UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

Form 10-Q/A 10-Q

 [X]

☒  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 30, 2015 February 28, 2018

or

[     ]

☐  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number333-197756

BEMAX INC.

(Exact name of registrant as specified in its charter)

625 Silver Oak Drive

Dallas, GA 30132

Tel: (770) 401-1809

(Address andRegistrant’s telephone number, of principal executive office) including area code:(707) 401-1809

N/A

(Former name, former address and former fiscal year, if changed since last report)

1

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) /ofof the Exchange Act during the past 12 months (or for such shorter period that the registrant was requirerequired to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  [X]☒      No  [  ]☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  ☒       No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.filer, a smaller reporting company, or an emerging growth company. See definitionthe definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and large accelerated filer”“emerging growth company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large accelerated filer [ ]   Accelerated filer [ ]   Non-accelerated filer [ ]   

If an emerging growth company, [X]indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  [  ]☐      No  [ X ]☒

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Check whetherState the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d)number of shares outstanding of each of the Securities Exchange Actissuer’s classes of 1934 subsequent tocommon equity, as of the distributionlatest practicable date:  As of securities under a plan confirmed by a court.  [ ] Yes [ ] No

APPLICABLE ONLY TO CORPORATE ISSUERS:

258,750,000April 10, 2018, the issuer had 648,758,013 shares of its common sharesstock issued and outstanding as of November 30, 2015outstanding.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The financial statements included herein have been prepared by us, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been omitted. However, in the opinion of management, all adjustments (which include only normal recurring accruals) necessary to present fairly the financial position and results of operations for the period presented have been made. The results for interim periods are not necessarily indicative of trends or of results to be expected for the full year. These interim financial statements should be read in conjunction with the financial statements and notes thereto included in our financial statements filed therewith the U.S. Securities and Exchange Commission (SEC) on January 13, 2015 and can be found on the SEC website atwww.sec.govCONTENTS

BEMAX INC.

(A Development Stage Company)

Financial Statements

(Expressed in US dollars)

November 30, 2015 and November 30, 2014

(Unaudited) 

4

 BEMAX INC.

(A Development Stage Company)INC

Balance Sheets (Stated in U.S. Dollars)

November 30, 2015 and May 31, 2015 

The accompanying notes are an integral part of these unaudited condensed financial statements.

BEMAX Inc.

Statements of Operations

(Stated in U.S. Dollars)

 (Unaudited) 

BEMAX INC.

StatementThe accompanying notes are an integral part of Cash Flows

 (Stated in U.S. Dollars)

For the Three Months Ended November 30, 2015 and November 30, 2014

 (Unaudited) 

these unaudited condensed financial statements.

7

 BEMAX INC.

Statement of Stockholder’s Equity

         (Stated in U.S. Dollars) 

8BEMAX INC.

February 28, 2018

(Unaudited)

 1.  NATURE OF OPERATIONS 

BEMAX INC. (“The Company”) was incorporated in the State of Nevada on November 28, 2012 to engage in the business of exporting disposable baby diapers manufactured in the United States and then distributing them throughout Europe and South Africa. The Company is in the development stage with no revenues and very limited operating history.

NOTE 2 - GOING CONCERN

The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange commission (“SEC”)  and should be read in connection with the audited financial statements and notes thereto contained in the Company’s K-1 report filed with the SEC. In the opinion of management, all adjustments consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for our interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosures in the audited financial statements, for the fiscal 2015, as reported, have been omitted. 

The Company has elected to adopt early application of Accounting Standards Update No. 2014-10,Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements; it no longer presents or discloses inception-to-date information and other disclosure requirements of Topic 915. 

NOTE 2   GOING CONCERN 

These financial statements have been prepared on a going concern basis, which assumescontemplates the Company will be able to realize itsrealization of assets and discharge itsthe satisfaction of liabilities in the normal course of business for the foreseeable future.business. The Company has incurred a loss since inception resulting inhad minimal revenue and has an accumulated a deficit of $(401,875))$2,515,072 as of November 30, 2015February 28, 2018. The Company requires capital for its contemplated operational and further losses are anticipated inmarketing activities. The obtainment of additional financing, the successful development of the Company’s contemplated plan of operations, and its business raisingtransition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. These conditions and the ability to successfully resolve these factors raise substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future, loans from officers/directors and/or obtainingprivate placement of common stock. Obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand, loans from directors and/or private placementThe unaudited financial statements of common stock. 

There is no guarantee that the Company will be able to raisedo not include any capital through any typeadjustments that may result from the outcome of offering.these uncertainties.

