VANCOUVER, Dec. 20 /CNW/ - IP Applications Corp. (TSX-Venture: IPX), a
leading IP solutions provider, today announced that it has closed the non-
brokered private placement previously announced on November 29, 2005 with
Pender Financial Group Corporation and Pender Growth Fund (VCC) Inc.
(together, the "Investors") raising gross proceeds of $500,000 of which
$375,000 was raised from Growth Fund (VCC) Inc. and the balance from Pender
Financial Group Corporation.
The securities issued consist of convertible secured debentures due in 18
months on June 19, 2007 with an interest rate of 12% per annum calculated and
paid quarterly in cash. Should the Company complete a financing in excess of
$1.5 million before February 28th, 2006 ("Qualifying Financing"), each
Investor will have the right to either a) convert their debentures on the same
terms and conditions as the Qualifying Financing; or b) have their debentures
redeemed in full by the Company.
If a Qualifying Financing does not occur, each Investor may convert its
debentures into units at $0.40 with each unit consisting of one common share
and one-half share purchase warrant with each full warrant exercisable into
common shares at a price of $0.50 for a period of 12 months from issuance and
at a price of $0.55 for the period 13-24 months from issuance.
Further, each Investor will be issued 2.5 bridge warrants for every $1 of
debenture purchased. Each whole bridge warrant will entitle the holder to
purchase one common share at a price of $0.50 for a period of 12 months from
closing and at a price of $0.55 for the period 13-24 months from closing. The
maximum number of warrants issued pursuant to the transaction shall not exceed
1,875,000 warrants.
The securities issued pursuant to the private placement are subject to a
4 month hold period expiring on April 20, 2006. In the event that IP
Applications Corp. completes the Qualifying Financing and the Investors choose
to convert their debentures on the same terms and conditions as the Qualifying
Financing, the securities issued to the Investors pursuant to the Qualifying
Financing will be subject to a 4 month hold period commencing on the date the
securities are distributed to the Investors.
The net proceeds from the private placement will be used for operating
working capital.
About IP Applications
IP Applications partners with companies who offer IP 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 end users a value-added
complement to a wide variety of web services.
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.
Signed,
"Richard Topham"
CFO
The TSX Venture Exchange does not accept responsibility for
the accuracy of this release.
