A day after the robust rally, FutureWorld Corp (OTCMKTS:FWDG) sunk back into the red zone as the impact of dividend distribution faded. Earlier this week, the company said that it aims to spin-off its FutureLand Properties LLC in a separate listed company.

FutureLand share-cum-dividend distribution

In addition to this, the company promised its shareholders that they will receive a share of the said spun-off entity in the form of a dividend. The company had set the record date of April 17 to ascertain the valid shareholders eligible to receive the dividend.

The news filled the shareholders of FutureWorld Corp (OTCMKTS:FWDG) with enthusiasm, who plunged into amassing the company’s shares. But, the effect of the news was short-lived as the company nosedived yesterday sharply. The cause of concern is the company’s not-so-convincing financial report released for the period ended on December 31, 2014. As per which, the company’s cash and current assets balance is at $151,000 and $733,000 respectively. At the same time, the company’s current liabilities stand at $2 million while its revenues and net loss for the period are $362,000 and $168,000 respectively.

Fault with the promises

From the revenue perspective, one can argue that the company has done well, but a more careful analysis shows that the revenues are generated through its subsidies, which are being spun-off now. Hence, there is a little chance that the company will be able to earn even this much of revenue on its own.

Also, the company’s working capital deficit of $1.3 million adds to the doubts about the company’s profitability. Further, the company’s track record of keeping up its promises is weak as one refer to its journey of entering into the marijuana space. Thus, the company has to show it this time that its promise of converting FutureLand into public company is executed.

During the last trading session, the stock of FutureWorld Corp (OTCMKTS:FWDG) slid by nearly 23% to $0.00470 as it reported an average volume of 22.72 million.