NOTE 3 STOCKHOLDERS’ EQUITY - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Between October 14

Basis of Presentation

The Company’s unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying unaudited condensed financial statements reflect all adjustments, consisting of only normal recurring items, which, in the opinion of management, are necessary for a fair statement of the results of operations for the periods shown and 24, 2014,are not necessarily indicative of the Company authorizedresults to be expected for the full year ending May 31, 2018. These unaudited condensed financial statements should be read in conjunction with the financial statements and issued 1,175,000related notes included in the Company’s Annual Report on Form 10-K for the year ended May 31, 2017.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

Inventory

The Company’s inventory consists of finished goods ready for resale. Inventories are stated at the lower of cost or market. Cost is principally determined using the last-in, first-out (LIFO) method. The company periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment of market conditions.

Derivative Financial Instruments

Derivative liabilities are recognized in the balance sheets at fair value based on the criteria specified in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 815-15– Derivatives and Hedging – Embedded Derivatives(“ASC 815-15”). Pursuant to ASC Topic 815-15 an evaluation of the embedded conversion feature of convertible debt is evaluated to determine if the bifurcated debt conversion feature is required to be classified as a derivative liability. Since the terms of the embedded conversion features of the Company’s convertible debt provides for the issuance of shares of common stock at the election of the holders and the number of shares is subject to various investors,adjustment for net proceeds toa decline in the price of the Company’s common stock, the Company determined that the embedded conversion option met the criteria of $58,750. 

On June 5, 2015, the Company decided to increase the authorized amount of common shares that can be issued from 70,000,000 to 500,000,000 with the same para derivative liability. The estimated fair value of $0.0001 per share.the embedded conversion feature of debt classified as derivative liabilities are determined using the Black-Scholes option pricing model. The model utilizes Level 3 unobservable inputs to calculate the fair value of the derivative liabilities at each reporting period. The Company also declared a Fifty (50) to One (1) forward stock split effective immediately. determined that using an alternative valuation model

As of November 30, 2015, there are 500,000,000 common shares at a par value of $0.0001 per share authorized and 258,750,000 issued and outstanding. 

such as a Binomial-Lattice model would result in minimal differences. The fair value of the embedded conversion feature of debt classified as derivative liabilities are adjusted for changes in fair value at each reporting period, and the corresponding non-cash gain or loss is recorded as other income or expense in the statement of operations. As of February 28, 2018, and May 31, 2017, the embedded conversion feature of $577,569 and $449,975, respectively, of convertible notes payable was classified as a derivative liability. Each reporting period the embedded conversion feature is re-valued and adjusted through the caption “change in fair value of derivative liabilities” on the statements of operations.

Fair value of financial instruments

The Company follows Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 825-10-50-10,Financial Instruments—Overall—Disclosure,for disclosures about fair value of our financial instruments and ASC 820-10-35-37,Fair Value Measurement—Overall—Subsequent Measure—Fair Value Hierarchy, to measure the fair value of our financial instruments. ASC 820-10-35-37 establishes a framework for measuring fair value GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820-10-35-37 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by ASC 820-10-35-37 are described below:

The following table classifies the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of:

February 28, 2018:

May 31, 2017:

Revenue Recognition

The Company follows ASC 605-10-S99-1,Revenue Recognition,of the FASB Accounting Standards Codification for revenue recognition, which has four basic criteria that must be met before revenue is recognized: 1) existence of persuasive evidence that an arrangement exists; 2) delivery has occurred or services have been rendered; 3) the seller’s price to the buyer is fixed and determinable; and 4) collection is reasonably assured.

Pre-payment Policy: All sales to our customers will be solely on a pre-payment basis. Once the order is completed and payment is received, we will place an order with the North American supplier of disposable baby diapers and arrange shipping directly to our customers. The process is expected to take three weeks to complete. The pre-payment will be recorded as deferred revenue until the delivery is executed.

Reclassifications

Certain reclassifications have been made to the prior year financial information to conform to the presentation used in the unaudited financial statements for the nine months ended February 28, 2018.

Recent Accounting Pronouncements

BEMAX INC.NOTE 4—PROPERTY AND EQUIPMENT

Notes

Furniture, fixtures, and equipment, stated at cost, less accumulated depreciation consisted of the following at:

Depreciation Expense

Depreciation expense for the nine months ended February 28, 2018 and 2017, was $2,392 and $0, respectively.

NOTE 5 – OTHER ASSETS

On March 27, 2017, the Company entered into an Option to obtain a Property Lease Agreement (“the lease”) with Simfox Enterprises aka Achievers Nursery School. This is a development property situated in Lagos, Nigeria. The lease is for 30 years with two successive five-year extensions at the option of the Company. Consideration for the Option is $300,000 with $110,000 due immediately and the balance by installments by August 30, 2017. As of February 28, 2018, the Company has paid the full $300,000. In addition, the Company has agreed, subject to the Financial Statementssigning of the Definitive Document, to pay Simfox Enterprises, a $390,000 refundable good faith deposit, of which $390,000 has been paid. The definitive document is currently under negotiation. The deposit will be held by Simfox in an interest-bearing account to be returned to Bemax plus interest, on completion of the development of the property by the Company. 

