Fastfunds Financial 10-Q 2010 Q2 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.

FORM 10-Q

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934   For the quarter ended June 30, 2010

¨ TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934   For the transition period from _______to_______

Commission File No. 000-33053

FASTFUNDS FINANCIAL CORPORATION

 (Exact Name of Registrant as Specified in its Charter)

Nevada	87-0425514
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

319 Clematis Street, Suite 703

West Palm Beach, Florida 33401

 (Address of principal executive offices) (Zip code)

(561) 514-9042

(Registrant's telephone number including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. xYes  ¨No

Indicate by a check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer¨	Accelerated filer¨
Non-accelerated filer¨	Smaller reporting companyx

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b.2 of the Exchange Act). ¨Yes  xNo

Number of shares of common stock outstanding at July 30, 2010: 10,212,456

FASTFUNDS FINANCIAL CORPORATION AND SUBSIDIARIES

PART I	FINANCIAL INFORMATION		Page
	Item 1.	Financial statements:
		Condensed consolidated balance sheets - June 30, 2010 (unaudited) and December 31, 2009	2
		Condensed consolidated statements of operations three and six months ended June 30, 2010 and 2009 (unaudited)	3
		Condensed consolidated statement of changes in stockholders' equity deficiency - six months ended June 30, 2010 (unaudited)	4
		Condensed consolidated statements of cash flows – six months ended June 30, 2010 and 2009 (unaudited)	5
		Notes to condensed consolidated financial statements (unaudited)	6-16
	Item 2.	Management's discussion and analysis of financial condition and results of operations	17-21
	Item 3.	Quantitative and qualitative disclosures of market risk	21
	Item 4.	Disclosure controls and procedures	22
PART II	OTHER INFORMATION
	Item 1.	Legal proceedings	23
	Item 2.	Unregistered sales of equity securities and use of proceeds	23
	Item 3.	Defaults upon senior securities	23
	Item 4.	Submission of matters to a vote of security holders	23
	Item 5.	Other information	23
	Item 6.	Exhibits	23
	Signatures

F-1

FASTFUNDS FINANCIAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
	June 30,				December 31,
	2010				2009
ASSETS
Current assets:
Cash and cash equivalents		$	263		$	421
Accounts receivable, net of allowance of $60 (2010) and $8,916 (2009)			77,381			73,223
Current portion of notes and advances receivable (Note 3)			139,575			139,575
Other current assets			4,213			4,213
Total current assets			221,432			217,432
Accounts receivable			105,000			105,000
Intangible and other assets			200			200
			105,200			105,200
		$	326,632		$	322,632
LIABILITIES AND STOCKHOLDERS' EQUITY DEFICIENCY
Current liabilities:
Cash overdraft		$	-		$	1,257
Accounts payable			781,365			785,563
Due to HPI (Note 6)			75,000			75,000
Accrued expenses, including related parties $479,639 (2010) and $383,116 (2009) (Note 4)			2,416,554			2,053,121
Promissory notes and current portion of long-term debt (Note 5), including related parties
of $602,575 (2010) and $532,872 (2009)			2,765,319			2,729,316
Litigation contingency (Note 6)			2,484,922			2,484,922
Derivative liabilities (Notes 5 and 7)			648,000			648,000
Total current liabilities			9,171,160			8,777,179
Commitments and contingencies (Notes 4, 5, 6 and 7)
Stockholders' equity deficiency (Note 9):
Preferred stock, $.001 par value; 5,000,000 shares authorized; no shares issued and
outstanding
Common stock, $.001 par value; 250,000,000 shares authorized; 19,129,800 shares issued
and 10,212,456 shares outstanding			19,130			19,130
Additional paid-in capital			17,216,715			17,216,715
Notes, advances and interest receivable, related parties			(102,166	)		(152,566	)
Common treasury stock at cost; 8,917,344 shares			(4,547,845	)		(4,547,845	)
Accumulated deficit			(21,430,362	)		(20,989,981	)
Total stockholders' equity deficiency			(8,844,528	)		(8,454,547	)
		$	326,632		$	322,632

See notes to condensed consolidated financial statements.

F-2

FASTFUNDS FINANCIAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
	Three months ended June 30,							Six months ended June 30,
	2010				2009			2010			2009
Fee revenue, net		$	11,569		$	14,337		$	27,523		$	28,564
Operating expenses:
Processing fees			11,069			11,714			22,294			23,847
Returned checks (collected)			(633	)		(3,010	)		(2,390	)		(4,791	)
Other			3,203			3,604			6,144			7,526
Total operating expenses			13,639			12,308			26,048			26,582
Gross profit			(2,070	)		2,029			1,475			1,982
Selling, general and administrative			(98,099	)		(187,158	)		(206,657	)		(325,068	)
Loss from operations			(100,169	)		(185,129	)		(205,182	)		(323,086	)
Other income (expense):
Litigation contingency			-			(2,434,922	)		-			(2,434,922	)
Interest expense including related party interest of $10,006
(2010) and $6,877 (2009) for the three months and
$18,963 (2010) and $13,053 (2009) for the six months			(118,139	)		(116,402	)		(235,199	)		(233,858	)
Total other expense			(118,139	)		(2,551,324	)		(235,199	)		(2,668,780	)
Net loss		$	(218,308	)	$	(2,736,453	)	$	(440,381	)	$	(2,991,866	)
Net loss per share		$	(0.02	)	$	(0.27	)	$	(0.04	)	$	(0.33	)
Weighted average number of common shares outstanding
Basic and diluted			10,212,456			10,056,768			10,212,456			9,121,297

See notes to condensed consolidated financial statements.

F-3

FASTFUNDS FINANCIAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY DEFICIENCY
SIX MONTHS ENDED JUNE 30, 2010 (UNAUDITED)
									Notes,
									advances and
						Additional			and interest												Total
	Common stock					paid-in			receivable,				Common stock				Accumulated				stockholders'
	Shares		Amount			capital			related parties				treasury				deficit				equity deficiency
Balances, January 1, 2010		19,129,800		$	19,130		$	17,216,715		$	(152,566	)		$	(4,547,845	)		$	(20,989,981	)		$	(8,454,547	)
Decrease in notes and advances receivable due
from related parties, net (Note 7)											50,400												50,400
Net loss																			(440,381	)			(440,381	)
Balances, June 30, 2010		19,129,800		$	19,130		$	17,216,715		$	(102,166	)		$	(4,547,845	)		$	(21,430,362	)		$	(8,844,528	)

See notes to condensed consolidated financial statements.

