Shares of Bemax, Inc. (OTCPK:BMXC) had a banner day on Tuesday, jumping on news of a show of confidence by the chief executive and a promise that 2018 is going to be a year of building corporate value. From its current market capitalization of $643,000, the Atlanta-based distributor of private label disposable diapers has plenty of headroom for growth for sure.
The $643k market cap includes a surge of 66.67% in Tuesday action, which took shares from Monday's close at $0.0009 to a close of $0.0015 today.
Share movement was non-existent until about 2:45 PM EST, when Bemax released news that CEO Taiwo Aimasiko voluntarily retired 40 million shares, swapping common stock for Series C preferred shares. Aimasiko effectively didn't give up any of his stake in the company (in fact, preferred stockholders have a greater claim to a company's assets than common shareholders), but did reduce the total issued and outstanding shares by 9.3%, a value add for regualr shareholders. In January 2017, Aimasiko retired 150 million shares of common stock in exchange for 50 million shares of Series C preferred stock.
As of January 10, 2018, Bemax had 428,689,775 shares of its common stock issued and outstanding, according to its 10-Q filing with the SEC. The same filing shows the company generated only $1,083 in sales during the three months ended November 30, 2017, down from $23,031 in the year prior quarter. The company attributed the decrease on a temporary focus on plant development. Walmart.com sells a 276-count package of the company's Mother's Touch disposable diapers for $39.99 with free shipping. Even if Walmart marks the diapers up 100% and other pricing models elsewhere are similar, that's only about 50 units sold by Bemax. Net loss for the quarter was $727,684, up form $42,026 a year earlier.
Management is optimistic the worm is turning in 2018 thanks to "extensive marketing activities during the past twelve months." Earlier this month, the company said its Mother's Touch line was now available on Amazon.ca, with expansion following on Amazon's other channels, namely its flagship e-commerce site, Amazon.com. Aimasiko says that new purchase orders will be completed this month demonstrating the focus on meeting sales targets for 2018, although we couldn't find any guidance or disclosed targets readily available.
No matter what, it looks like - and investors surely are hoping that - Q4 sales will be exceeded.
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