November 30, 2015

(Unaudited)The Company intends to develop the property for its intended purpose over a two to five-year period, as mutually agreed upon. The option payment of $300,000 will be amortized over this period once development begins.

NOTE 46 - RELATED PARTY TRANSACTIONS

The President of the Company provides management feesservices and office premises to the Company for a fee of $1,500 per month, the right to which the President has agreed to assign to the Company until such a time as the Company closes on an Equityequity or Debtdebt financing of not less than $750,000. The assigned rights are valued at $1,000 per month for rent and $500 for executive compensation. A totalAs of $18,000February 28, 2018, and May 31, 2017, there is $58,500 and $45,000, respectively, accrued for donated management fees were charged to “Loan from Shareholder” for the period December 1, 2014 through November 30, 2015.these fees.

As of November 30, 2015,February 28, 2018, and May 31, 2017, there are loans from the majority shareholder of $11,438 and related party totalling $29,236. They$11,438, respectively. These loans were made in order to assist in meeting general and administrative expenses. These advances are unsecured, due on demand and carry nonon-interest bearing.

NOTE 7 - STOCKHOLDERS’ EQUITY

On December 5, 2016, the Company issued 7,500,000 shares of common stock per the terms of a one-year consulting agreement. The shares were valued at $0.01 per share for total non-cash expense of $75,000. The expense was being amortized over the term of the agreement. As of February 28, 2018, the full $75,000 has been debited to consulting expense.

On January 24, 2017, the Company allowed Taiwo Aimasiko, its CEO to retire 150,000,000 shares of common stock in exchange for 50,000,000 Series B preferred shares.

On October 24, 2017, the Company amended its Articles of Incorporation increasing the authorized issue of common stock from 850,000,000 to 950,000,000. The par value remains the same at $0.0001 per share. 

During the year ended May 31, 2017, various note holders converted $318,631 of principal and accrued interest into 185,348,336 shares of common stock. All conversions were completed pursuant to the terms of their respective convertible promissory notes. No gains or collateral.losses were recognized as a result of the conversions.

On January 8, 2018, the Board of Directors consented to increase the Company’s authorized common shares to 1,700,000,000 from 950,000,000, par value to remain at $0.0001.

On January 10, the Company’s Board of Directors approved the retirement of 40,000,000 common shares owned by the Company’s CEO, Taiwo Aimasiko, in exchange for 40,000,000 Series C Preferred Shares, effectively reducing the Company’s total common shares issued and outstanding by 9.3%.

During the nine months ended February 28, 2018, the Company converted $104,675 and $14,039 of principal and interest, respectively, into 219,447,951 shares of common stock.

On October 10, 2017, the Company executed an Agreement for IR Services. The agreement is for six months and requires a fee of 10 million shares of common stock. The first 5,000,000 shares of common stock are required upon the execution of the agreement and were granted by the Board of Directors on October 10, 2017. The next 2.5 million shares are due in thirty days and the remaining 2.5 million, thirty days after that. The Company issued the 5,000,000 shares valued at $0.0023 per share for total non-cash expense of $11,500. On November 10, 2017, the Company issued another 2,500,000 shares of common stock valued at $0.0022 per share for total non-cash expense of $5,500. On December 10, 2017, the Company issued the last 2,500,000 shares of common stock valued at $0.001 per share for total non-cash expense of $2,500. All expense is being amortized over the remaining term of the agreement. As of February 28, 2018, $15,025 has been debited to consulting expense. As of February 28, 2018, 5,000,000 of the shares have not yet been issued by the transfer agent; therefore, they have been credited to the stock payable account.

NOTE 58 – PREFERRED STOCK 

On January 23, 2017, the Board of Directors designated a series of preferred stock titled Series B Preferred Stock consisting of 50,000,000 shares with a $0.0001 par value. Each share of Series B preferred stock has voting rights of 10 votes per share, and will vote alongside the common stock, not as a separate class. Each share of preferred stock can be converted into three shares of common stock at any time after a one-year anniversary. Holders are entitled to dividends, if declared, equivalent to if they had converted to common stock. The Series B preferred stock have no liquidation rights.

On October 24, 2017, the Company amended its Articles of Incorporation increasing the authorized issue of preferred stock from 50,000,000 to 100,000,000. The par value remains the same at $0.0001 per share. 

On January 24, 2017, the Company allowed Taiwo Aimasiko, its CEO to retire 150,000,000 shares of common stock in exchange for 50,000,000 Series B preferred shares.

