Key Highlights

● Bemax's special dividend is paid in Series A Convertible Preferred Stock, not cash.

● The payment date moved to June 30, 2025.

● Each preferred share converts into 30 common shares after a 180-day period.

● Common shares outstanding fell 55.01% after an October 2024 retirement.

Bemax Inc (OTC:BMXC), a Georgia-based distributor of disposable baby diapers, merits attention because its most recent company announcement concerns a special dividend paid in convertible preferred stock rather than cash. On April 3, 2025 the company said the payment date had moved to June 30, 2025 to allow time for corporate action processing with the Financial Industry Regulatory Authority (FINRA).

Bemax describes itself as a private-label development company focused on disposable household products. Its release says it makes disposable diapers and women's hygiene products and exports and distributes private-label goods to emerging markets. Customers include wholesalers and retailers in the United States, Canada, Europe and South Africa.

The dividend terms

Under the terms announced on January 6, 2025 and updated on April 3, 2025, common shareholders of record at the close of business on March 28, 2025 receive Series A Convertible Preferred Stock valued at 10% of their common holdings. The ex-dividend date was March 31, 2025.

Each preferred share converts into 30 common shares from the day after the 180-day anniversary of issue, and converted shares can be traded only after a mandatory regulatory holding period.

Chief executive Taiwo Aimasiko said in the release that the company was committed to rewarding shareholders and that the preferred dividend had potential to create value over the medium to long term.

Recent results and share count

The latest figures published through company releases cover the quarter reported on December 30, 2024. Bemax reported second-quarter fiscal 2024 revenue of $1,078,090, gross margin of $21,880 and operating expenses of $73,758, with cash and short-term investments of $164,645. That quarter followed a purchase order of $972,135 for diapers announced in September 2024, and the full-year result to the period reported in July 2024 showed revenue of $117,405 and a net loss of $90,637.

The share structure changed sharply in late 2024. The chief executive retired 600,000,000 common shares in October 2024 in exchange for 24,000,000 Series B preferred shares, cutting common shares outstanding by 55.01%, and retired a further 200,716,573 shares in November 2024 for 8,028,662 Series B preferred shares, a 40.90% reduction. In August 2024 the company completed the acquisition of Kona Gold, LLC from Kona Gold Beverage, Inc.

Risks to weigh

The company's own safe-harbor language lists going-concern doubt, a limited public market and the ability to raise capital among its risks. Around 393.1 million shares are outstanding, and trailing-twelve-month revenue is about $6,380, far below the quarterly sales reported in late 2024.

Convertible preferred stock can add to the number of common shares in circulation once converted, so existing holders could be diluted.

Preferred Dividend Completion Still Unconfirmed

Bemax's special dividend gives common shareholders of record on March 28, 2025 Series A Convertible Preferred Stock valued at 10% of their common holdings, with each preferred share converting into 30 common shares after a 180-day period. The payment date moved to June 30, 2025, and the capital structure had already changed sharply, with 600,000,000 and 200,716,573 common shares retired in October and November 2024 in exchange for Series B preferred shares.

The first point to confirm is an update from Bemax that the preferred distribution was completed after the revised June 30, 2025 date. Current financial statements, filed with the SEC or published through OTC Markets disclosure, would show whether revenue has recovered from the trailing level, and any further share retirements or conversions would change the capital structure again.