F-4

FASTFUNDS FINANCIAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS JUNE 30, 2010 AND 2009 (UNAUDITED)
	2010			2009
Net cash used in operating activities	$	(34,904	)	$	(76,428	)
Cash flows from investing activities:
Repayments on notes and interest receivable		-			-
Net cash provided by investing activities		-			-
Cash flows from financing activities:
Increase (decrease in) in checks issued in excess of cash in bank		(1,257	)		-
Borrowings on notes and loans payable		71,003			80,150
Repayments on notes and loans payable		(35,000	)		(3,600	)
Net cash provided by financing activities		34,746			76,550
Net increase in cash and cash equivalents		(158	)		122
Cash and cash equivalents, beginning		421			536
Cash and cash equivalents, ending	$	263		$	658
Supplemental disclosure of cash flow information:
Cash paid for interest	$	-		$	4,608
Cash paid for income taxes	$	-		$	-
Supplemental disclosure of non-cash investing and financing activities:
Conversion of convertible debentures and accounts payable to common stock	$	-		$	-
Conversion of derivative liability to common stock	$	-		$	-

See notes to condensed consolidated financial statements.

F-5

FASTFUNDS FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2010 (UNAUDITED)

1. Business and organization, basis of presentation, asset sale and management’s plans:

Business and organization:

FastFunds Financial Corporation (“FFFC” or the “Company”) is a holding company, and through January 31, 2006, operated primarily through its wholly-owned subsidiary Chex Services, Inc. (“Chex”).  As disclosed in the December 31, 2009 Form 10-K, FFFC also has several other non-operating wholly-owned subsidiaries.  FFFC and its subsidiaries are referred to as (the “Company”). The Company is an equity investee of Hydrogen Power, Inc. (“HPI”), a public company formerly known as Equitex, Inc.

Chex, a Minnesota corporation, provided financial services prior to the sale of substantially all of Chex’s assets, which primarily consisted of check cashing, automated teller machine (ATM) access, and credit card advances to customers primarily at Native American owned casinos and gaming establishments (the “Asset Sale”).

Basis of presentation:

Unaudited financial statements:

The accompanying condensed consolidated financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments necessary to present the financial position, results of operations and cash flows for all stated periods have been made.  Except as described below, these adjustments consist only of normal and recurring adjustments. Certain information and note disclosures normally included in the Company’s annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with a reading of the Company’s consolidated financial statements and notes thereto included in the Company&# 8217;s Form 10-K annual report filed with the Securities and Exchange Commission (SEC) on April 15, 2009.  Interim results of operations for the three and six months ended June 30, 2010 and 2009 are not necessarily indicative of future results for the full year.  Certain amounts from the 2009 periods have been reclassified to conform to the presentation used in the current period.

Asset sale:

On December 22, 2005, FFFC and Chex entered into an Asset Purchase Agreement (the “APA”) with Game Financial Corporation (“Game”), pursuant to which FFFC and Chex agreed to sell all of its cash access contracts and certain related assets, which represented substantially all the assets of Chex. Such assets also represented substantially all of the operating assets of the Company on a consolidated basis. On January 31, 2006, FFFC and Chex completed the Asset Sale for $14 million pursuant to the APA and received net cash proceeds of $12,642,784 and realized a pre-tax book gain of $4,145,835.  As a result of the Asset Sale, the Company has no substantial continuing operations.

On March 14, 2006, FFFC loaned HPI $5 million of the total proceeds from the Asset Sale for one year at 10% per annum interest.  This note was settled as part of the Redemption Agreement described below.

F-6

FASTFUNDS FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2010 (UNAUDITED)

1. Business and organization, basis of presentation, asset sale and management’s plans (continued)

Going concern and management’s plans:

Pursuant to the APA, FFFC and Chex owed Game approximately $300,000.  Game, FFFC and Chex agreed to settle the balance due for $275,000 with payment terms.  FFFC and Chex have not made any of the payments stipulated in the settlement, and subsequently, Game filed a complaint against Chex, FFFC and HPI seeking approximately $318,000.  The Company has agreed to a judgment of $275,000 plus interest and attorney fees for a total of $329,146 (included in accounts payable and accrued expenses in the balance sheet presented herein).  FFFC and Chex have agreed to indemnify HPI.

In the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009, the Report of the Independent Registered Public Accounting Firm includes an explanatory paragraph that describes substantial doubt about the Company’s ability to continue as a going concern.  The Company’s interim financial statements for the three and six months ended June 30, 2010 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.  The Company reported a net loss of $440,381 for the six months ended June 30, 2010 and has a working capital deficit of approximately $8,950,000 and accumulated deficit of approximately $21,430,000 as of June 30, 2010.  Moreover, the Company presently has no significant ongoing business operations or sources of revenue and has little resources with which to obtain or develop new operations.

These factors raise substantial doubt about the Company’s ability to continue as a going concern.  The financial statements do not contain any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Currently, the Company does not have a revolving loan agreement with any financial institution, nor can the Company provide any assurance it will be able to enter into any such agreement in the future, or be able to raise funds through further issuance of debt or equity in the Company.

The Company evaluates, on an ongoing basis, potential business acquisition/restructuring opportunities that become available from time to time, which management considers in relation to its corporate plans and strategies.

In May 2008, FFFC signed an Agreement and Plan of Merger and Reorganization and a related   Addendum (together the “Merger Agreement”) to acquire Industrial Systems, Inc. ("ISI"). ISI, founded in 1991 and based in Delta, Colorado, provides turn-key engineering procurement and construction services to the mining, energy and natural resources industries throughout the United States. The Merger Agreement calls for FFFC to acquire 100% of the outstanding securities of ISI in an all stock tax-free exchange, whereby the existing stockholders of ISI will own approximately 80% of the Company's common stock at closing of the transaction. Completion of the transaction is subject to FFFC having no liabilities on its balance sheet unless mutually agreed upon, as well as further due diligence by each party, and other cust omary pre-closing conditions.  The Company was not able to meet the conditions to close the transaction and Merger Agreement expired. However, ISI and the Company on March 9, 2010 re-signed the Merger Agreement under similar terms and conditions and expired on June 30, 2010.

