By Devika Patel
Knoxville, Tenn., June 17 - Answers Corp. said it raised $6 million in a private placement of series A convertible preferred stock on June 16.
The preferreds are convertible into 1,333,333 common shares at $4.50 per share.
Redpoint Ventures, the investor, also received 50% warrant coverage, exercisable at $4.95.
In the next year, Redpoint may buy an additional $7 million of series B convertible preferreds, 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.
Proceeds will be used to strengthen Answers' balance sheet.
New York-based Answers operates Answers.com, a reference web site.
| Issuer: | Answers Corp.
|
| Issue: | Series A convertible preferred stock
|
| Amount: | $6 million
|
| Conversion price: | $4.50
|
| Conversion ratio: | Into 1,333,333 shares
|
| Warrants: | 50% coverage
|
| Warrant strike price: | $4.95
|
| Investor: | Redpoint Ventures
|
| Settlement date: | June 16
|
| Stock symbol: | Nasdaq: ANSW
|
| Stock price: | $3.92 at close June 16
|
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