Quarterly Revenues increase 32%
VANCOUVER, Nov. 29 /CNW/ - IP Applications Corp. (TSX-Venture: IPX), a
leading IP solutions provider, today announced results for its second fiscal
quarter ended September 30, 2005 and a Private Placement for $500,000.
Fiscal Q2 Results
Revenues for the quarter reached a record high of $2,274,439, an increase
of 89% from $1,201,290 recorded in the same quarter in the previous year
(ended September 30th, 2004), and a 32% increase over the $1,721,109 realized
in the preceding fiscal quarter (ended June 30th, 2005).
Neil McDonnell, President and CEO said, "Our revenue growth is
significant. Fiscal Q2 is the first quarter in which we have been able to
realize a full quarter's results from our recent acquisition of the assets of
PacificNet and a customer contract from SourceNet. We also continued to see
growth with customers such as AOL Canada and Sage Telecom increasing their
subscriber uptake of IP Applications' services."
Net loss for the fiscal quarter ended September 30, 2005 was $835,974 or
$0.06 per share, which included amortization and non-cash expenditures
totaling $353,812. The loss for the comparative quarter ended September 30,
2004 was $478,647 or $0.06 per share, which included amortization and non-cash
expenditures totaling $96,808.
McDonnell continued, "Contributing to the quarterly loss was $495,000
worth of non-recurring operating expenses, including approximately $370,000
associated with integrating the PacificNet assets and the SourceNet customer
contract and $125,000 pertaining to a bad debt specific to one customer. The
integration costs are now behind us and our business has scaled to a point
where we can generate operational savings by reducing our infrastructure and
provisioning expenses and as a result, improve gross margins."
Operational highlights include:
- Successfully completed PacificNet and SourceNet integrations.
- A contract amendment with Sage Telecom for IP Applications' Network
Management System (NMS), which provides real-time visibility into
Sage's network infrastructure.
- An expansion to our AOL Canada Inc. agreement that provides
Operational Support Systems (OSS) applications and support for its
outsourced co-branded and white-labeled Internet services.
Private Placement
IP Applications has entered into an agreement for a non-brokered private
placement offering with Pender Financial Group Corporation and Pender Growth
Fund (VCC) Inc. (collectively, the "Investors") to raise gross proceeds of
$500,000 of which $375,000 will be purchased by Pender Growth Fund (VCC) and
the balance by Pender Financial Group Corp.
The securities issued will be in the form of convertible secured
debentures due 18 months from the date of issue, 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 common 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
debentures purchased. Each whole bridge warrant will entitle the holder to
purchase one common share at $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 financing is subject to regulatory approval and net proceeds 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, Signed,
"Neil McDonnell" "Richard Topham"
President & CEO CFO
The TSX Venture Exchange does not accept responsibility for the accuracy
of this release.
