Citadel Software Inc., a vendor of automated vulnerability remediation technology, says it has raised $2.5 million private placement funding.
The company issued 3.125 million shares of restricted common stock at a purchase price of 80 cents per share. Investors included institutions and accredited investors.
Citadel said Thursday that the funding, along with the recent Slammer worm attack, validates the company's Hercules technology to automate fixing security holes in enterprise systems. Security managers can't keep up with manually resolving vulnerabilities, the company said.
In connection with the private placement, Citadel also issued warrants to purchase about 1.725 million shares of common stock. The warrants issued to investors have an exercise price of $1.50 per share and a three-year term. About 161,000 of the total warrants were issued to the placement agent at an exercise price of $1.18 per share.