Adspace Networks Secures $20M Financing Round; Adds The Walnut Group As New Investor

NEW YORK, August 1 /PRNewswire/ -- Adspace Networks, Inc., owner of the largest in-mall digital video advertising network in the country, has completed a $20 million series E financing round and added James M. Gould, managing general partner of The Walnut Group and a director of Build-a-Bear Workshop, to the board of directors.

The Walnut Group's co-investment partner is The Hauser, Davis & Tysoe Group (HDT). One of its principals, Ronald W. Tysoe, former vice chairman of Federated Department Stores, will serve as a board observer.

In addition to The Walnut Group, a private equity fund based in Cincinnati and New York City, and HDT, the remainder of the funding came from Adspace's existing family of investors, including AIG (managed by Cartesian Capital), Steelpoint Capital, DCM and GIC investments. Adspace expects to use the funds to meet the needs of the rapidly expanding national footprint of its digital advertising network.

"After very positive feedback from our mall and REIT partners in the first half of the year, Adspace Networks is well on track to meet the goal of being in 100 malls by the fourth quarter of 2007," said Dominick Porco, chairman and CEO, Adspace Networks. "The addition of The Walnut Group and HDT, together with the encouragement and continued investment from our existing partners are further proof of our success. We also have advertisers and retailers telling us that we are moving the needle. Those components, combined with strong financial backing, are positive indicators of how we are poised to leverage the healthy growth expected in the out-of-home marketplace."

This news follows the recent release of a Nielsen efficacy study that shows that nearly half of mall shoppers (47 percent) viewed content provided on the Adspace Mall Network's Smart Screens and, of those viewers, an average of 34 percent recalled each ad on the network.

The Walnut Group's Mr. Gould has more than 25 years of experience in development, marketing and negotiation in the areas of investment capital, banking, real estate, sports and entertainment. Gould is a Director of Build- A-Bear Workshop and has produced, distributed, and packaged numerous motion pictures, television and entertainment events. Mr. Gould has been a frequent investor, through his partnership with Walnut's Chairman Frederic H. Mayerson, and has co-produced several award winning Broadway musicals including "Smokey Joe's Cafe," "Hairspray", and "Jersey Boys."

"One of The Walnut Group's core criteria is to invest in companies with outstanding management teams, a proven track record and a thorough understanding of the business," said Mr. Gould. "The senior management here at Adspace, led by Dominic Porco, Jeff Jensen and Bill Ketcham, have turned Adspace Networks into a focused leader in out-of-home media by combining their retail savvy with marketing and media expertise."

"We are thrilled to have Ron Tysoe as a new investor in Adspace through HDT. His counsel on retail, real estate and financial matters will be invaluable," said L. Jeff Jensen, president, Adspace Networks. "In addition, The Walnut Group's past investments in company's like Build-A-Bear demonstrate that they are a forward-looking company with their finger on the pulse of the consumer audience."

About AIG Investments

AIG Investments is a global leader in asset management with extensive capabilities in equity, fixed income, hedge, private equity and real estate investments. Member companies of AIG Investments manage more than US $685 billion in assets and employ over 2,000 professionals in 44 offices around the world as of March 31, 2007. AIG Investments is the asset management arm of American International Group, Inc. . As a member company of AIG Investments, AIG Capital Partners is a leading private equity investor in emerging markets, with 100 investment professionals located in 19 offices worldwide.

About DCM

DCM (formerly known as Doll Capital Management) is an early stage venture capital firm supporting entrepreneurs building world-class technology companies. The firm's partners manage US$1.6 billion and have funded leading technology companies including 2Wire, 51job, @Motion (Openwave), About.com (The New York Times Co.), All About, Arroyo (Cisco), Clearwire, Dang Dang, eDreams (TA), Foundry Networks, HireRight, Internap, IPivot (Intel), JCI (Nasdaq Japan - Hercules: 9424), Neopath Networks (Cisco), nQuire (Siebel), PGP Corporation, Recourse Technologies (Symantec), Sigmatel, SMIC, and Vimicro. DCM offers hands-on operational guidance and access to an extensive network of resources, including close relationships with many of the Pacific Rim's leading companies and investors. For more information, please visit DCM's website at http://www.dcm.com/.

About GIC Investments

GIC Real Estate is the real estate investment arm of the Government of Singapore Investment Corporation. GIC Real Estate manages a multi-billion Dollar portfolio of direct and indirect property investments with over 200 investments in more than 30 countries. It is one of the largest institutional investors in Asia and currently ranks amongst the world's top 10 global real estate investment firms.

About Steelpoint Capital

Steelpoint Capital Partners is a California and New York-based private equity investor. Steelpoint invests in late stage investments and buyout opportunities. Steelpoint's investment team has over a century of combined experience in entrepreneurial operations and principal investing. Representative investments include Atempo, Boingo Wireless, SNAP Appliance (acquired by Adaptec), Scene7 and PRN Corporation (acquired by Thompson). For more information on Steelpoint, http://www.steelpointcp.com/

About The Walnut Group

The Walnut Group consists of several diversified investment capital enterprises organized by life-long friends and business associates whose diverse, yet complementary entrepreneurial backgrounds span more than 25 years. They have been investors as well as founders and operators of businesses. The Walnut Group makes capital investments across a broad range of industry sectors and also facilitates transactions throughout North America. http://www.thewalnutgroup.com/

About Adspace Networks, Inc.

Adspace Networks, Inc. owns and operates the Adspace Mall Network, the largest in- mall digital video advertising network in the country. Currently located throughout 75 upscale malls across the United States, the network consists of over 900, eight-foot-tall plasma screens- called "Smart Screens." The Smart Screen displays show programming which combines a mix of the top ten sale items in the mall, mall events, and local and national advertising. The network reaches over 75 million affluent consumers each month (according to the Directory of Major Malls(R)), and is particularly effective at reaching teens, young adults, and women. Adspace is also a charter member of the Out- of-Home Video Advertising Bureau (OVAB), an organization that will help provide standards and best practices for the burgeoning out-of-home video advertising industry.

This release is available on the KCSA Worldwide Web site at http://www.kcsa.com/. CONTACT INFO: Anne Donohoe / Jennifer Handshew KCSA Worldwide (212) 896-1261 / (212) 896-1272 adonohoe@kcsa.com / jhandshew@kcsa.com