the date the option is granted, or such lesser period as
may be established by the Committee at the time the option is granted. Each
option shall be exercisable by the optionee either immediately or after such
period, and according to such schedule for exercise, or in such other manner as
the Committee shall provide in the option agreement at the time the option is
granted.

Notwithstanding any other provision of the Plan, and unless otherwise
resolved by the Committee, options granted to employees of the Corporation under
the Plan shall be exercisable only while the optionee remains an employee of the
Corporation, except that in the event of (1) an optionee's termination of
employment with the Corporation by reason of disability (within the meaning of
IRC ss.22(e)(3), or (2) an optionee's death while an employee of the
Corporation, the option agreement may allow the option to remain exercisable, to
the extent it was exercisable on the date of termination or the date of death,
by the optionee or the estate or devisee of the decedent, until the expiration
date of the term of the option or one year after the date of the optionee's
termination of employment or death, whichever date is earlier.

7.5 Securities Restrictions. All option agreements evidencing options
granted under the Plan shall provide that:

(1) If the Committee at any time determines that registration or
qualification of the Stock or any option under state or federal law or the
consent or approval of any governmental regulatory body, is necessary or
desirable, then the option may be not be exercised, in whole or in part, until
that registration, qualification, consent, or approval shall have been effected
or obtained free of any conditions not acceptable to the Committee.

(2) Any person exercising an option to purchase shares of Stock may be
required by the Corporation to give a written representation that he or she is
acquiring the shares for his or her own account for investment and not with a
view to the distribution of the shares.

7.6 Payment of Purchase Price. The option price upon exercise of an
option under the plan shall be payable to the Corporation in cash or, in the
discretion of the Committee, in installments or terms and over periods as the
Committee shall determine.

<PAGE>
7.7 Nontransferability. Options shall not be transferable except by
testamentary will or the laws of descent and distribution, and shall be
exercisable during an optionee's lifetime only be the optionee.

7.8 Other Provisions. Any option agreement may contain other or
additional terms and provisions as may be determined by the Committee to be
consistent with the Plan, or necessary or desirable to comply with the
provisions of applicable laws, rules, or regulations.

SECTION 8. ADJUSTMENT

In the event of any stock split or payment of a dividend on Stock
payable in shares of Stock after or at the same time the Plan is approved by the
Corporation's shareholders, the shares of Stock then subject to each option (and
the number of such shares which, pursuant to Section 2 of the Plan, may be
issued under the Plan) shall be increased proportionately without any change in
their aggregate purchase price. In the event all the outstanding shares of Stock
shall be changed into or exchanged for a different number or class of shares of
the corporation, or of another corporation, whether through reorganization,
recapitalization, stock split-up, combination of shares, merger, consolidation,
or otherwise, then there shall be substituted for each share of Stock then
subject to each option (and if the Corporation is the surviving corporation in
such transaction, for the number of shares which, pursuant to Section 2 of the
Plan, may be issued under the Plan), the number and class of shares into which
each outstanding share of Stock shall be so exchanged, all without any change in
the aggregate option price for the shares then subject to option. In connection
with any adjustment under this Section 8 resulting in a fractional share
interest, the interest may be rounded down to the nearest whole share if the
interest is less than 0.5 share; otherwise, the fractional share interest may be
rounded up to the nearest whole share.

SECTION 9. PROCEEDS

The proceeds received by the Corporation from the sale of Stock
pursuant to the Plan will be used for general corporate purposes.

SECTION 10. OBLIGATION TO EXERCISE; RIGHT TO CONTINUED EMPLOYMENT

The granting of an option shall impose no obligation on the optionee to
exercise the option. The granting of an option does not confer any right to be
continued in the employment of the Corporation.

SECTION 11. AMENDMENT AND DISCONTINUANCE

The Board may alter, amend, suspend, or terminate the Plan, provided
that the Board may not, without further approval by the holders of a majority of
the outstanding shares of stock of the Corporation entitled to vote:

(1) Increase the aggregate number of shares of Stock for which options
may be granted under the Plan (except for adjustments pursuant to Section 6);

(2) Decrease the option price at which stock may be offered;

(3) Materially modify the requirements as to eligibility for
participation in the Plan; or

<PAGE>
(4) Alter or impair, without the optionee's consent, the rights or
obligations under any option previously granted pursuant to the Plan.

SECTION 12. TERM OF PLAN AND EFFECTIVE DATE

The Plan shall become effective on the date the Plan is approved by the
Board.

Options may be granted pursuant to the Plan from time to time within 10
years after the plan becomes effective.

AS ADOPTED BY THE BOARD OF DIRECTORS OF ITEX CORPORATION EFFECTIVE THE 15th DAY
OF DECEMBER, 1995 PURSUANT TO SECTION 12 HEREOF, AND AS APPROVED BY THE
SHAREHOLDERS OF ITEX CORPORATION ON THE 9th DAY OF MAY, 1997.

