Verticalnet raises $2M in private financing

Verticalnet Inc. said today it has completed a private placement of $2.2 million in preferred stock financing.

The Malvern software company said, in a statement, the financing includes $1.58 million in new capital and the conversion of $600,000 of debt loaned to the company in early May.

Verticalnet said several individual and institutional investors invested $2.175 million. The company agreed to issue to the investors 8.7 million shares of Series B preferred stock. The transaction resulted in net proceeds to Verticalnet of about $1.95 million.

Verticalnet said it will use the proceeds for working capital, repayment of its final two payments of senior secured convertible notes, and partial repayment of the company's subordinated discount note. The preferred stock includes an interest rate of 12 percent a year, the company said.

Verticalnet shares were up 5 cents to 38 cents on the Nasdaq.