IP Applications Announces $1.8 Million Private Placement [December 9, 2004]

VANCOUVER, Dec 9, 2004 /PRNewswire-FirstCall via COMTEX/ -- IP Applications Corp. (TSX-Venture: IAP), a leading provider of comprehensive Internet Outsourcing Solutions, today announced a non-brokered private placement led by Pender Growth Fund (VCC) Inc., of 9,000,000 Units at $0.20 per Unit for gross proceeds of up to $1.8 million.

Each Unit will consist of one common share, one-half warrant and one cashless put warrant. Each full warrant will entitle the holder to purchase one additional share for a period of two years at a price of $0.20 per common share. Each cashless put warrant will entitle the holder to receive a payment from IP Applications (the Company) equal to the difference between the put warrant's exercise price of $0.20 and the 21 day weighted average trading price of the Company's shares prior to exercise if the 21 day weighted average trading price of the Company's shares is less than $0.20 per share at any time during the period between 12 and 24 months from the date of issue. The payment by the Company shall not exceed $0.05 per cashless put warrant and may be settled by the Company by the issuance of shares based on the 21 day weighted average trading price of the Company's shares prior to exercise subject to a minimum price of $0.15 per share.

Pender Growth Fund (PGF) will lead the $1.8 million financing with a total investment of $1.5 million. PGF's investment will be used for working capital purposes and will be made in two tranches. The first tranche of $1 million, plus up to an additional $300,000 from other investors, will close upon receipt of regulatory approval and the second tranche of $500,000 will close on the date IP Applications enters into a formal agreement with a US based company as disclosed in the Company's press release dated September 7, 2004. In the event the Company does not enter into a formal agreement with the US based company within 120 days of the first tranche, PGF will have the right to reduce the total size of its participation in the private placement to $1 million.

"This financing comes at a critical time in our growth cycle and we are pleased to have an investment partner such as Pender Growth Fund. Throughout the year we focused on building a strong stable monthly recurring revenue business but we could not have done it without their support. We invested heavily in our people, processes, systems and software to build a company capable of servicing some of the most demanding carriers and service providers in North America," said Mark Sampson, President and CEO of IP Applications.

The Company will use the proceeds to drive North American sales and marketing efforts, build and deliver new services and continue to develop and enhance its proprietary application technology.

This financing is subject to completion of formal documentation and receipt of regulatory approval.

IP Applications also agreed that, if it did not complete a financing of $2 million or more within 90 days of the closing of the private placement announced on September 1, 2004, it would issue to Pender warrants to purchase 3,750,000 common shares at a price of $0.20 per share for a period of 24 months from the date of issue. The private placement closed on September 14, 2004. As a result, IP Applications expects that it will issue the warrants to Pender on or about December 13, 2004.

About IP Applications

IP Applications provides comprehensive outsourcing solutions that enable service providers to deliver high quality Internet services. A leading provider in the industry, IP Applications has an enviable customer list, providing secure Internet outsourcing solutions to AOL Canada, Sprint, Telus, Skycable and Navigata.

IP Applications meets Internet service providers' needs by combining its customer-branded web-based account management, provisioning, billing and support platform with a full range of end user services including: authentication, email, personal web hosting, spam blocking, content filtering, email virus scanning, network acceleration, information portal, North American network and call center coverage. A single point of contact and trusted supplier, IP Applications backs every services contract with an industry leading Quality of Service guarantee written into every Service Level Agreement. Customers are provided around-the-clock access to a team of experts and all of IP Applications solutions are monitored 24 hours a day, 365 days a year, from its Carrier Class Data and Network Operations Center.

Contact:
Shay Prasad, CFO (Investor Relations)
TF 1.877.604.7277 x 127
D 604.523.2567
E sprasad@ipapp.com

About Pender Growth Fund (VCC) Inc.

Pender Growth Fund (VCC) Inc. is an established, diversified venture capital fund that invests in technology companies within the province of British Columbia with the objective of long-term capital appreciation. Pender Growth Fund is now the first fund of its kind in British Columbia to focus specifically on expansion and restructuring opportunities within the technology sector that offer investors the potential for liquidity through either existing public listings or near term liquidity events.

Pender Growth Fund is an investment vehicle with significant tax incentives for retail investors to participate in the recovery and growth of the British Columbia technology sector. The Fund has approximately $13 million of assets under management.

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
and accuracy of this release.

Signed:

"Shay Prasad"

Shay Prasad
Chief Financial Officer

SOURCE IP Applications Corp.