Intelidata Technologies Corp. said it raised $6 million through a private placement of convertible preferred stock.
The investors, South Ridge Capital of Ridgefield, Conn., and Cavallo Capital of New York, have options to invest $4 million more this year.
Alfred S. Dominick Jr., president and chief executive officer of the Reston, Va.-based on-line banking software developer, said the capital will be used to enhance electronic bill payment and presentment software and to develop a fledgling bill-payment outsourcing service.
"Frankly, we needed to have some additional equity to carry forward with our internal developments," Mr. Dominick said.
The capital also is intended to help Intelidata comply with Nasdaq's listing requirement of $4 million of net tangible assets. After burning through $500,000 of cash in the first quarter, the company fell below the Nasdaq threshold.
Depending on the outcome of the stock conversions, the equity offerings could dilute existing Intelidata stock holdings by as much as 10%. The stock was trading at $3.4375 Friday, down 6 cents for the week.