IP Applications Corp. Announces Non-Brokered Private Placement



    VANCOUVER, May 26 /CNW/ - IP Applications Corp. (TSX-Venture: IPX) ("IP
Applications" or the "Company") today announces that it has signed a term
sheet with Pender Growth Fund (VCC) Inc. ("Pender"), a major shareholder of
the Company, pursuant to which the Company has agreed to negotiate with Pender
the terms of a non-brokered private placement to raise $1,000,000 through the
issuance to Pender of 10% convertible preferred shares (the "Shares") of the
Company at a price of $0.12 per Share (the "Offering"). The Company expects to
issue 4,000,000 common share purchase warrants in connection with the
Offering, each of which will entitle Pender to acquire a common share of the
Company at a price of $0.36 for a period of five years from the closing of the
Offering (the "Closing").
    Pender will be entitled to an annual cumulative cash dividend of 10% of
the issue price of the Shares, payable in cash in arrears on December 31 of
each year. The Shares will be convertible at Pender's option into common
shares of the Company on a 1:1 basis. After a period of 18 months from the
Closing, the Company may elect to convert the Shares into common shares if:
(A) the closing price of the common shares is at a price greater than $0.40
per share for a period of 30 consecutive trading days, and (B) the total
trading volume over such period is greater than 20% of the common shares
issued and outstanding at the beginning of such period, excluding all common
shares of the Company held by the Fund and by Pender Financial Group
Corporation. The Shares will be redeemable at the original issue price, plus
accrued and unpaid dividends, on or after the fifth anniversary of the
Closing. Pender will have a pro-rata right to participate in subsequent equity
or debt financings, to maintain its percentage equity ownership of the
Company.
    The Offering is subject to approvals of: (i) the board of directors of
Pender, (ii) the administrator of the Small Business Venture Capital Act
(British Columbia), and (iii) the TSX Venture Exchange. The Offering is also
subject to the approval by the shareholders of the Company of a resolution
amending the Company's Notice of Articles to create the Shares, to be proposed
at a special meeting of the Company's shareholders (the "Meeting") which is
expected to be held on or about July 28, 2009. The Closing is expected to
occur on or about July 31, 2009.
    Pender has agreed to advance $500,000 of the subscription proceeds to the
Company to assist the Company with its operating cash flow. The advance will
be evidenced by way of a promissory note, and will be repayable on demand at
any time after 75 days from the date of the advance.
    IP Applications intends to use the net proceeds for working capital
necessary to advance its development and marketing initiatives in respect of
the rapidly expanding Software as a Service ("SaaS") / Cloud computing
markets.

    About IP Applications

    IP Applications (www.ipapplications.com) delivers billing, payments
processing and technical support services for online businesses. The Company's
on-demand billing and payments application delivers variable recurring
payments processing and subscriber lifecycle management for SaaS and Cloud
computing companies. Established in 1998, the Company has a client roster that
includes Sprint Nextel, Bell Mobility, Amway Corporation and AOL Canada, a
division of Time Warner.

    Forward-Looking Statements

    This press release may contain forward-looking statements. The Company
cautions users of this forward-looking information that actual results or
events may vary materially either favorably or unfavorably from those
described due to a number of risks and uncertainties. Such risks and
uncertainties include, but are not limited to: the Company and Pender
finalizing the terms of the Offering; the shareholders of the Company
approving the resolution creating the Shares; the Company obtaining regulatory
acceptance of the Offering; the inability of the Company to accurately
forecast the revenue from new and existing customers; the inability of the
Company's customers to accurately forecast their own demand for the Company's
products and service; changes in the relative value of the US and Canadian
dollars; the possibility that one or more customers or suppliers might
experience financial difficulties that could affect the Company's ability to
deliver and get paid for its products and services; and changes in the growth
rate of technology and telecommunications concerns. Refer to the Company's
most recent management's discussion and analysis ("MD&A") for further
discussion of these and other risks and uncertainties in relation to such
forward-looking information.
    Forward-looking information is based on management's current
expectations, estimates and opinions. Please refer to the MD&A for a
discussion of the events and circumstances which occur that cause, or are
likely to cause, actual results to differ materially from such forward-looking
information.

    
    Neither TSX Venture Exchange nor its Regulation Services Provider (as
    that term is defined in the policies of the TSX Venture Exchange) accepts
    responsibility for the adequacy or accuracy of this release.
    





For further information:

For further information: Contact: Richard Topham, CFO, D (604) 630-5657,
E ir@ipapplications.com

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IP APPLICATIONS CORP.

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