On January 8, 2018, the Company amended and restated its Articles of Incorporation to designate 40,000,000 of the 100,000,000 shares of Preferred Stock as Series C Preferred Stock. Each share of Series C preferred stock has voting rights of 40 votes per share, and will vote alongside the common stock, not as a separate class. Each share of preferred stock can be converted into one share of common stock at any time after a one-year anniversary. Holders are entitled to dividends, if declared, equivalent to if they had converted to common stock. The Series C preferred stock have no liquidation rights. 

On January 10, 2018, the Company allowed Taiwo Aimasiko, its CEO to retire 40,000,000 shares of common stock in exchange for 40,000,000 Series C preferred shares.

NOTE 9 - CONVERTIBLE LOANS

On December 28, 2016, the Company issued a Convertible Promissory Note in favor of Crown Bridge Partners, LLC. The principal amount of the loan is $46,000 with an original issue discount of $6,000 and carries an interest rate of 8% per annum. It becomes due and payable with accrued interest on December 28, 2017. Crown Bridge Partners, LLC. has the option to convert the Note plus accrued interest into common shares of the Company, after 180 days. The conversion rate will be at a discount of 45% applied to the lowest trading price for fifteen days prior to the actual date of conversion. On June 8, 2017, the Company repaid the $46,000 of principal, $1,575 of accrued interest and a $23,925 early payment penalty. As a result of repayment of the note the Company recognized the remaining debt discount. The Company repaid the note prior to when the convertible feature was effective; therefore, there are no derivatives related to the embedded conversion feature.

On March 20, 2017, the Company issued a Convertible Promissory Note in favor of Crown Bridge Partners, LLC. The principal amount of the loan is $114,000 with an original issue discount of $14,000 and carries an interest rate of 8% per annum. It becomes due and payable with accrued interest on March 20, 2018. Crown Bridge Partners, LLC. has the option to convert the Note plus accrued interest into common shares of the Company, after 180 days. The conversion rate will be at a discount of 43% applied to the lowest trading price for ten days prior to the actual date of conversion. The company bifurcated the conversion feature and accounted for it as a derivative liability. The Company recorded the derivative liability at its fair value of $170,236 based on the Black Scholes Merton pricing model and a corresponding debt discount of $114,000 to be amortized utilizing the interest method of accretion over the term of the note. During the nine months ended February 28, 2018, the Company converted $12,380 of principal into 15,000,000 shares of common stock. As of February 28, 2018, the Company fair valued the derivative at $104,810. In addition, $110,921 of the debt discount has been amortized to interest expense.

On March 27, 2017, the Company issued a Convertible Promissory Note in favor of JSJ Investments, Inc. The principal amount of the loan is $125,000 with an original issue discount of $9,250 and carried an interest rate of 8% per annum. Upon default the interest rate has increased to 12%. It becomes due and payable with accrued interest on December 22, 2017. JSJ Investments, Inc. has the option to convert the Note plus accrued interest into common shares of the Company at any time. The conversion rate will be at a discount of 40% applied to the average of the three lowest trading prices for ten days prior to the actual date of conversion. The company bifurcated the conversion feature and accounted for it as a derivative liability. The Company recorded the derivative liability at its fair value of $204,373 based on the Black Scholes Merton pricing model and a corresponding debt discount of $125,000 to February 28, 2018, the Company converted $42,374 of principal into 41,953,384 shares of common stock. As of February 28, 2018, the Company fair valued the derivative at $79,047. In addition, $125,000 of the debt discount has been amortized to interest expense. This note is currently in default.

On April 4, 2017, the Company issued a Convertible Promissory Note in favor of Auctus, Fund, LLC. The principal amount of the loan is $145,000 with an original issue discount of $15,000 and carries an interest rate of 8% per annum. It becomes due and payable with accrued interest on December 22, 2017. Auctus Fund, LLC. has the option to convert the Note plus accrued interest into common shares of the Company, at any time. The conversion rate will be at a discount of 40% applied to the lowest trading price for ten days prior to the actual date of conversion. The company bifurcated the conversion feature and accounted for it as a derivative liability. The Company recorded the derivative liability at its fair value of $257,720 based on the Black Scholes Merton pricing model and a corresponding debt discount of $145,000 to be amortized utilizing the interest method of accretion over the term of the note. During the nine months ended February 28, 2018, the Company converted $17,621 and $12,365 of principal and interest, respectively into 90,275,800 shares of common stock. As of February 28, 2018, the Company fair valued the derivative at $81,727. In addition, $145,000 of the debt discount has been amortized to interest expense. This note is currently in default and has incurred a $15,000 penalty that has been added to the principal amount due.