F-7

FASTFUNDS FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2010 (UNAUDITED)

1. Business and organization, basis of presentation, asset sale and management’s plans (continued)

Return of Company Common Stock from HPI:

On January 2, 2007, pursuant to the terms of a Redemption, Stock, Sale and Release Agreement (the “Redemption Agreement”) by and between HPI and the Company, the Company (i) redeemed 8,917,344 shares of FFFC’s common stock held by HPI, (ii) acquired from HPI an aggregate of 5,000 shares of common stock of Denaris Corporation, a Delaware corporation (“Denaris”), (iii) acquired from HPI an aggregate of 1,000 shares of common stock of Key Financial Systems, Inc., a Delaware corporation (“Key Financial”), and (iv) acquired from HPI an aggregate of 1,000 shares of common stock of Nova Financial Systems, Inc., a Delaware corporation (“Nova Financial”).  Denaris was a majority owned subsidiary of HPI, and Key Financial and Nova Financial were wholly owned subsidiaries of HPI. 0; Denaris, Key Financial and Nova Financial do not have significant operations.  The shares of common stock of each entity transferred by HPI pursuant to the Redemption Agreement constituted all of HPI’s holdings in each entity.  In consideration of the redemption and acquisition of the shares of Denaris, Key Financial and Nova Financial, FFFC released HPI from all outstanding payment obligations of HPI to the Company which totaled $5,814,617, including obligations under a Secured Promissory Note dated March 14, 2006 in favor of the Company in the principal face amount of $5,000,000 (the “FastFunds Note”).  The outstanding balance on the FastFunds Note, including principal and interest accrued, as of the date of the Redemption Agreement was $5,402,398.  HPI released the Company from all payment obligations of the Company to HPI, which totaled $2,151,572.  The Company allocated the difference between the value of the assets received and the consideration exchanged as an increase to additional paid-in capital.

After the closing of the Redemption Agreement, HPI held 3,500,000 shares of FFFC common stock, constituting approximately 43% and 34% of FFFC’s outstanding common stock at December 31, 2009 and March 31, 2010, respectively.  These shares have been pledged as collateral on certain notes of HPI.  During 2008 as a result of the payment of this debt by HPI Partners, LLC.,(“HPIP”) and the subsequent foreclosure by the debt holders upon HPIP, HPIP owns the 3.5 million shares of FFFC common stock. The principal managers of HPIP are Messrs. Fong and Olson.  Mr. Fong is the Chairman and CEO of FFFC and Mr. Olson is the secretary of FFFC.  As of March 31, 2010, the Company holds 1,546,036 shares of common stock of HPI.  Pursuant to the Redemption Agreement, the Company and HPI e ach provided the other certain registration rights relating to the common stock of such party held by the other party.

On January 18, 2008, the Company filed a complaint in the Superior Court of Washington in King County (the “Superior Court”). The complaint was filed by FastFunds Financial Corporation, Daniel Bishop, Barbara M. Schaper, HP Services LLC, VP Development Corporation, and Gulfstream Financial Partners, LLC (collectively, the “Plaintiffs”) against Dilbagh Singh Gujral, Ricky Gurdish Gujral, Virendra Chaudhary, Gurinder Dilawari, Global Hydrofuels Technology, Inc. (“GHTI”) and Hydrogen Power, Inc. (collectively, the “Defendants”).

MMessrs. Chaudhary and Dilawari are directors of HPI. GHTI is the majority shareholder of HPI. Ricky Gurdish Gujral is the former chief executive officer of HPI. The complaint alleges fraud, misappropriation of corporate opportunity and breach of fiduciary duty by the Defendants relating to the merger of Equitex, Inc. and Hydrogen Power, Inc., the Sublicense Agreement with GHTI, and payments to Ricky Gurdish Gujral. The complaint seeks the appointment of a receiver to take possession of the property and assets of the Company and to manage and operate the Company pending completion of the action. The complaint also seeks damages in the excess of $3,000,000, exemplary damages, attorney’s fees plus interest and costs and any other relief the court finds just

F-8

FASTFUNDS FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2010 (UNAUDITED)

1. Business and organization, basis of presentation, asset sale and management’s plans (continued)

Return of Company Common Stock from HPI:

and proper.  On January 25, 2008, the Superior Court appointed a receiver of HPI with respect to HPI’s assets. Some assets have been recovered by the Receiver. One of the defendants has filed a counterclaim asserting that the action is frivolous; the Plaintiffs have denied the counterclaim in its entirety.  GHTI has sought arbitration regarding ownership of certain patent applications and other intellectual property.  GHTI was granted a stay of this case until the arbitration is complete.

On March 25, 2010 the Defendants and Plaintiffs entered into a Settlement Agreement and Mutual Release (the “Settlement Agreement”).  Pursuant to the Settlement Agreement, which is subject to the approval of the receiver and the Court, the Defendants and Plaintiffs have agreed to release each other from the claims and to have no further suits against each other.  Additionally, the Defendants have agreed to assign to the Receiver for the benefits of the Plaintiffs any and all rights, including but not limited to insurance payments and settlements for any and all officers and directors liability insurance policies.

2. Summary of significant accounting policies:

A summary of our significant accounting policies is included in our 2009 Annual Report on Form 10-K.

Net loss per share:

Net loss per share of common stock is computed based on the weighted average number of common shares outstanding during the period. Stock options, warrants and common stock underlying convertible promissory notes at June 30, 2010 and 2009 were 2,213,824 and 5,337,898, respectively, and are not considered in the calculation for the three and six months ended June 30, 2010 and 2009, as the impact of the potential common shares would be to decrease loss per share.  Therefore, diluted loss per share for the three and six months ended June 30, 2010 and 2009 is equivalent to basic loss per share.

Recently issued accounting pronouncements:

In January 2010, FASB issued ASU No. 2010-06, Fair Value Measurements and Disclosures (ASC Topic 820), Improving Disclosures about Fair Value Measurements. This update provides amendments to ASC Topic 820 that will provide more robust disclosures about (1) the different classes of assets and liabilities measured at fair value, (2) the valuation techniques and inputs used, (3) the activity in Level 3 fair value measurements, and (4) the transfers between Levels 1, 2, and 3. This standard is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning af ter December 15, 2010, and for interim periods within those fiscal years.  This standard is not currently applicable to the Company.

In January 2010, FASB issued ASU No. 2010-05, Compensation – Stock Compensation (ASC Topic 718), Escrowed Share Arrangements and the Presumption of Compensation. This update codifies Emerging Issues Task Force D-110. This standard is not currently applicable to the Company.

