IP Applications Announces Purchase of Key Customer Contracts and Technology Assets, and Secures Private Placement Financing

VANCOUVER, June 7 /CNW/ - IP Applications Corp. (TSX-Venture: IPX), a
leading provider of outsourced Internet Solutions, today announced it has
entered into separate transactions with each of SourceNet Telecom of Portland,
Oregon and PacificNet of Calabasas, California for the purchase of key
customer contracts and other technology related assets.
The accretive acquisitions will add valued customer contracts and will
increase the monthly recurring revenues of IP Applications. The customer
contracts produced total revenues of CDN$330,000 in the month of May 2005 and
a net contribution of approximately CDN$78,000 after costs. As a result of the
acquisitions, IP Applications will provide services to over 40,000 new
subscribers. "By completing these two transactions simultaneously, we
strengthen our financial and our market position considerably," says Mark
Sampson, President and CEO of IP Applications.
IP Applications Corp. also today announced that it has agreed to the
terms of a non-brokered private placement offering with B.C. Advantage Funds
(VCC) Ltd. and Pender Growth Fund (VCC) Inc. to raise gross proceeds of
CDN$900,000.

SourceNet Telecom Transaction

IP Applications has acquired an Internet Outsourcing Contract and related
assets from SourceNet Telecom. The purchase price for the Contract and related
assets is US$338,800 payable in cash and shares, with US$175,000 payable in
cash and the issuance of 455,000 common shares of IP Applications Corp. The
common shares issuable to SourceNet Telecom will be subject to a four-month
hold period in Canada as well as applicable U.S. resale restrictions.
SourceNet Telecom resells Internet, long distance and wireless
communications services to leading direct marketing companies in the United
States and Canada. The transaction secures direct customer relationships and
enables IP Applications to enter into a long-term agency relationship with
SourceNet.

PacificNet Transaction

IP Applications has agreed to purchase certain customer and operating
contracts and other assets used in providing Internet Outsourcing Services
from PacificNet for US$550,000 in cash payable on closing.
PacificNet provides Internet Outsourcing Solutions, corporate and
residential Internet access, private IP networks, web and database hosting,  
co-location, managed solutions and application development and delivery.
Both transactions are expected to close the week of June 6, 2005, subject
to the receipt of all necessary regulatory approvals.

Private Placement Financing

IP Applications has entered into an agreement for a private placement
unit offering with B.C. Advantage Funds (VCC) Ltd. and Pender Growth Fund
(VCC) Inc. to raise gross proceeds of CDN$900,000 of which $500,000 will be
purchased by BC Advantage (VCC) and the balance by Pender Growth Fund (VCC).
Each unit offered under the private placement will consist of one common share
at CDN$0.45 of IP Applications Corp. plus one-half of one warrant. Each whole
warrant will entitle the holder to purchase one additional common share at
CDN$0.50 per share for a period of 12 months from the closing and at CDN$0.55
per share for the period 12 to 24 months from closing. The common shares
issuable under the offering will be subject to a four month hold period.
The financing is subject to regulatory approval and the completion of
definitive documentation. The net proceeds from the financing will be used to
replace working capital that will be used to finance the SourceNet and
PacificNet transactions described above.
"This is a great opportunity for BC Advantage to participate in the
development and growth of another exciting young BC company" said David Raffa,
COO and Fund Manager of BC Advantage. "We are pleased to see participation
from BC Advantage in this round of financing" said Kelly Edmison, Chairman of
the Board of IP Applications.

About IP Applications

IP Applications partners with companies who offer web services, providing
the applications, systems, and support necessary to run their business. The
combination of carrier-class facilities, mass provisioning capabilities and
dedicated technical and sales professionals makes IP Applications a trusted
strategic partner to Telecoms, Enterprises and BPL providers. The 24/7
multilingual help desk offers clients and their subscribers a value-added
complement to a wide variety of IP products and services.
www.ipapp.com

About Pender Growth Fund (VCC) Inc.

Pender Growth Fund is an established, diversified venture capital fund
focused on later stage investments in the information technology and
communications sectors. Pender Growth Fund is the first fund in BC to focus
specifically on expansion and restructuring opportunities that have the
potential for early liquidity through existing public listings or near term
liquidity events. The Fund offers investors a 30% cash-back tax credit to
participate in the recovery and growth of the BC technology sector. As of
December 2004, the Fund had assets of approximately $16 million.
www.penderfund.com

About B.C. Advantage Funds (VCC) Ltd.

Advantage is a life sciences and technology fund that offers everyone in
BC the opportunity to participate in returns from some of our Province's most
promising young technology and life science companies. Investors receive a 30%
refundable tax credit from the BC Government on investments of up to $200,000
per year. Advantage was co-founded by Dr. Don Rix, Chairman of the Board;
Frank Holler, CEO and Fund Manager; Jim Heppell, President and Fund Manager;
Dr. Basil Peters, BC Tech Fund Manager; and David Raffa, COO and Fund Manager.
www.bcadvantage.com

Forward Looking Statements

The 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.

Signed, "Shay Prasad"
Shay Prasad CFO