On August 3, 2017, the Company issued a Convertible Promissory Note in favor of JSJ Investments, Inc. The principal amount of the loan is $60,000 with an original issue discount of $5,000 and carries an interest rate of 8% per annum. It becomes due and payable with accrued interest on May 3, 2018. JSJ Investments, Inc. has the option to convert the Note plus accrued interest into common shares of the Company at any time. The conversion rate will be at a discount of 40% applied to the average of the three lowest trading prices for ten days prior to the actual date of conversion. The company bifurcated the conversion feature and accounted for it as a derivative liability. The Company recorded the derivative liability at its fair value of $73,676 based on the Black Scholes Merton pricing model and a corresponding debt discount of $60,000 to be amortized

utilizing the interest method of accretion over the term of the note. As of February 28, 2018, the Company fair valued the derivative at $57,402. In addition, $45,954 of the debt discount has been amortized to interest expense.

On June 2, 2017, the Company issued a Convertible Promissory Note in favor of GS Capital Partners, LLC. The principal amount of the loan is $132,000 with an original issue discount of $6,600 and carries an interest rate of 8% per annum. It becomes due and payable with accrued interest on June 2, 2018. GS Capital Partners, LLC. has the option to convert the Note plus accrued interest into common shares of the Company, after 180 days. The conversion rate will be at a discount of 36% applied to the lowest trading price for ten days prior to the actual date of conversion. The company bifurcated the conversion feature and accounted for it as a derivative liability. The Company recorded the derivative liability at its fair value of $172,690 based on the Black Scholes Merton pricing model and a corresponding debt discount of $132,000 to be amortized utilizing the interest method of accretion over the term of the note. During the nine months ended February 28, 2018, the Company converted $32,300 and $1,673 of principal and interest, respectively into 72,218,767 shares of common stock. As of February 28, 2018, the Company fair valued the derivative at $92,291. In addition, $67,303 of the debt discount has been amortized to interest expense.

On July 18, 2017, the Company issued a Convertible Promissory Note in favor of GS Capital Partners, LLC. The principal amount of the loan is $105,000 with an original issue discount of $5,000 and carries an interest rate of 8% per annum. It becomes due and payable with accrued interest on July 18, 2018. GS Capital Partners, LLC. has the option to convert the Note plus accrued interest into common shares of the Company, after 180 days. The conversion rate will be at a discount of 36% applied to the lowest trading price for ten days prior to the actual date of conversion. The company bifurcated the conversion feature and accounted for it as a derivative liability. The Company recorded the derivative liability at its fair value of $192,097 based on the Black Scholes Merton pricing model and a corresponding debt discount of $105,000 to be amortized utilizing the interest method of accretion over the term of the note. As of February 28, 2018, the Company fair valued the derivative at $116,078. In addition, $28,123 of the debt discount has been amortized to interest expense.

On October 19, 2017, the Company issued a Convertible Promissory Note in favor of Einstein Investments. The principal amount of the loan is $36,200 with an original issue discount of $5,200 and carries an interest rate of 8% per annum. It becomes due and payable with accrued interest on July 19, 2018. Einstein Investments has the option to convert the Note plus accrued interest into common shares of the Company, at any time. The conversion rate will be at a discount of 43% applied to the lowest trading price for 15 days prior to the actual date of conversion. The company bifurcated the conversion feature and accounted for it as a derivative liability. The Company recorded the derivative liability at its fair value of $86,715 based on the Black Scholes Merton pricing model and a corresponding debt discount of $36,200 to be amortized utilizing the interest method of accretion over the term of the note. As of February 28, 2018, the Company fair valued the derivative at $46,215. In addition, $20,869 of the debt discount has been amortized to interest expense.

On October 26, 2017, the Company issued a Convertible Promissory Note in favor of GS Capital Partners, LLC. The principal amount of the loan is $125,000 with an original issue discount of $6,250 and carries an interest rate of 8% per annum. It becomes due and payable with accrued interest on October 26, 2018. GS Capital Partners, LLC. has the option to convert the Note plus accrued interest into common shares of the Company, after 180 days. The conversion rate will be at a discount of 36% applied to the lowest trading price for ten days prior to the actual date of conversion. As of February 28, 2018, $2,084 of the debt discount has been amortized to interest expense.

On January 10, 2018, the Company issued a Convertible Promissory Note in favor of GS Capital Partners, LLC. The principal amount of the loan is $105,000 with an original issue discount of $5,000 and carries an interest rate of 8% per annum. It becomes due and payable with accrued interest on January 10, 2019. GS Capital Partners, LLC. has the option to convert the Note plus accrued interest into common shares of the Company, after 180 days. The conversion rate will be at a discount of 36% applied to the lowest trading price for ten days prior to the actual date of conversion. As of February 28, 2018, $667 of the debt discount has been amortized to interest expense.