/s/ Graham H. Norris
- -----------------------------------
Graham H. Norris, President and CEO

ITEX CORPORATION Exhibit 4.3
1996-97 KEY EMPLOYEES' INCENTIVE
STOCK OPTION PLAN

SECTION 1. PURPOSE

SECTION 2. STOCK

The Stock subject to options under the Plan shall be shares of the
Corporation's authorized but unissued or reacquired Stock. Subject to the
adjustments described in Section 6 of the Plan, the aggregate number of shares
that may be issued pursuant the to the Plan shall not exceed 1,000,000 shares.
In the event that any outstanding option granted under the Plan for any reason
expires or is terminated, the shares of Stock allocable to the unexercised
portion of such option may again be subjected to the grant of options under the
Plan.

SECTION 3. ELIGIBILITY

SECTION 4. EMPLOYEE AND CONSULTANTS OPTIONS

<PAGE>
SECTION 5. NON-EMPLOYEE DIRECTORS OPTIONS

SECTION 6. ADMINISTRATION

(1) To determine eligibility to participate in the Plan and designate
participants;

(2) Determine the number of options to be granted to each participant;

(3) Determine the terms of option agreements for each option;

(4) Supervise administration of the Plan;

(5) Interpret the provisions of the Plan and option agreements granted
under it; and

(6) Take all action in connection with the Plan as it deems necessary
or advisable.

SECTION 7. TERMS AND CONDITIONS OF OPTIONS

Options under the Plan granted by the Committee shall be evidenced by
stock option agreements in such form as the Committee shall from time to time
approve, and shall comply with

<PAGE>
and be subject to the following terms and conditions.

7.1 Number of Shares. Each option agreement shall state the number of
shares of Stock subject to the option.

7.3 Determination of Fair Market Value. The fair market value per share
of Stock shall be determined by the Committee in good faith at the time the
option is granted.

7.5 Securities Restrictions. All option agreements evidencing options
granted under the Plan shall provide that:

SECTION 8. ADJUSTMENT

SECTION 9. PROCEEDS

The proceeds received by the Corporation from the sale of Stock
pursuant to the Plan will be used for general corporate purposes.

SECTION 10. OBLIGATION TO EXERCISE; RIGHT TO CONTINUED EMPLOYMENT

The granting of an option shall impose no obligation on the optionee to
exercise the option. The granting of an option does not confer any right to be
continued in the employment of the Corporation.

SECTION 11. AMENDMENT AND DISCONTINUANCE

(1) Increase the aggregate number of shares of Stock for which options
may be granted under the Plan (except for adjustments pursuant to Section 6);

(2) Decrease the option price at which stock may be offered;

(3) Materially modify the requirements as to eligibility for
participation in the Plan; or

<PAGE>
(4) Alter or impair, without the optionee's consent, the rights or
obligations under any option previously granted pursuant to the Plan.

SECTION 12. TERM OF PLAN AND EFFECTIVE DATE

The Plan shall become effective on the date the Plan is approved by the
Board.

Options may be granted pursuant to the Plan from time to time within 10
years after the plan becomes effective.

AS ADOPTED BY THE BOARD OF DIRECTORS OF ITEX CORPORATION EFFECTIVE THE 27th DAY
OF DECEMBER, 1996 PURSUANT TO SECTION 12 HEREOF, AND AS APPROVED BY THE
SHAREHOLDERS OF ITEX CORPORATION ON THE 9th DAY OF FEBRUARY, 1998.

/s/ Graham H. Norris
- -----------------------------------
Graham H. Norris, President and CEO

1997-98 KEY EMPLOYEES' INCENTIVE Exhibit 4.4
STOCK OPTION PLAN

SECTION 1. PURPOSE

SECTION 2. STOCK

The Stock subject to options under the Plan shall be shares of the
Corporation's authorized but unissued or reacquired Stock. Subject to the
adjustments described in Section 6 of the Plan, the aggregate number of shares
that may be issued pursuant the to the Plan shall not exceed 1,000,000 shares.
In the event that any outstanding option granted under the Plan for any reason
expires or is terminated, the shares of Stock allocable to the unexercised
portion of such option may again be subjected to the grant of options under the
Plan.

SECTION 3. ELIGIBILITY

SECTION 4. EMPLOYEE AND CONSULTANTS OPTIONS

<PAGE>
SECTION 5. NON-EMPLOYEE DIRECTORS OPTIONS

SECTION 6. ADMINISTRATION

(1) To determine eligibility to participate in the Plan and designate
participants;

(2) Determine the number of options to be granted to each participant;

(3) Determine the terms of option agreements for each option;

(4) Supervise administration of the Plan;

(5) Interpret the provisions of the Plan and option agreements granted
under it; and

(6) Take all action in connection with the Plan as it deems necessary
or advisable.

