Answers Corporation (NASDAQ:ANSW) has entered into agreements for a private placement to raise cash up to $13 million via the sale of convertible preferred stock and warrants to Redpoint Ventures. Thomas Weisel Partners LLC acted as lead-placement agent and Canaccord Adams acted as co-placement agent for the offering.
The transaction was listed as yesterday and consisted of $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. Redpoint was also 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.
Answers Corp. closed yesterday at $3.92, and its 52-week trading range is $3.30 to $13.40. prior to this offering, its market cap was a mere $30.8 million.
Answers is the creator of the answer engine offering Answers.com(TM) and WikiAnswers.com(TM). Redpoint is a Menlo Park, CA, based venture capital firm that specializes in early stage and growth capital investments for the Internet and technology sectors. Redpoint’s Allen Beasley will join the board of directors at Answers and the firm will get a second board seat if it exercises its second financing.
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Jon C. Ogg
June 17, 2008
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