On February 12, 2018, the Company issued a Convertible Promissory Note in favor of GS Capital Partners, LLC. The principal amount of the loan is $125,000 with an original issue discount of $6,250 and carries an interest rate of 8% per annum. It becomes due and payable with accrued interest on October 26, 2018. GS Capital Partners, LLC. has the option to convert the Note plus accrued interest into common shares of the Company, after 180 days. The conversion rate will be at a discount of 36% applied to the lowest trading price for ten days prior to the actual date of conversion. As of February 28, 2018, $260 of the debt discount has been amortized to interest expense.  

A summary of outstanding convertible notes as of February 28, 2018 and May 31, 2017 is as follows:

During the year ended May 31, 2017, the Company converted $318,631 of principal and accrued interest into 185,348,336 shares of common stock. During the nine months ended February 28, 2018, the Company converted $104,675 and $14,039 of principal and interest, respectively, into 219,447,951 shares of common stock.

A summary of the activity of the derivative liability for the notes above is as follows:

A summary of quantitative information about significant unobservable inputs (Level 3 inputs) used in measuring the Company’s derivative liabilities that are categorized within Level 3 of the fair value hierarchy for the nine months ended February 28, 2018 is as follows:

The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s management. 

NOTE 10 – CORRECTION OF ERRORS

The Company has discovered that there were errors in prior periods regarding revenue, expense and derivative recognition for derivatives related to the embedded conversion features of convertible notes. As a result, the prior periods in these financial statements have been restated.

NOTE 11 - SUBSEQUENT EVENTS

In Accordanceaccordance with SFAS 165 (ASC 855-10) management has reviewed eventsASC 855-10,Subsequent Events, we have analyzed our operations subsequent to February 28, 2018, through January, 2016, the date these financialsthe unaudited financial statements were available to be issued, and it washave determined that there are nonewe do not have any material subsequent events to report. disclose in these unaudited financial statements other than the following.

Subsequent to February 28, 2018, the various note holder converted approximately $35,000 and of principal and interest, respectively into 162,669,226 shares of common stock.

ITEM 2. MANAGEMENT'SMANAGEMENT’S DISCUSSION ANDND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

This report on Form 10-Q contains certain forward-looking statements. All statements other than statements of historical fact are "forward-looking statements"“forward-looking statements” for purposes of these provisions, including any projections of earnings, revenues, or other financial items; any statements of the plans, strategies, and objectives of management for future operation; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; statements of belief; and any statement of assumptions underlying any of the foregoing. Such forward-looking statements are subject to inherent risks and uncertainties, and actual results could differ materially from those anticipated by the forward-looking statements.

Business Overview

Bemax Inc. is newa Nevada –basedbased company focusing on the distribution of disposable baby diapers, made in North America and Asia by quality producers, to wholesalers and retailers in Europe and the emerging markets. Our business is focused on expanding current distribution networks for our private labels. We arewill attract more distributors for our products with competitive pricing through lower overhead cost. We continue to invest in the ecommerce space to attract loyal customers and expand within our markets.

The Company is working on several business development projects to increase business and revenue generation in 2018 and beyond, including but not limited to: product licensing of private labels in some of our African markets, production, and extended distribution of new and existing Bemax private label disposable baby diaper products. There can be no assurance that these will be successful in generating increased revenues in 2018.

Results of Operations for the Three Months Ended February 28, 2018 and 2017

Revenue

Revenue for the three months ended February 28, 2018 and 2017 was $102,090 and $24,960, respectively. The increase is due to a development stage corporationlarge sale to a single customer in January 2018.

Operating Expenses

Consulting fees were $5,001 and have generated$0 for the three months ended February 28, 2018 and 2017, respectively. The increase can be attributed to the recognition of expense for stock for services issued.

Professional fees were $2,925 and $9,200 for the three months ended February 28, 2018 and 2017, respectively, a decrease of $6,275, or realized minimal revenues from68.2%, in 2018. The decrease in 2018, as compared to 2017, can be largely attributed to decreased audit and accounting fees related to required SEC quarterly filings.

General and administrative expense was $46,786 and $68,858 for the three months ended February 28, 2018 and 2017, respectively, a decrease of $22,072, or 32.1%, in the current period. The decrease in 2018 can be attributed to decreased operational costs.

Other Income and Expense

For the three months ended February 28, 2018, we had total other income of $205,647, compared to total other expense of $853,102 for the three months ended February 28, 2017. For the three months ended February 28, 2018, we recorded interest expense of $19,704, compared to $3,712 in the prior period. In addition, as a result of the convertible promissory notes, we recorded amortization of debt discount of $206,376, compared to $134,032 for the prior period, a loss on the issuance of convertible debt of $92,098 compared to $0 for the prior period, and a gain in the change in the fair value of our business operations. 
derivatives of $538,825 compared to a loss of $715,358 in the prior year.