SECTION 7. TERMS AND CONDITIONS OF OPTIONS

Options under the Plan granted by the Committee shall be evidenced by
stock option agreements in such form as the Committee shall from time to time
approve, and shall comply with and

<PAGE>
be subject to the following terms and conditions.

7.1 Number of Shares. Each option agreement shall state the number of
shares of Stock subject to the option.

7.3 Determination of Fair Market Value. The fair market value per share
of Stock shall be determined by the Committee in good faith at the time the
option is granted.

7.5 Securities Restrictions. All option agreements evidencing options
granted under the Plan shall provide that:

SECTION 8. ADJUSTMENT

SECTION 9. PROCEEDS

The proceeds received by the Corporation from the sale of Stock
pursuant to the Plan will be used for general corporate purposes.

SECTION 10. OBLIGATION TO EXERCISE; RIGHT TO CONTINUED EMPLOYMENT

The granting of an option shall impose no obligation on the optionee to
exercise the option. The granting of an option does not confer any right to be
continued in the employment of the Corporation.

SECTION 11. AMENDMENT AND DISCONTINUANCE

(1) Increase the aggregate number of shares of Stock for which options
may be granted under the Plan (except for adjustments pursuant to Section 6);

(2) Decrease the option price at which stock may be offered;

(3) Materially modify the requirements as to eligibility for
participation in the Plan; or

<PAGE>
(4) Alter or impair, without the optionee's consent, the rights or
obligations under any option previously granted pursuant to the Plan.

SECTION 12. TERM OF PLAN AND EFFECTIVE DATE

The Plan shall become effective on the date the Plan is approved by the
Board.

Options may be granted pursuant to the Plan from time to time within 10
years after the plan becomes effective.

AS ADOPTED BY THE BOARD OF DIRECTORS OF ITEX CORPORATION EFFECTIVE ON THE 3rd
DAY OF SEPTEMBER, 1997 PURSUANT TO SECTION 12 HEREOF, AND AS APPROVED BY THE
SHAREHOLDERS OF ITEX CORPORATION ON THE 9th DAY OF FEBRUARY, 1998.

/s/ Graham H. Norris
- -----------------------------------
Graham H. Norris, President and CEO

[ITEX CORPORATION LETTERHEAD] Exhibit 5.1

May 20, 1998

ITEX Corporation
One Lincoln Center
10300 S.W. Greenburg Road, Suite 370
Portland, OR 97223

Ladies and Gentlemen:

In the position of employed General Counsel, I have acted as counsel to
ITEX Corporation, a Nevada corporation (the "Company") in connection with the
filing of a Registration Statement on Form S-8 to be filed by the Company with
the Securities and Exchange Commission (the "Registration Statement") relating
to 2,970,000 shares of Common Stock issuable pursuant to the Company's 1996,
1997 and 1998 Key Employees' Incentive Stock Option Plans adopted by the
Company's Board of Directors on December 15, 1995, December 27, 1996 and
September 3, 1997, respectively, and approved by the Shareholders of the Company
on May 3, 1996 with respect to the 1996 Plan and on February 6, 1998 with
respect to the 1997 and 1998 Plans (the "1996 Plan", "1997 Plan" and "1998 Plan"
respectively).

In connection with the foregoing, I have examined, among other things,
the Plan and originals or copies, satisfactory to me, of all corporate records
and of all agreements, certificates and other documents as I deemed relevant and
necessary as a basis for the opinion hereinafter expressed. In such examination,
I have assumed as genuine all signatures, the legal capacity of all individual
signatories, the authenticity of all documents submitted to me as originals and
the conformity with the original documents of documents submitted to me as
copies or facsimiles thereof. As to any facts material to such opinion, I have,
to the extent that relevant facts were not independently established by me,
relied on certificates of public officials and certificates, oaths and
declarations of officers or other representatives of the Company. I have assumed
that the certificates representing the shares issued pursuant to each Plan will
each be duly executed and delivered in accordance with applicable law.

Based upon the foregoing, I am of the opinion that the shares, if and
when issued in accordance with each Plan, will be legally issued, fully paid and
non-assessable.

I hereby consent to the filing of a copy of this opinion as an exhibit
to the Registration Statement.

Sincerely,

/s/DONOVAN C. SNYDER
DONOVAN C. SNYDER
Attorney at Law

[ANDERSEN ANDERSEN & STRONG, L.C LETTERHEAD] Exhibit 23.1
.

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We consent to the incorporation by reference of our report on the financial
statements of Itex Corporation, a Nevada Corporation (Itex), into a registration
statement on Form S-8 to be filed by Itex before July 31, 1998 (S-8 Registration
Statement). Our report is included in Itex's annual report on Form 10K for the
fiscal year ended July 31, 1997, which report is incorporated by reference into
the S-8 registration statement.

/s/ Andersen Andersen & Stong L.C.

Andersen Andersen & Strong L.C.
Salt Lake City, Utah
May 4, 1998