IP Applications Corp. Business and Products Update

    VANCOUVER, Oct. 4 /CNW/ - IP Applications Corporation (TSX-V: IPX) wishes
to update investors on the Company's activities to September 2007.
    During the course of 2007, IP Applications has moved towards increasing
shareholder value by successfully stemming its operating cash ("EBITDA")
losses for two consecutive quarters. Further, beginning in Q2 and continuing
in the early part of Q3, the Company began winning contracts with new
customers, an important next step in restoring the Company's growth and value.
    John Jacobson, President and CEO said "The Company's historical
dependence on dial-up ISP revenue and the dramatic decline in the US Dollar
since 2005 have been a difficult challenge. Our turn-around strategy was to
cut costs while we determined which segment of our customer base represented
the largest opportunity for strong future growth. This assessment was
completed during 2006, and in 2007 we've concentrated on delivering services
to the rapidly expanding Software-as-a-Service market and in particular to
improve customer satisfaction and reduce subscriber churn. Since the start of
Q2 2007, we've signed eight new contracts with estimated annualized aggregate
monthly recurring revenue of $950K per year."
    The Company believes that its strategy to concentrate resources on the
growing segment of its business, rather than attempting to salvage its
traditional but steadily declining dial-up business, is working. As the new
customers complete the set-up phase of their contracts and the Company begins
delivering services, the Company believes that net revenue growth will begin
to return.

    Business Operations:

    During the first half of 2007, the Company achieved effective break-even
on EBITDA, a significant improvement over the $0.24M EBITDA loss during the
first half of 2006 and even greater improvement over the $1.4M EBITDA loss in
2005. We anticipate this trend will continue through the remainder of fiscal
    Though the Company has reduced its cash burn significantly, it prefers to
re-capitalize to support growth, eliminate debt and position itself to make
future investments. To this end, the Company expects to close a non-brokered
private placement offering in early Q4.

    Product Update

    Profiling its target customers has led IP Applications to expand its
range of services for hosted software applications. Hosted software
applications, often labeled "Software as a Service" is a growing market
segment and the company is redefining its service portfolio to provide the
specialized support needed by companies bringing products to market using this
sales channel.
    The Company also introduced three new products in 2007.
    The Company's new web technology to help its customers reduce subscriber
churn in multi-level marketing systems was launched to an enthusiastic
response from an existing customer at its annual convention in August 2007.
Additional revenues from this source are expected to materialize in Q4.
    The second product, the Company's proprietary Voyager trouble-ticketing
system, delivered as a hosted service is now in use by one of the Company's
larger customers as a value-added adjunct to IP Applications' customer care.
    The third product, MyHelpDesk.com, continues to fall short of target
revenue levels. Product development was slowed and marketing costs reduced in
order to shift resources to other near term growth opportunities. The Company
continues to believe in the product and will reevaluate the marketing strategy
in Q4.

    About IP Applications

    The Company delivers business process automation and customer care for
companies in the rapidly expanding Software-as-a-Service ("SaaS") market. IP
Applications' customers use the Company's data center and staff to run
particular segments of their business operations. While customers are left to
focus on their product marketing and technology, IP Applications solves the
end user satisfaction and subscriber management issues for them.

    Forward-Looking Statements

    This press release may contain 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. Forward-looking
statements are based on management's estimates, beliefs, and opinions. The
company assumes no obligation to update forward-looking statements.

    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.

For further information:

For further information: Richard Topham, CFO, D (604) 630-5657, E

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