Borislav Tonev

Fastfunds Financial Corporation (OTCMKTS:FFFC) Confirms Dilution Fears

by Borislav Tonev April 10, 2015

On January 22, 2014, Fastfunds Financial Corporation (OTCMKTS:FFFC, FFFC message board) announced its plans to enter the marijuana business. Mr. Henry Fong took the helm a day later and he said that he'll do everything he can to “offer growth opportunities to stockholders.

We wrote about the company back then and we mentioned the fact that Mr. Fong's track record isn't exactly squeaky-clean. He has been involved with numerous penny stock enterprises across a number of industries, but the thing that is in common among all of them is that they're not particularly successful. Because of the connections to companies like Alumifuel Power Corp (OTCMKTS:AFPW) and SurgLine International Inc (OTCMKTS:SGLN), some investors preferred to sit this one out. They are most likely feeling pretty happy about themselves at the moment.

The hype and excitement around FFFC's new marijuana-related business plan was pretty strong at the beginning, but it slowly subsided. At the same time, the share structure was being absolutely crushed under the weight of grand-scale dilution. In a matter of just eleven months, FFFC issued nearly 7.2 billion shares as a conversion of around $790 thousand worth of debt (bringing the average conversion rate down to just over $0.0001 per share).

A couple of months ago, the inevitable 1 for 600 reverse split came, but instead of keeping calm, the stock plummeted back down in sub-penny levels almost immediately. All in all, the people who jumped in on the marijuana hype from Q1 of last year were left pretty much empty-handed.

FFFC was juddered back to life on Wednesday when, in a matter of six and a half hours, it managed to gain a massive 919%. As we mentioned yesterday, the surge was triggered by a Yahoo! Finance interview with Tommy Chong – an actor and cannabis activist whose GreenCard will be produced, promoted, and sold by FFFC.

Sadly, if yesterday's session is anything to go by, the hype and excitement may prove to be insufficient once again. FFFC lost about 35% of its value and it finished the day at $0.017 per share.

Some people will probably tell you that, in light of Wednesday's massive jump, a little bit of consolidation is only normal, but there is one more thing that could have contributed to the slide. We're talking about the fact that FFFC's printing press is still churning out a significant amount of stock.

As you can see from this 8-K form from February, the 1 for 600 reverse split brought FFFC's O/S count from 8.6 billion all the way down to around 14.3 million. Around 2PM yesterday, Pure Energy 714 LLC, an entity that holds FFFC convertible notes, filed a Schedule 13 form and announced that it controls 3.2 million shares which represent 9.6% of the currently outstanding stock.

Those of you who are quick with the calculator know what this means. For those who are not – it means that there are 33,831,906 shares issued and outstanding at the moment. In other words, it means that FFFC's shares structure has been diluted by about 135% in a matter of just over two months.

We don't know about you, but a particular exclamation comes to our minds. It goes like this: “Here we go again...

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