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by Stockwatch Business Reporter
The S&P/TSX Cannabis Index inched up 0.36 point to 123.04 Thursday, while the Canadian Securities Exchange Composite Index slipped 3.23 points to 452.23. After releasing its Q2 2020 results yesterday, Ken Villazor's Flower One Holdings Inc. (FONE) fell three cents to 33 cents and was then halted within the last hour of trading. This morning, the Nevada-based cannabis producer announced that it had arranged a $5-million financing, through which the company will issue 20 million units at 25 cents (a considerable discount from his 33-cent share price). Each unit will include a share and a warrant, where the warrants will be exercisable at 36 cents for three years. The news of the financing caused Flower One shares to plunge nine cents to 24 cents, bottoming out during intraday trading at a new all-time low of 22 cents.
The financing will certainly help to repair Flower One's balance sheet. As of June 30, the company had a working capital deficit of $3.3-million (U.S.) and cash of just $3.6-million (U.S.), while having burnt through $16.5-million (U.S.) of cash from operations in the first half of 2020.
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