In January 2010, FASB issued ASU N0. 2010-01, Equity (ASC Topic 505), Accounting for Distributions to Shareholders with Components of Stock and Cash. The update clarifies that the

F-9

FASTFUNDS FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2010 (UNAUDITED)

2.  Summary of significant accounting policies (continued):

Recently issued accounting pronouncements (continued):

stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a potential limitation on the total amount of cash that all shareholders can elect to receive in the aggregate is considered a share issuance that is reflected prospectively in earnings per share and is not considered a stock dividend for purposes of ASC Topic 505 and Topic 260, Earnings Per Share. This standard is effective for interim and annual periods ending on or after December 15, 2009, and should be applied on a retrospective basis.  This standard is not currently applicable to the Company.

In May 2009, the FASB issued ASC 855-10, “Subsequent Events”, (formerly SFAS No. 165,   “Subsequent Events,” which establishes general standards for accounting for and disclosure of events that occur after the balance sheet date but before the financial statements are issued or are available to be issued. The pronouncement requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date, whether that date represents the date the financial statements were issued or were available to be issued.  In conjunction with the preparation of these financial statements, an evaluation of subsequent events was performed through May 14 , 2010, which is the date the financial statements were issued.    No reportable subsequent events were noted.

In June 2009, the Financial Accounting Standards Board (“FASB”) issued Codification Accounting Standards Update No. 2009-1 (“ASU No. 2009-1”), an amendment based on Statement of Financial Accounting Standard No. 168, The FASB Accounting Standards Codification (“Codification”) and the Hierarchy of Generally Accepted Accounting Principles — a replacement of FASB Statement No. 162, The Hierarchy of Generally Accepted Accounting Principles, under Topic 105, Generally Accepted Accounting Principles. Under this update, the Codification has become the source of US GAAP recognized by the FASB to be applied by nongovernmental entities. The rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registra nts. On the effective date of ASU No. 2009-1, the Codification superseded all then-existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the Codification has become non-authoritative. The provisions of ASU No. 2009-1 are effective for financial statements issued for interim and annual periods ending after September 15, 2009. All accounting references have been updated and therefore all FAS references have been replaced with ASC references.

In August 2009, the FASB issued Codification Accounting Standards Update No. 2009-5 (“ASU No. 2009-5”), Measuring Liabilities at Fair Value, under Topic 820, Fair Value Measurements and Disclosures, to provide guidance on the fair value measurement of liabilities. This update provides clarification in circumstances in which a quoted price in an active market for the identical liability is not available. It also clarifies the inputs relating to the existence of a restriction that prevents the transfer of the liability and clarifies that both a quoted price in an active market for the identical liability at the measurement date and the quoted price for the identical liability when traded as an ass et in an active market when no adjustments to the quoted price of the asset are required are Level 1 fair value measurements. ASU No. 2009-5 is effective for financial statements issued for interim and annual periods beginning after its issuance. The adoption of ASU No. 2009-5 did not have a material impact on our financial statements.

3. Notes and interest receivable:

Notes and interest receivable at June 30, 2010 and December 31, 2009, consist of the following:

F-10

FASTFUNDS FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2010 (UNAUDITED)

3.  Notes and interest receivable (continued):

	June 30,			December 31,
	2010			2009
Note receivable, ISI; interest at 6%; matured April 2007; currently in default	$	50,000		$	50,000
Note receivable (Denaris) from Paymaster Jamaica (see Redemption Agreement) (Note 1); interest at 10%, collateralized by a pledge of Paymaster Jamaica common shares by Paymaster Jamaica's president; note matured August 15, 2008; payments of interest only due semi-annually beginning August 15, 2003 through maturity; a valuation allowance of $250,000 has been recorded against this receivable at June 30, 2010 and December 31, 2009		339,575			339,575
Note receivable from Coast ATM, LLC; interest at 10%; matured November 2005; currently in default; a valuation allowance of $50,000 has been recorded against this receivable at June 30, 2010 and December 31, 2009; is in default and non-performing		50,000			50,000
		439,575			439,575
Less current maturities		(139,575	)		(139,575	)
Notes and advances receivable, net of current portion, before valuation allowance		300,000			300,000
Less valuation allowance		(300,000	)		(300,000	)
Notes receivable, long-term	$	-		$	-

4.  Accrued liabilities:

Accrued liabilities at June 30, 2010 and December 31, 2009 were $2,416,554 and $2,053,121, respectively, and were comprised of:

	2010		2009
Legal fees	$	385,607	$	355,606
Interest		1,341,548		1,106,349
Accounting fees		13,458		14,258
Consultants and advisors		317,550		240,150
Director’s fees		166,659		154,159
Registration rights		98,013		98,013
Other		93,719		84,586
	$	2,416,554	$	2.053,121

F-11

FASTFUNDS FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2010 (UNAUDITED)

5. Promissory notes, including related and current portions of long-term debt:

Promissory notes, including related parties and current portions of long-term debt at June 30, 2010 and December 31, 2009, consist of the following:

	June 30,		December 31,
	2010		2009
Promissory notes payable:
Various, including related parties of $602,075 (2010) and $532,872 (2009), interest rate ranging from 8% to 10%	$	674,600	$	638,597
Notes payable; interest rates ranging from 9% to 15%; interest payable quarterly; the notes are unsecured, matured on February 28, 2008; currently in default and past due  [A]		2,090,719		2,090,719
	$	2,765,319	$	2,729,316

 [A] These notes payable (the “Promissory Notes”) originally became due on February 28, 2007.  The Company renewed $283,000 of the Promissory Notes on the same terms and conditions as previously existed.  In April 2007 the Company, through a financial advisor, restructured $1,825,000 of the Promissory Notes (the “Restructured Notes”).  The Company has accrued an expense of $36,500 to compensate the financial advisor 2% of the Restructured Notes as well as having issued 150,000 shares of common stock to the financial advisor.  The Restructured Notes carry a stated interest rate of 15% (a default rate of 20%) and matured on February 28, 2008.  The Company has not paid the interest due since June 2007, and no principal payments on the Promissory Notes have been made in 2008 and 2009 and accordingly, they are in default.

