Answers (ANSW) Announce $13 Million Private Placement From Redpoint Ventures

June 17, 2008 8:00 AM EDT

Answers Corporation (NASDAQ: ANSW) has entered into definitive agreements for the private placement of up to $13 million of convertible preferred stock and warrants to Redpoint Ventures, a Menlo Park, CA, based venture capital firm specializing in early stage and growth capital investments for the Internet and technology sectors.

Through a transaction executed on June 16, 2008, Answers issued $6 million of series A convertible preferred stock, convertible into 1,333,333 shares of common stock at a conversion price of $4.50 per share, with 50% warrant coverage at an exercise price of $4.95. Additionally, Redpoint was issued a second tranche warrant, exercisable over the next 12 months, to purchase up to an additional $7 million of series B convertible preferred stock, convertible into 1,272,727 shares of common stock at a conversion price of $5.50 per share, with 50% warrant coverage at an exercise price of $6.05.

As part of the investment, Redpoint's Allen Beasley will join the Company's board of directors. In the event Redpoint exercises the second tranche warrant and meets ownership requirements specified in the definitive agreements, Redpoint will be able to appoint a second member of the Company's board of directors.[SM]

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