Ivrnet Inc. - $3,000,000 loan facility drives operational efficiency

CALGARY, Aug. 3, 2016 /CNW/ - Ivrnet Inc. (TSXV: IVI) ("Ivrnet" or the "Corporation") announces it has established an additional loan facility of up to $3,000,000 (the "Loan") from R.C. Morris & Company Special Opportunities Debt Fund III LP (the "Lender") with an initial advance on the Loan of $1,100,000 on closing.

The Loan matures in August, 2020 and has an interest rate of 17%, compounded monthly. In the event the Loan is not repaid at maturity, the interest rate will become 24% until paid. A structuring fee of $30,000 was payable to the Lender at closing. The Lender will also receive, as additional consideration for advances and any subsequent advance, warrants to purchase such number of Ivrnet shares equal to 7% of the principal amount of each advance divided by the market price of the share on such date, for an exercise price per share equal to the market price on such date. The Warrants expire no later than five (5) years from date of issuance.  Warrants and any shares issued upon exercise of the warrants are subject to a 4-month hold period from the date of closing or date of exercise of the warrants.

At the time of closing Ivrnet entered into a monitoring services agreement with an affiliate of the Lender, R.C. Morris & Company Capital Ltd., and agreed to pay a monthly fee of $1,800.00 plus 0.16% of the aggregate amount of the Loan advanced in any calendar month after closing. 

The initial advance from RC Morris will be used both to reduce operating costs and to advance the business.  On the side of cost reduction, the loan will allow Ivrnet to retire existing debt, including expensive credit debt, and to move the Ivrnet Data Center into a more cost effective fully managed third part data center. 

"The RC Morris loan allows Ivrnet to take significant steps forward", stated David Snell, Ivrnet's President and CEO. "Operationally, this loan allows us to move our data center into the new ViaWest data center built in Calgary. This is a world class data center owned by our largest carrier partner, Shaw Communications, that will allow us to meet all of our client's unique requirements without having to operate our own internal center."

The initial RC Morris advance will increase Ivrnet's debt servicing costs by $12,000 per month, but Ivrnet estimates moving to the ViaWest Data Center will provide long term savings of $13,000 per month. Further, it will eliminate $389,000 of internal hardware expenditures that are scheduled over the next 12 months.   

Additionally, the initial loan advance will also be used for Inbound marketing campaigns to generate more client opportunities for the sales force, additional development resources and QA resources to accelerate product development, HR resources, expansion of the sales and finance teams, and general working capital.

A broker fee of $55,000.00 was paid to Omega Venture Group Inc. in connection with the closing of the lending facility.

About Ivrnet

Ivrnet is a software and communications company that develops, hosts, sells and supports value added business process improvement and advertising software applications, delivered through the traditional phone network and the Internet. These applications facilitate automated interaction through personalized communication between people; mass communication for disseminating information to thousands of people concurrently and personalized communication between people and automated systems. Ivrnet's applications are accessible through nearly any form of communication technology, at any time, from anywhere in North America via voice, phone, fax, email, texting and the Internet.

www.ivrnet.com

Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE IVRnet Inc.

Copyright 2016 Canada NewsWire