The chairman of the board of the Company has personally guaranteed up to $1 million of the Restructured Notes and two other non-related individuals each guaranteed $500,000 of the Restructured Notes.  In consideration of their guarantees the Company granted warrants to purchase a total of 1,600,000 shares of common stock of the Company at an exercise price of $0.50 per share.  The warrants were exercisable through March 2010, and have now expired.  The warrants were valued at $715,200 using the Black-Scholes option pricing model and have been amortized over the one-year term of the Restructured Notes.

In January 2008, the Company and the three guarantors received a complaint filed by the financial advisor (acting as agent for the holders of the Restructured Notes) and the holders of the Restructured Notes.  The claim is seeking $1,946,250 plus per diem interest beginning January 22, 2008 at the rate of twenty percent (20%) per annum plus $37,000 due the financial advisor for unpaid fees.The court has ruled in favor of a motion for summary judgment filed by certain of the plaintiffs have had a  judgment entered in the total amount of $2,487,250 in principal and interest on the notes, $40,920 in related claims and $124,972 in attorney’s fees and expenses.  The judgment was entered on August 18, 2009.

F-12

FASTFUNDS FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2010 (UNAUDITED)

5. Promissory notes, including related and current portions of long-term debt (continued):

The fair market value of each stock option was estimated on the date of grant using the Black-Scholes option-pricing model in accordance with SFAS No. 123R using the following weighted average assumptions:

Expected dividend yield	Risk-free interest rate	Volatility	Expected term
0%	4.23%	116%	5 years

6.  Commitments and contingencies:

Litigation:

The Forest County Potawatomi Community (“FCPC”) has initiated an action against Chex, an inactive subsidiary of the Company, in the FCPC tribal court asserting that Chex breached a contract with FCPC during the 2002 to 2006 time period.  Chex is inactive and did not defend this action. On October 1, 2009 a judgment was entered against Chex in the FCPC Tribal Court in the amount of $2,484,922. The Company has included $2,484,922 in other income (expenses) for the year ended December 31, 2009.

The Company is involved in various other claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse impact either individually or in the aggregate on consolidated results of operations, financial position or cash flows of the Company.

Operating lease:

Beginning February 2007, the Company began leasing office space in West Palm Beach, Florida, its corporate headquarters for approximately $2,900 per month.  This lease expired in January 2010, and the Company amended the lease effective February 1, 2010 whereby the monthly rent is approximately $1,800 per month.  The amended lease expires January 31, 2011, however either party can terminate the lease with sixty (60) day notice to the other party. Pursuant to this lease, the Company is also required to pay its pro-rata share of taxes, operating expenses and improvement costs.

Guaranty:

Future approximate minimum lease payments due under this lease as of June 30, 2010, are as follows:

Year ending December 31,	Amount
2010	10,800
	$     10,800

F-13

FASTFUNDS FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2010 (UNAUDITED)

6.  Commitments and contingencies (continued):

Consulting agreements:

In conjunction with the Asset Sale, a former FFFC director and Chex officer signed a five-year non-compete agreement with the buyer and also signed a release, waiving his right to any future commissions that he was previously entitled to.  The Company agreed to compensate the officer $100,800 annually, over the five-year term of the non-compete agreement.  Such compensation is to be applied to reduce the loan and interest receivable due from the officer (Note 7).  If the officer breaches his non-compete agreement, the officer is no longer entitled to compensation and will be liable for any amount remaining on the loan.  During the six months ended June 30, 2010 and 2009, the Company recorded consulting expenses of $50,400 and the note receivable from an officer has been reduced by $50,400, for th e six months ended June 30, 2010.

In March 2004, HPI closed on $5 million of debt financing and issued convertible promissory notes to two financial institutions (the “Lenders”).  The proceeds from the promissory notes were immediately thereafter loaned to Chex.  The promissory notes are collateralized, among other things, by all of the assets of Chex and HPI, including the 3.5 million shares of FFFC common stock owned by HPI.  In conjunction with the Asset Sale, the Lenders consented to the sale of assets that secured their notes.  In contemplation of the Redemption Agreement described above, on December 29, 2006, HPI and the Company obtained the consent of the Lenders to complete the transactions contemplated by the Redemption Agreement. Contemporaneously with receipt of the consent, FFFC (as successor in interest t o Chex) reconfirmed its obligations under the guaranty and security agreements previously provided by Chex.  The guaranty and security agreements do not expire until the notes are paid in full.    On August 6, 2007, HPI received a notice of default from the Lenders.  On August 16, 2007, the Lenders and HPI entered into a Forbearance Agreement in consideration of HPI paying $300,000 (paid on August 14, 2007) and making a final payment (the “Final Payment”) of $646,981 by October 15, 2007.  During the fourth quarter of 2007 $100,000 of the Final Payment was paid, and there remained an unpaid balance of principal and interest of approximately $561,000.  On March 11, 2008, the Lenders notified the court appointed receiver of HPI that that they were foreclosing on the assets of HPI that were collateralizing the loan.  During 2008 HPIP paid the balance and accordingly purchased FFFC’s guaranty and asset pledge.

HPI Stock Price Guaranty:

In May 2006, HPI and the Company negotiated a settlement regarding convertible notes with a face value of $200,000 issued by the Company, whereby HPI issued 180,000 shares of its common stock. In connection with the Settlement Agreement, a Stock Sale and Lock-up Agreement, Registration Agreement and an Escrow Agreement were also entered into (the “Agreements”).   Terms of the Agreements stipulate a price protection clause whereby the Company under certain circumstances must reimburse the former debt holders if the market price of the HPI common stock issued to them in the settlement is below $4.00 per share at the time they sell the stock.  As a result, the Company has recorded a derivative liability due to the debt holders at June 30, 2010 and December 31, 2009 of $648,000.

7.  Stockholders’ equity deficiency:

Notes, advances and interest receivable from related parties:

Chex has notes receivable due from related parties under various loan agreements.  In addition, the Company has made advances to HPI to fund its operations. In accordance with the Securities Exchange Commission’s Staff Accounting Bulletin No. 79, Allocation of Expenses and Related

F-14

FASTFUNDS FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2010 (UNAUDITED)

7.  Stockholders’ equity deficiency (continued):

Notes, advances and interest receivable from related parties (continued):

Disclosure in Financial Statements of Subsidiaries, Divisions or Lessor Business Components of Another Entity, certain expenses paid by the Company on behalf of HPI have been charged to the receivables.