Net Loss

For the three months ended February 28, 2018 and 2017, we gained net income of $154,525 and incurred a net loss of $1,070,720, respectively.

Results of Operations for the Nine Months Ended February 28, 2018 and 2017

Revenue

Revenue for the nine months ended February 28, 2018 and 2017 was $104,815 and $140,113, respectively. The decrease is due fewer customers in the current period.

Operating Expenses

Consulting fees were $53,001 and $0 for the nine months ended February 28, 2018 and 2017, respectively. The increase can be attributed to fees associated with acquiring the property lease with Simfox and the recognition of expense for stock for services.

Professional fees were $31,713 and $18,600 for the nine months ended February 28, 2018 and 2017, respectively, an increase of $13,113, or 70.5%, in 2018. The increase in 2018, as compared to 2017, can be largely attributed to increased legal, audit, and/or accounting fees related to required SEC quarterly filings.

General and administrative expense was $132,997 and $79,442 for the nine months ended February 28, 2018 and 2017, respectively, an increase of $53,555, or 67.4%, in the current period. The increase in 2018 can be attributed to increased operational costs including $5,003 for travel, office expense as well as additional filing fees to amend some of our SEC filings.

Other Income and Expense

For the nine months ended February 28, 2018, we had total other expense of $486,046, compared to $964,928 for the nine months ended February 28, 2017. For the nine months ended February 28, 2018, we recorded interest expense of $45,125, compared to $53,001 in the prior period. In addition, as a result of the convertible promissory notes, we recorded amortization of debt discount of $485,763 compared to $296,400 for the prior period, a loss on the issuance of convertible debt of $284,014 compared to $284,091 for the prior period, a loss on settlement of debt of $23,925, and a gain in the change in the fair value of our derivatives of $367,781 compared to a loss of $331,436 in the prior year.

Net Loss

For the nine months ended February 28, 2018 and 2017, we incurred a net loss of $701,952 and $1,206,554, respectively.

Liquidity and Capital Resources

Cash Flows 

10During the nine months ended February 28, 2018, we used cash of $590,963 in operating activities, as compared to $269,632 for the nine months ended February 28, 2017. Financing activities provided net cash of $602,900 during the nine months ended February 28, 2018, as compared to $154,500 for the nine months ended February 28, 2017.

Through November 30, 2015,As of February 28, 2018, we have the Company has carried on limited operations with $65,219 in revenues.following convertible notes outstanding.

We currently have minimal cash reserves. To date, the Company has covered operating deficits primarily through loans from the sole director.director, and third-party loans which if not paid with interest are convertible to the Company’s common stock. Accordingly, our ability to pursue our plan of operations is contingent on our being able to obtain funding for the development, marketing and commercialization of our products and services. However, as a result of its lack of operating success, the Company may not be able to raise additional funding to cover operating deficits.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has an accumulated deficit of $401,876$2,515,072 since inception (November 28, 2012) to the period ended November 30, 2015 and is dependent on its ability to raise capital from shareholders or other sources to sustain operations. However, these conditions raise substantial doubt about the Company'sCompany’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Management's Fiscal Quarter Report on Internal Control over Financial Reporting. 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes, in accordance with generally accepted accounting principlesWe anticipate that we may only generate any limited revenues in the United States of America. Ournear future and we will not have enough positive internal control over financial reporting includes those policiesoperating cash flow until we can generate substantial revenues, which may take the next two years to fully realize.  There is no assurance we will achieve profitable operations.

Critical Accounting Estimates and procedures that (i) pertain to the maintenance records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permitPolicies

The preparation of financial statements in accordanceconformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that receiptsaffect the reported amounts of assets and expendituresliabilities and the disclosure of contingent assets and liabilities of the Company are being made only in accordance with authorizations of managementdate of the Company;financial statements and (iii) provide reasonable assurance regarding prevention or timely detectionthe reported amounts of unauthorized acquisition, use, or dispositionrevenues and expenses during the reporting period.  Note 3 to the Financial Statements describes the significant accounting policies and methods used in the preparation of the Company's assetsFinancial Statements. Estimates are used for, but not limited to, contingencies and taxes.  Actual results could differ materially from those estimates. The following critical accounting policies are impacted significantly by judgments, assumptions, and estimates used in the preparation of the Financial Statements.

The Company follows ASC 605-10-S99-1,Revenue Recognition,of the FASB Accounting Standards Codification for revenue recognition, which has four basic criteria that couldmust be met before revenue is recognized: 1) existence of persuasive evidence that an arrangement exists; 2) delivery has occurred or services have been rendered; 3) the seller’s price to the buyer is fixed and determinable; and 4) collection is reasonably assured.

