Borislav Tonev

Fastfunds Financial Corporation (OTCMKTS:FFFC) Wakes Up for Christmas

by Borislav Tonev December 28, 2015

Last week, a couple of Form 4's informed us that Mary Virginia Knight, the wife of Henry Fong, Fastfunds Financial Corporation (OTCMKTS:FFFC, FFFC message board)'s sole Director and Officer, has spent a grand total of $27,500 buying shares of the company's common stock on the open market. In the past, Mr. Fong himself has also owned shares in penny stock companies. History shows us, however, that he hasn't been very keen on keeping them which has in turn led to some badly burned investors as well as a run-in with the SEC.

Nevertheless, people apparently reckon that if Mr. Fong's family is spending money on FFFC, they should do the same. Four days of intense trading dragged the ticker out of obscurity and pushed it to a pre-Christmas close of $0.0004 per share.

Investors aren't too bothered about Mr. Fong's past and they appear to be ignoring his present as well. At the moment Henry Fong is at the helm of a company whose financial statement looks like this:

  • cash: $3,415
  • current assets: $172,075
  • current liabilities: $11,993,482
  • quarterly revenues: $203,619
  • quarterly net loss: $355,803

Admittedly, the appalling figures and Mr. Fong's past might not present such a big problem. Although raising money is sometimes a tall order for OTC-listed companies, there is a chance that FFFC could be able to solve some of the balance sheet issues. And as for Mr. Fong's past involvement with penny stock companies, the problems occurred such a long time ago, that he has probably forgotten most of them. A thing that could really hurt investors, however, is the dilution that has already occurred and the potential for more newly-printed shares hitting the float.

In February, the company effected a rather huge 1 for 600 reverse split which brought the O/S count down to just over 14 million. Over the following months, however, the printing press churned out nearly 1.53 billion shares at an average rate of just under $0.0002 as a conversion of debentures and notes. Quite a lot of debt was still outstanding on September 30 and over the following month and a half, $19 thousand of it was turned into 417 million shares which pushes the conversion rate down to less than $0.00005 per share.

In other words, about 86% of the total O/S count (which stood at around 2.26 billion last week) was issued at prices way below the current market value. While Mr. Fong and his family probably won't be in a hurry to get rid of their shares, the holders of the discounted stock might be, and this could prove quite catastrophic for the people whose money is on the line.

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