The following table summarizes the activity for the year ended December 31, 2009 and for the three months ended June 30, 2010:

	June 30,			December 31,
	2010			2009
Beginning principal balances	$	152,566		$	253,366
Consulting fees applied to officer receivable		(50,400	)		(100,800	)
Ending principal balances [A]	$	102,166		$	152,566

[A]                 The principal balance at June 30, 2010 and December 31, 2009 are all due from a former Chex officer.

Warrants and options:

The Company did not issue any warrants or options for the six months ended June 30, 2010.  A summary of outstanding warrant balances at January 1, and June 30, 2010 is as follows:

	Warrants	Weighted-Average exercise price	Weighted- Average grant date fair value
Outstanding at January 1, 2010	4,033,824	$             0.39	$0.34
Expired	(2,150,000)	0.50	0.46
Outstanding at June 30, 2010	1,883,824	$             0.25	$0.12

Options are generally granted with an exercise price equal to the Company’s market price of its common stock on the date of the grant and vest immediately upon issuance.  All options outstanding at June 30, 2010 are fully-vested and exercisable.  A summary of outstanding balances at January 1, and June 30, 2010 is as follows:

F-15

FASTFUNDS FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2010 (UNAUDITED)

7.   Stockholders’ equity deficiency (continued):

Warrants and options (continued):

	Options	Weighted-Average exercise price	Weighted-Average remaining contractual life	Aggregate intrinsic value
Outstanding at January 1 and June 30,2010	330,000	$    1.03	5.73	$          -

F-16

ITEM TWO

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

THIS REPORT MAY CONTAIN CERTAIN "FORWARD-LOOKING" STATEMENTS AS SUCH TERM IS DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 OR BY THE SECURITIES AND EXCHANGE COMMISSION IN ITS RULES, REGULATIONS AND RELEASES, WHICH REPRESENT THE COMPANY'S EXPECTATIONS OR BELIEFS, INCLUDING BUT NOT LIMITED TO, STATEMENTS CONCERNING THE COMPANY'S OPERATIONS, ECONOMIC PERFORMANCE, FINANCIAL CONDITION, GROWTH AND ACQUISITION STRATEGIES, INVESTMENTS, AND FUTURE OPERATIONAL PLANS, FOR THIS PURPOSE, ANY STATEMENTS CONTAINED HEREIN THAT ARE NOT STATEMENTS OF HISTORICAL FACT MAY BE DEEMED TO BE FORWARD-LOOKING STATEMENTS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, WORDS SUCH AS "MAY", "WILL", "EXPECT", "BELIEVE", "ANTICIPATE", "INTENT", "COULD", "ESTIMATE", "MIGHT", OR "CONTINUE" OR THE NEGATIVE OR OTHER VARIATIONS THEREOF OR COMPARABLE TERMINOLOGY ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE STATEMENTS BY THEIR NATURE INVOLVE SUBSTANTIAL RISKS AND UNCERTAINTIES, CERTAIN OF WHICH ARE BEYOND THE COMPANY'S CONTROL, AND ACTUAL RESULTS MAY DIFFER MATERIALLY DEPENDING ON THE VARIETY OF IMPORTANT FACTORS, INCLUDING UNCERTAINTY RELATED TO THE COMPANY'S OPERATIONS, MERGERS OR ACQUISITIONS, GOVERNMENTAL REGULATION, THE VALUE OF THE COMPANY'S ASSETS AND ANY OTHER FACTORS DISCUSSED IN THIS AND OTHER COMPANY FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.

GENERAL

FastFunds Financial Corporation (“FFFC”) is a holding company and through January 31, 2006 operated primarily through its wholly-owned subsidiary Chex Services, Inc. (“Chex”).  As disclosed in the December 31, 2009 10-K, FFFC also has several other non-operating wholly-owned subsidiaries.  FFFC and its subsidiaries are referred to as (the “Company”).

RETURN OF COMPANY COMMON STOCK FROM PARENT:

On January 2, 2007, pursuant to the terms of a Redemption, Stock, Sale and Release Agreement (the “Redemption Agreement”) by and between HPI and the Company, the Company (i) redeemed 8,917,344 shares of FFFC’s common stock held by HPI, (ii) acquired from HPI an aggregate of 5,000 shares of common stock of Denaris Corporation, a Delaware corporation (“Denaris”), (iii) acquired from HPI an aggregate of 1,000 shares of common stock of Key Financial Systems, Inc., a Delaware corporation (“Key Financial”), and (iv) acquired from HPI an aggregate of 1,000 shares of common stock of Nova Financial Systems, Inc., a Delaware corporation (“Nova Financial”).  Denaris was a majority owned subsidiary of HPI, and Key Financial and Nova Financial were wholly owned subsidiaries of HPI. 0; Denaris, Key Financial and Nova Financial do not have significant operations.  The shares of common stock of each entity transferred by HPI pursuant to the Redemption Agreement constituted all of HPI’s holdings in each entity.  In consideration of the redemption and acquisition of the shares of Denaris, Key Financial and Nova Financial, FFFC released HPI from all outstanding payment obligations of HPI to the Company, which totaled $5,814,617 and HPI released the Company from all payment obligations of the Company to HPI, which totaled $2,151,572.  Due to the related party nature of the transaction, the Company accounted for the difference between the consideration received and the consideration given up as a capital transaction, which increased additional paid-in capital by $1,227,019.

17

OVERVIEW

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and notes thereto for the years ended December 31, 2009 and 2008.  The financial statements presented for the three and six months ended June 30, 2010 and 2009 include FFFC and its wholly-owned subsidiaries, which primarily reflect the operations of Chex through the date of the Asset Sale.

In light of the foregoing, and the Company’s sale of substantially all of its assets in January 2006, the historical data presented below is not indicative of future results. You should read this information in conjunction with the audited consolidated financial statements of the Company, including the notes to those statements (Item 8), and the following “Management’s Discussion and Analysis of Financial Conditions and Results of Operations”.

The Company’s financial statements for the three and six months ended June 30, 2010 and the year ended December 31, 2009 have been prepared on a going concern basis, which contemplates the realization of its remaining assets and the settlement of liabilities and commitments in the normal course of business.  The Company has incurred significant losses since its inception and has a working capital deficit of approximately $8,950,000 and an accumulated deficit of approximately $21,430,000 as of June 30, 2010.  Moreover, it presently has minimal ongoing business operations or sources of revenue, and little available resources with which to obtain or develop new operations.

