Fastfunds Financial Corporation (OTCMKTS:FFFC) Enters the Cannabis Business, Stock Explodes
Over the past few months, Fastfunds Financial Corporation (OTCMKTS:FFFC) has been happily hovering between $0.0001 and $0.0003 per share. Nobody was really interested in it and it appeared that nothing is capable of digging it out of these levels. Yesterday, however, it absolutely exploded.
The 200% in daily gains are not that remarkable for a triple zero ticker, but the volume is absolutely astonishing. More than 2.3 billion shares changed hands bringing the trade value to over $1.1 million.
Luckily, this wasn’t caused by a paid promotion. We’ve seen FFFC go through a couple of awareness campaigns and we know for a fact that it’s far from the best performer. But if it isn’t the pumpers, then what is causing all the stir?
Apparently, FFFC have been taken over by the hype around the marijuana industry and it seems that they want a piece of the action. About an hour and a half before the start of yesterday’s session, they announced that they have formed a subsidiary called Cannabis Angel, Inc. As the name would suggest, the new daughter company is going to provide funding for various businesses working in the marijuana industry. Sounds good – there’s certainly quite a lot of enthusiasm around the cannabis business and analysts say that the sector is about to experience major growth.
The thing is, if FFFC are going to help start-up companies with some fresh financing, they will need to have some money of their own. The latest 10-Q covers the period ended September 30, 2013, and it shows that they might have some serious issues. Here’s a summary of the most important figures:
- cash: $2,129
- current assets: $56 thousand
- current liabilities: $10 million
- quarterly revenues: $7,646
- quarterly net loss: $228 thousand
They did announce that they have reached an agreement with a Minneapolis-based private equity fund, but the fact that they’re reluctant to share the name of their new partners coupled with the flurry of optimistic press releases that have resulted in less than $10 thousand in quarterly revenues certainly raise some suspicion.
All in all, the management team will first need to convince us that they’re able to dig their own company out of the financial mess before committing to funding smaller, start-up businesses.
And since we’re on the subject of the management team, we should note that there was one more event that happened yesterday. A few minutes after the end of the intense session, FFFC filed an 8-K form which informs us that Barry Hollander has resigned from his position as acting CEO and will be succeeded by Henry Fong.
If you’ve been following our articles closely, you know that this isn’t Mr. Fong’s first stint at FFFC‘s helm. You also know that he was once involved with a company called Alumifuel Power Corp (OTCMKTS:AFPW) (whose financial situation is just as dismal as FFFC‘s).
Mr. Fong and Mr. Hollander’s names can be found in the filings of some other penny stocks as well. One of which is SurgLine International Inc (OTCMKTS:SGLN) – an OTC company that got a temporary suspension order from the SEC back in 2012 due to questions regarding the adequacy and accuracy of the publicly available information about them.
Some interesting facts, you would agree, and we reckon that they certainly warrant quite a lot of extra caution. Doing your own due diligence and carefully considering the dangers around FFFC is, as always, absolutely essential.