Pre-payment Policy: All sales to our customers will be solely on a material effect onpre-payment basis. Once the financial statements. order is completed and payment is received, we will place an order with the North American supplier of disposable baby diapers and arrange shipping directly to our customers. The process is expected to take three weeks to complete. The pre-payment will be recorded as deferred revenue until the delivery is executed.

Because of inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods

We are subject to various loss contingencies arising in the riskordinary course of business.  We consider the likelihood of loss or impairment of an asset or the incurrence of a liability, as well as our ability to reasonably estimate the amount of loss in determining loss contingencies.  An estimated loss contingency is accrued when management concludes that controls may become inadequate dueit is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated.  We regularly evaluate current information available to change in conditions, or that the degree of compliance with the policies or procedures may deteriorate. us to determine whether such accruals should be adjusted.

Results of Operations

We recognize deferred tax assets (future tax benefits) and liabilities for the Period Ended November 30, 2015

Revenue

Revenue forexpected future tax consequences of temporary differences between the period ended November 30, 2015,book carrying amounts and November 30, 2014 were $65,219the tax basis of assets and $0 respectively. 

11

Deferred Revenue

Deferred revenue forliabilities.  The deferred tax assets and liabilities represent the period ended November 30, 2015expected future tax return consequences of those differences, which are expected to be either deductible or taxable when the assets and November 30, 2014 were $507,722 and $0 respectively. Management anticipateliabilities are recovered or settled.  Future tax benefits have been fully offset by a 100% valuation allowance as management is unable to determine that it is more likely than not that this deferred revenuetax asset will be recognized within the next six months.realized.

Net Income (Loss)

For the period ended November 30, 2015, the Company generate net income of $59,209 and incurred net losses of $1,051 for same period ended November 30, 2014.

Expenses

Our total expenses for the period ended November 30, 2015 were $6,010 which consisted of general and administrative expenses

Inflation

The amounts presented in the financial statements do not provide for the effect of inflation on our operations or financial position.  The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.

Off-Balance Sheet Arrangements

As of November 30, 2015, we had no off balance

We have not entered into any off-balance sheet transactionsarrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.resources and would be considered material to investors.

Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Not applicable.applicable to smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"“Exchange Act”), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission'sCommission’s rules and forms and that such information is accumulated and communicated to our sole officer, as appropriate to allow timely decisions regarding required disclosure. We carried out an evaluation, under the supervision and with the participation of our sole officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of November 30, 2015. February 28, 2018.

12

Based on the evaluation of these disclosure controls and procedures, our Chief Executive and Chief Financial Officer concluded that as of the end of the periods covered by this report, we have identified the following material weakness of our internal controls: Lack of sufficient accounting staff which results in a lack of segregation of duties necessary for a good system of internal control.control and lack of formal documentation of accounting policies and procedures.

In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute assurance of achieving the desired objectives. Also, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs.

Changes in Internal Controls

There were no changes in our internal control or in other factors during the last fiscal quarter covered by this report that have materially affected, or are likely to materially affect the Company'sCompany’s internal control over financial reporting.

10

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party against us. None of our directors, officers or affiliates are (i) a party adverse to us in any legal proceedings, or (ii) have an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings that have been threatened against us.

ITEM 1A. RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this Item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.
 

During the nine months ended February 28, 2018, the Company converted $104,675 and $14,039 of principal and interest, respectively, into 219,447,951 shares of common stock.

On October 10, 2017, the Company issued the 5,000,000 shares valued at $0.0023 per share for total non-cash expense of $11,500. On November 10, 2017, the Company issued another 2,500,000 shares of common stock valued at $0.0022 per share for total non-cash expense of $5,500. On December 10, 2017, the Company issued the last 2,500,000 shares of common stock valued at $0.001 per share for total non-cash expense of $2,500. As of February 28, 2018, 5,000,000 of the shares have not yet been issued by the transfer agent; therefore, they have been credited to the stock payable account.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

N/A.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibits:

31.1 Certification of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a)

31.2 Certification of Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or

         15d-14(a). 

32.1 Certifications pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d- 14(b) and 18

         U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.
 

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the Registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned thereunto duly authorized.

BEMAX INC.

Dated: July 27, 2017                    By: /s/ Taiwo Aimasiko

                                                               ________________________________

                                                               Taiwo Aimasiko, President and

                                                               Chief Executive Officer

Dated: July 27, 2017                 By: /s/ Taiwo Aimasiko

                                                             _________________________________

                                                             Taiwo Aimasiko, Chief Financial Office

11