These factors raise substantial doubt about the Company’s ability to continue as a going concern.  There can be no assurance that the Company will have adequate resources to fund future operations or that funds will be available to the Company when needed, or if available, will be available on favorable terms or in amounts required by the Company.  The consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

In May 2008, FFFC signed an Agreement and Plan of Merger and Reorganization and a related   Addendum (together the “Merger Agreement”) to acquire Industrial Systems, Inc. ("ISI"). ISI, founded in 1991 and based in Delta, Colorado, provides turn-key engineering procurement and construction services to the mining, energy and natural resources industries throughout the United States. The Merger Agreement calls for FFFC to acquire 100% of the outstanding securities of ISI in an all stock tax-free exchange, whereby the existing stockholders of ISI will own approximately 80% of the Company's common stock at closing of the transaction. Completion of the transaction is subject to FFFC having no liabilities on its balance sheet unless mutually agreed upon, as well as further due diligence by each party, and other cust omary pre-closing conditions.  The Company was not able to meet the conditions to close the transaction and Merger Agreement expired. ISI and the Company on March 9, 2010 re-signed the Merger Agreement under similar terms and conditions, however that agreement expired on June 30, 2010.

LIQUIDITY AND CAPITAL RESOURCES

For the six months ended June 30, 2010, net cash used in operating activities was $34,904 compared to $76,428 for the six months ended June 30, 2009.  Net loss was $218,308 and $440,381 for the three and six months ended June 30, 2010 compared to $2,736,453 and $2,991,780 for the three and six months ended June 30, 2009. The net loss in each of the three and six month periods includes non-cash expenses of approximately $25,200 and $50,400, respectively, related to amortization. The three and six months ended June 30, 2009 included litigation contingency expenses of $2,434,922.

There was no cash provided by or used in investing activities for the six months ended June 30, 2010, and 2009.

18

Net cash provided by financing activities for the six months ended June 30, 2010 was $34,746 compared to $76,550 for the six months ended June 30, 2009.  The activity for the six months ended June 30, 2010 is the Company received net proceeds of $71,003 on the issuance of notes payable, and repaid $35,000 of notes payable. For the six months ended June 30, 2009, the Company received proceeds of $80,150 on the issuance of notes payable, and repaid $3,600 of notes payable.

For the six months ended June 30, 2010, cash and cash equivalents decreased by $158 compared to an increase of $122 for the six months ended June 30, 2009.  Ending cash and cash equivalents at June 30, 2010 was $263 compared to $1,334 at June 30, 2009.

We have limited cash and cash equivalents on hand and need to raise funds to continue to be able to support our operating expenses and to meet our other obligations as they become due.  Sources available to us that we may utilize include the sale of our or HPI’s equity securities, as well as the exercise of outstanding options and warrants, which may cause dilution to our stockholders.

REVENUES

Total revenues for the three and six months ended June 30, 2010 were $11,569 and $27,253 compared to $14,337 and $28,564 for the three and six months ended June 30, 2009.  Revenues in all periods consist of credit card income on Nova’s remaining portfolio.

OPERATING EXPENSES

Operating expenses for the three months and six months ended June 30, 2010 were $13,639 and $26,048 compared to $12,308 and $26,582 for the three and six months ended June 30, 2009. Expenses were primarily comprised of costs related to third party servicing fees of Nova’s remaining credit card portfolio.

CORPORATE OPERATING EXPENSES

Corporate operating expenses for the three and six months ended June 30, 2010 were $98,099 and $206,657 compared to $187,158 and $325,068 for the three and six months ended June 30, 2009. The expenses were comprised of the following:

	Three months ended June 30,				Six months ended June 30,
	2010		2009		2010		2009
Stock based compensation	$	-	$	82,095	$	-	$	82,095
Accounting, legal and consulting		92,650		94,016		193,452		212,660
Other		5,449		11,047		13,205		30,313
	$	98,099	$	187,158	$	206,657	$	325,068

For the three and six months ended June 30, 2010 and 2009 corporate operating expenses are primarily related to FFFC.

Accounting, legal and consulting expenses decreased for the three and six months ended June 30, 2010 compared to the three months ended March 31, 2009. The decrease in the current period was primarily a result of decreases in legal fees.  FFFC has consulting agreements with two officers who provide various consulting services to the Company. These continuing agreements require the Company to pay approximately $13,000 per month.

Other costs included in corporate operating expenses decreased for the three and six months ended June 30, 2010 compared to the three and six months ended June 30, 2009.

19

OTHER INCOME (EXPENSE)

Other expenses, net for the three months and six ended June 30, 2010 were $118,139 and $235,199 compared to $2,551,324 and $2,668,780 for the three and six months ended June 30, 2009.  Other expenses in the three and six months ended June 30, 2009 included $2,434,922 related to litigation contingency expenses.

INCOME TAX EXPENSE

There was no income tax expense for the three and six months ended June 30, 2010 and 2009.

CONTRACTUAL OBLIGATIONS

No material changes outside the ordinary course of business during the quarter ended June 30, 2010.

CRITICAL ACCOUNTING POLICIES

Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to income taxes, contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under differ ent assumptions or conditions.

Our significant accounting policies are described in more detail in our 2009 Annual Report on Form 10-K.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In January 2010, FASB issued ASU No. 2010-06, Fair Value Measurements and Disclosures (ASC Topic 820), Improving Disclosures about Fair Value Measurements. This update provides amendments to ASC Topic 820 that will provide more robust disclosures about (1) the different classes of assets and liabilities measured at fair value, (2) the valuation techniques and inputs used, (3) the activity in Level 3 fair value measurements, and (4) the transfers between Levels 1, 2, and 3. This standard is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning afte r December 15, 2010, and for interim periods within those fiscal years.  This standard is not currently applicable to the Company.

In January 2010, FASB issued ASU No. 2010-05, Compensation – Stock Compensation (ASC Topic 718), Escrowed Share Arrangements and the Presumption of Compensation. This update codifies Emerging Issues Task Force D-110. This standard is not currently applicable to the Company.

In January 2010, FASB issued ASU N0. 2010-01, Equity (ASC Topic 505), Accounting for Distributions to Shareholders with Components of Stock and Cash. The update clarifies that the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a potential limitation on the total amount of cash that all shareholders can elect to receive in the aggregate is considered a share issuance that is reflected prospectively in earnings per share and is not considered a stock dividend for purposes of ASC Topic 505 and Topic 260, Earnings Per Share. This standard is effective for interim and annual periods ending on or after December 15, 2009, and should be applied on a retrospective basis.   This standard is not currently applicable to the Company.

