redCity Search Company Inc.
TSX VENTURE : RDC

redCity Search Company Inc.

August 18, 2006 14:31 ET

redCity Closes $9.2 Million Private Placement

TORONTO, ONTARIO--(CCNMatthews - Aug. 18, 2006) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE DISTRIBUTION SERVICES

REDCITY SEARCH COMPANY INC. (TSX VENTURE:RDC) ("redCity" or the "Company"), a local internet search engine company, today announced the closing of its previously announced best efforts private placement of 184 million common shares at a price of $0.05 per common share for aggregate gross proceeds of $9,200,000. J.L. Albright IV Venture Fund L.P. and J.L. Albright IV Parallel Venture Fund L.P. (collectively, "JLA Ventures") participated in the Offering by subscribing for common shares having an aggregate purchase price of $3,500,000.

A syndicate led by GMP Securities L.P. and including Orion Securities Inc. (the "Agents") acted as the Company's agents in connection with the private placement. A commission of 5.0% of the gross proceeds raised by this issue has been paid by the Company to the Agents. All of the shares issued in the private placement are subject to restrictions on resale until December 18, 2006 as prescribed under applicable securities laws and the policies of the TSX Venture Exchange.

In addition, the Company is pleased to announce that it completed: (i) its previously announced acquisition of all of the issued and outstanding securities of Zip411 Enterprises Inc.; (ii) its previously announced acquisition of all of the issued and outstanding securities of Offsite Corporation; (iii) the settlement of a total of $4,927,249.33 in outstanding liabilities of the Company in exchange for the issuance of 23,708,997 common shares; and (iv) the redemption of its 944,444 issued and outstanding preferences shares, series A (collectively, the "Transactions"), subject to final approval of the TSX Venture Exchange. Each of the Transactions was completed in accordance with the terms and conditions set forth in the Company's press release dated August 17, 2006.

Shareholder Approval

The Offering resulted in, or was considered part of a transaction that resulted in, the creation of a new control person. The TSX-V advised redCity that it required consent from disinterested shareholders, holding more than 50% of the issued and outstanding common shares of redCity, to all Transactions, including the creation of JLA Ventures as a new control person of redCity. TSX-V policies provide that shareholder approval may be obtained by ordinary resolution at a general meeting of Shareholders or by the written consent of shareholders holding more than 50% of the issued common shares. Shareholders of redCity who do not have an interest in any of the Transactions, excluding existing shareholders who intend to participate in the Private Placement, were eligible to be included in calculating disinterested shareholder approval to the creation of a new control person, the change of control and the change of management of redCity. Accordingly, redCity sought and received written consent of its disinterested shareholders holding 54% of the common shares held by disinterested shareholders.

The common shares of redCity are listed on the TSX-Venture Exchange. redCity currently has 260,461,662 outstanding common shares giving effect to the private placement and the Transactions.

The securities to be offered will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the benefit of, U.S. persons except in certain transactions exempt from the registration requirements of such Act. This news release does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state
in which such offer, solicitation or sale would be unlawful.

All currencies are stated in Canadian dollars.

About redCity Search Company Inc.

redCity Search Company Inc. (www.redcitysearch.com) operates local search engines that allow users to find local businesses quickly and easily. It was established in 2003 and is Toronto's first publicly listed local search company (RDC-TSXV). Its search sites include www.redToronto.com, www.redMississauga.ca and 411Canada.com. All Canadian businesses are entitled to a complimentary listing and website link as the service is supported by advertising revenue.

About J.L. Albright Venture Partners

J.L. Albright Venture Partners ("JLA Ventures"), a private venture capital firm, is a leading investor in technology companies at all stages of growth. The firm has offices in Toronto, Ontario and Montreal, Quebec. JLA Ventures' past and current portfolio companies include: Triple G Systems (acquired by General Electric), Pixstream (acquired by Cisco), Basis100 (acquired by First American Corporation), Fun Technologies (acquired by Liberty Media Corporation), Servicesoft Technologies (acquired by Broadbase), Isolation Systems (acquired by Shiva), Descartes Systems Group (NASDAQ:DSGX), Bioscrypt (TSX:BYT), Q9 Networks (TSX:Q), Quickplay Media, MusicIP, HealthUnity, and Planeteye. For more information please visit www.jlaventures.com.

FORWARD-LOOKING STATEMENTS

This news release may contain forward-looking statements based on management's current projections, beliefs and opinions at the date of this news release. Actual results could differ materially from those anticipated in the statements due to risks and uncertainties which affect the Company's business and operations. Reference should be made to the Company's continuous disclosure documents filed from time to time with Canadian securities regulatory authorities for a detailed description of such risks and uncertainties. The Company takes no responsibility to update forward-looking statements if circumstances or management's projections, beliefs or opinions change.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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