FutureWorld Corp (OTCMKTS:FWDG) Falls on its Face

After months of doing virtually nothing, FutureWorld Corp (OTCMKTS:FWDG) woke up in March when the company announced that some changes are about to take place. They said that they want to spin off some of the company’s subsidiaries and announced that the shareholders will be able to reap the benefits.

First, they said that HempTech Corporation will be sold to Infrax Systems Inc (OTCMKTS:IFXY) and later, they announced that Aegea Inc (now known as FutureLand Corp (OTCMKTS:FUTL)) has agreed to acquire FutureLand Properties LLC. There was an initial volume spike and the price went up to more than $0.006 per share, but then, the momentum simply disappeared and the stock started sliding down.

It looked like investors are treading carefully, and as it turns out, there was a very good reason for this. On May 22, FWDG announced that the deal with IFXY isn’t going to happen. Naturally enough, the dividend in the form of IFXY shares was called off as well. The ticker crashed hard and fast and on June 10, it hit its 52-week low of $0.001 per share.

In light of this, the company’s latest press release came out right on time. It hit the wire on June 11 and it informed us that FWDG‘s shareholders will be able to enjoy a dividend after all. The management team said that the deal with FUTL is coming along nicely and that for every 250 FWDG shares you own, you’ll get 1 FUTL share.

The announcement caused quite a stir among investors. They scrambled for the stock once again and in a matter of just two sessions, they pushed the ticker from $0.0012 all the way to $0.0031. Unfortunately, it looks like we’re in for the same old story again. Excitement died down pretty quickly and after a couple of days of selling, FWDG finished yesterday’s session at $0.0014 per share. Investors are still not convinced and we can’t really blame them.

On the one hand, the FUTL dividend sounds good enough in theory. After all, FWDG shareholders will basically receive stock for free. What’s more, they’ll receive stock that is currently sitting at $4.50 per share. They will receive an extremely illiquid stock, though. The cumulative share volume registered by FUTL over the last month amounts to just 222 shares. And what’s the point of owning a stock if you can’t sell it?

Furthermore, there’s no shortage of things that will make you think twice about whether you want to hold FUTL for the long run. The company will probably be in a better shape once the FutureLand Properties’ acquisition is closed, but it will still be weighed down by quite a lot of convertible debt. Most of the debentures can be turned into stock at discounts that reach 50%, but there are some which could be converted at a fixed rate of just $0.05 per share.

All in all, FUTL doesn’t look like the most appealing stock to own and it must be said that FWDG also has its problems. We mentioned in our previous articles that apart from the revenues (part of which will disappear along with the spun-off subsidiaries), the company’s filings don’t really inspire any confidence. And there are some mistakes in the reporting itself.

If you check out the first page of FWDG‘s latest 10-Q, for example, you’ll be left with the impression that there were about 860 million shares issued and outstanding at the end of last year. Scroll down to the Stockholders’ Equity section, however, and you’ll see a different number – just under 454 million.

This raises a rather big question around the share structure and the more experienced among you know that questions around the share structure is not the first thing you want when you’re contemplating a potential investment.

About ten minutes after today’s opening bell, FWDG is sitting at $0.0012 – another 14% in the red.

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