IP Applications Receives Final Acceptance of Non-Brokered Private Placement



    VANCOUVER, Aug. 10 /CNW/ - IP Applications Corp. (TSX-Venture: IPX) ("IP
Applications" or the "Company") is pleased to announce that, further to the
Company's news release of May 26, 2009, it has formally closed its
non-brokered private placement and raised gross proceeds of $1,000,000.
    John Jacobson, President and CEO, said "This financing provides funding
for our aggressive pursuit of new customers for our industry-leading on-demand
billing platform. The on-demand billing and payments space is rapidly
developing and IPA is well positioned to take advantage of this growing
market. Our target customers are online businesses selling technology services
and products on a subscription basis. This includes not only SaaS and Cloud
Computing companies, but also new and existing enterprises who want to expand
into this channel. Our expertise in on-demand billing and payment
applications, developed over the last ten years, positions us to meet the
on-demand billing needs of these companies. It's available today and it
works."
    The Company received final acceptance from the TSX Venture Exchange (the
"Exchange) for the issuance to Pender Growth Fund (VCC) Inc. ("Pender") of
8,333,333 convertible preferred shares (the "Shares") of the Company at a
price of $0.12 per Share (the "Offering"). The Company has also issued
4,000,000 common share purchase warrants (the "Warrants") in connection with
the Offering, each of which will entitle Pender to acquire a common share of
the Company (the "Warrant Shares") at a price of $0.36 until August 7, 2014.
The Shares and Warrants, as well as any common shares issued or conversion of
the Shares or exercise of the Warrants, are subject to a four month hold
period expiring on December 8, 2009.
    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 are 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 Pender and by Pender Financial Group Corporation. The terms of the Shares
provide that they be redeemable at the original issue price, plus accrued and
unpaid dividends (the "Redemption Price"), on or after the fifth anniversary
of the Closing or on the occurrence of a change of control, consolidation,
amalgamation or merger of the Company, a sale of substantially all of the
Company's assets or undertaking, or a liquidation, winding-up or dissolution
of the Company.
    The terms of the Investment Agreement which the Company entered into with
Pender in relation to the Offering provide that, for as long as Pender's
investment in the Shares is an "eligible investment" as defined in the Small
Business Venture Capital Act (British Columbia), the amount that Pender (or
any transferee of the Shares) will receive on redemption of the Shares will be
the lesser of: (a) a price equal to three times the Company's annual revenue,
calculated on a per common share basis; and (b) the Redemption Price. The
terms of the Investment Agreement also provide that Pender has a pro-rata
right to participate in subsequent equity or debt financings and maintain its
percentage equity ownership of the Company.
    IP Applications had received approval from its shareholders to amend the
Company's Notice of Articles and create the Shares at a special meeting held
on July 28, 2009. As well, the Company increased the number of common shares
it is authorized to issue to an unlimited number of authorized common shares.
Further, as the Company had previously received from Pender an advance of
$500,000 of the subscription proceeds to assist with operating cash flow, it
received the final installment of $500,000
    Pender is a "related party" of the Company and accordingly the Offering
is a "related party transaction", as such terms are defined under Multilateral
Instrument 61-101 ("MI 61-101"). The Offering is exempt from the formal
valuation and minority shareholder approval requirements of MI 61-101 as the
common shares of the Company are listed only on the TSX Venture Exchange and
the Offering has been approved by the independent directors of the Company,
one of whom is not an officer or employee of the Company. Two of the directors
of the Company are also directors of Pender, and such related directors
abstained from voting on matters related to the Offering. The Offering closed
before 21 days following the filing of a material change report as the Company
determined this was necessary and reasonable in the circumstances.
    Assuming exercise in full of the Warrants and full conversion of the
Shares into common shares of the Company, Pender would hold approximately 55%
of the issued and outstanding common shares of the Company.

    About IP Applications

    IP Applications Corp. (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
Software-as-a-Service (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.

    Forward-Looking Statements

    This news release contains forward-looking statements. Actual events or
results may differ materially from those described in the forward-looking
statements due to a number of risks and uncertainties, including changes in
financial and product market conditions altering or eliminating product usage,
changes in exchange rates affecting profitability, and competitor's product
enhancements reducing IP Application's competitive advantage. Forward-looking
statements are based on management's estimates, beliefs, and opinions. The
Company assumes no obligation to update forward-looking statements, other than
as may be required by applicable law.

    
    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: John Bean, CFO, D (604) 630-5657, E
ir@ipapplications.com

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IP APPLICATIONS CORP.

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