AdEffective launches $1.5m rights issue

AdEffective Limited (ASX:ABN) has launched a rights issue, in a bid to raise around $1.49 million.

The online advertising company announced a 1-for-1 rights issue at the price of 1.5 cents per share. Each share will come with one free attaching option, exercisable at the same price until June 2014.

Announcing the issue, AdEffective said the proceeds from the issue will be used to pay off AdEffective's remaining debt, for working capital, and to “evaluate opportunities to diversify its current business offerings moving forward.”

Melbourne-headquartered AdEffective offers search, and display advertising services including a content delivery platform, giving advertisers a chance to publish ads across its partner syndication network.

The company last week reported a 41 per cent higher net loss of $1.35 million for 1H11. The result was attributed partly to impairment of goodwill on the acquisition of the online advertising assets of publishing solutions company Planet W, and the write-off of the company's finance facility fee.

Also last week, AdEffective completed a 1 for 50 share consolidation, in a bid to improve its share price and reduce its number of shares on issue to a level comparable with other companies of its size.

Before the share consolidation, AdEffective shares last traded at $0.001, while they are currently trading at $0.019.