20

In May 2009, the FASB issued ASC 855-10, “Subsequent Events”, (formerly SFAS No. 165,   “Subsequent Events,” which establishes general standards for accounting for and disclosure of events that occur after the balance sheet date but before the financial statements are issued or are available to be issued. The pronouncement requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date, whether that date represents the date the financial statements were issued or were available to be issued.  In conjunction with the preparation of these financial statements, an evaluation of subsequent events was performed through May 14 , 2010, which is the date the financial statements were issued.    No reportable subsequent events were noted.

In June 2009, the Financial Accounting Standards Board (“FASB”) issued Codification Accounting Standards Update No. 2009-1 (“ASU No. 2009-1”), an amendment based on Statement of Financial Accounting Standard No. 168, The FASB Accounting Standards Codification (“Codification”) and the Hierarchy of Generally Accepted Accounting Principles — a replacement of FASB Statement No. 162, The Hierarchy of Generally Accepted Accounting Principles, under Topic 105, Generally Accepted Accounting Principles. Under this update, the Codification has become the source of US GAAP recognized by the FASB to be applied by nongovernmental entities. The rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registra nts. On the effective date of ASU No. 2009-1, the Codification superseded all then-existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the Codification has become non-authoritative. The provisions of ASU No. 2009-1 are effective for financial statements issued for interim and annual periods ending after September 15, 2009. All accounting references have been updated and therefore all FAS references have been replaced with ASC references.

In August 2009, the FASB issued Codification Accounting Standards Update No. 2009-5 (“ASU No. 2009-5”), Measuring Liabilities at Fair Value, under Topic 820, Fair Value Measurements and Disclosures, to provide guidance on the fair value measurement of liabilities. This update provides clarification in circumstances in which a quoted price in an active market for the identical liability is not available. It also clarifies the inputs relating to the existence of a restriction that prevents the transfer of the liability and clarifies that both a quoted price in an active market for the identical liability at the measurement date and the quoted price for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are required are Level 1 fair value measurements. ASU No. 2009-5 is effective for financial statements issued for interim and annual periods beginning after its issuance. The adoption of ASU No. 2009-5 did not have a material impact on our financial statements.

ITEM THREE

QUANTITATIVE AND QUALITATIVE DISCLOSURES OF MARKET RISK

Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest rates and a decline in the stock market. The Company does not enter into derivatives or other financial instruments for trading or speculative purposes. The Company has limited exposure to market risk related to changes in interest rates. The Company does not currently invest in equity instruments of public or private companies for business or strategic purposes.

The principal risks of loss arising from adverse changes in market rates and prices to which the Company and its subsidiary are exposed relate to the market prices of common stock of HPI and the Company. The Company has only fixed rate debt at June 30, 2010 and December 31, 2009.

	June 30,		December 31,
	2010		2009
Derivative liabilities (1)	$	648,000	$	648,000
	$	648,000	$	648,000

21

(1) The Company has given a price guaranty under certain circumstances to former noteholders on the value of 180,000 shares of HPI common stock they received in a settlement of $4.00 per share.  At December 31, 2008 and September 30, 2009, the common stock had a market value of $0.  Accordingly, as of June 30, 2010 the Company has recorded a liability of $648,000.

ITEM FOUR

DISCLOSURE CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures (as such term is defined in Rules 13a-15(f)) are designed to ensure that information relating to us required to be disclosed with the Securities and Exchange Commission (“SEC”) reports is (i) recorded, processed, summarized and reported within the time period specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our acting chief executive officer, as appropriate to allow timely decisions requiring timely disclosure.  Under the supervision and with the participation of our Acting Chief Executive Officer, we conducted an evaluation and effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13(a)-15(e) and 15(d)-15(e) under the Securities and Exchange Act of 1934, as amended (the ̶ 0;Exchange Act”) as of the end of the period covered by this report (the “Evaluation Date”).  Based on this evaluation, our acting chief executive officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective.

Management of the Company is responsible for establishing and maintaining an adequate system of internal control over financial reporting. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes of accounting principles generally accepted in the United States.  Because of its inherit limitations, internal control over financial reporting may not prevent or detect misstatements.  Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.  In evaluating the effectiveness of our internal control over financial reporting, our management used the criteria set forth in “Intern al Control-Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).  Based on this evaluation, our management concluded, as of December 31, 2009, our internal control over financial reporting was not effective based on those criteria.  The following material weaknesses were identified from our evaluation:

Due to the small size and limited financial resources, the Company’s Secretary and the acting chief executive officer are the only individuals involved in accounting and financial reporting.  As a result, there is no segregation of duties in the accounting function, leaving all aspects of financial reporting in the hands of our Acting Chief Financial Officer and physical control of cash in the hands of the same individual as well as our Secretary.  This lack of segregation of duties represents a material weakness.  We will continue periodically review our disclosure controls and procedures and internal control over financial reporting and make modifications from time to time considered necessary or desirable.

Although this material weakness over preparation of the financial statements and related disclosures existed at the end of the quarter described in this report, the consolidated financial statements in this quarterly report on Form 10-Q fairly present in all material respects, our financial condition as of June 30, 2010 in conformity with GAAP.

This quarterly report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this report.

22

Changes in Internal Control over Financial Reporting

There has not been any change in the Company’s internal control over financial reporting in connection with the evaluation required by Rule 13a-15(d) under the Exchange Act that occurred during the quarter ended June 30, 2010 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.  The material weakness in our internal control over financial reporting described above for the year ended December 31, 2009 (absence of adequate segregation of duties) continues unremediated, due to our limited resources and employees.

PART II. OTHER INFORMATION

Item 1.              Legal Proceedings

Refer to Note 6 of the Condensed Consolidated Financial Statements

Item 2.              Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3.              Defaults upon Senior Securities

None.

Item 4.              Submission of Matters to a Vote of Security Holders

None.

Item 5.              Other Information

None.

Item 6.              Exhibits

Exhibit Number	Description
31.1	CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (Filed herewith)
32.1	CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (Filed herewith)

23

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	FastFunds Financial Corporation
	(Registrant)
Date: August 16, 2010	By: /s/ Barry Hollander
	Barry Hollander
	Acting Chief Executive Officer
	Principal Executive Officer and
	Principal Accounting Officer