PROBLEM #1: Stock dividends still require retained earnings — which DBMM doesn't have. Stock dividends are distributions of retained earnings — accumulated profit. Lumen Learning DBMM has the opposite. Per SEC filings, DBMM's accumulated deficit as of February 2024 stood at negative $17.7 million, with a total stockholders' deficit of negative $7 million. sec There are no retained earnings to distribute in any form — cash or shares. (Source: SEC EDGAR — https://www.sec.gov/Archives/edgar/data/0001127475/000118518524000387/dbmm20240229_10q.htm) To pay a dividend, a company must have a positive balance in retained earnings — companies with a deficit retained earnings account would not pay a dividend unless it is part of a corporate liquidation action. Principles of Accounting (Source: PrinciplesOfAccounting.com)
PROBLEM #2: Issuing more shares to ~925 million already outstanding dilutes everyone. Per the most recent 10-Q filings, DBMM currently has 925,218,631 shares issued and outstanding, against an authorized cap of 2,000,000,000. sec That means roughly 1.07 billion shares of remaining authorized headroom. A stock dividend would consume that headroom while diluting every existing shareholder's ownership percentage — the opposite of a benefit. With a stock dividend, the total number of outstanding shares increases proportionally, meaning a company with $10M in market value and 100,000 shares at $100 each would still be worth $10M — just with 110,000 shares at $90.91 each. Lumen Learning No new value is created. You'd own more shares of a smaller slice of an already near-worthless pie.
PROBLEM #3: PIK (paid-in-kind) stock dividends on preferred shares carry their own landmines. Some preferred stock includes a paid-in-kind (PIK) dividend feature where dividends are paid in additional shares. If cumulative, the issuer remains obligated to pay any accumulated undeclared dividends upon liquidation. PwC So if DBMM issued preferred shares with PIK dividends and couldn't keep up, those obligations would stack up as a liquidation liability — crushing common shareholders even further. (Source: PwC Viewpoint — https://viewpoint.pwc.com)
PROBLEM #4: The SEC and accounting rules treat this as still requiring equity surplus. There is no specific guidance on accounting for a stock dividend when a reporting entity has an accumulated deficit rather than retained earnings. The SEC staff has historically taken the view that the reporting entity should capitalize only the stock's par value from additional paid-in capital. PwC Even accounting for it becomes a problem when there's nothing in retained earnings. (Source: PwC Viewpoint — https://viewpoint.pwc.com/dt/us/en/pwc/accounting_guides/financing_transactio)
The bottom line on "stock instead of cash": Swapping cash for shares doesn't change the fundamental math. DBMM has:
A $17M+ accumulated deficit 925M shares already outstanding out of a 2B authorized cap A going concern warning on the books A market cap around $562K (sub-penny stock)
A stock dividend in this context would be shuffling deck chairs. It creates dilution, consumes authorized share headroom, potentially creates new liquidation obligations, and still runs into the retained earnings requirement. It's not a capital structure tool at this stage — it's a distraction. The filings speak for themselves: https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001127475&type=10-Q
This shuts down the "well what if it's shares not cash" pivot cleanly and with numbers directly from DBMM's own SEC filings.
Market Data 
Markets 
