THIS INFORMATION STATEMENT IS BEING PROVIDED TO
YOU BY THE BOARD OF DIRECTORS OF BERGIO INTERNATIONAL, INC.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY
Bergio International, Inc.
12 Daniel Road East
Fairfield, NJ 07004
(973) 227-3230
INFORMATION STATEMENT
(Definitive)
February 27, 2019
NOTICE OF STOCKHOLDER ACTION BY WRITTEN CONSENT
GENERAL INFORMATION
To the Holders of Common Stock of Bergio International, Inc.:
This Information Statement has been filed with the Securities and Exchange Commission and is being furnished, pursuant to Section 14C of the Securities Exchange Act of 1934, as amended (the
Exchange Act
), to the holders (the
Stockholders
) of common stock, par value $0.0001 per share (the
Common Stock
), of Bergio International, Inc., a Delaware corporation (the
Company
), to notify the Stockholders that on February 14, 2019, the Company received a unanimous written consent in lieu of a meeting of the holders of Series A Preferred Stock, par value $0.0001 per share (the
Series A Preferred
), created by unanimous written consent of the Board of Directors of the Company (the
Board
), as permitted by the Companys Certificate of Incorporation, as may be amended (the
Certificate
). Each share of Series A Preferred has the equivalent of 110,024,059 votes of Common Stock (based upon the outstanding number of shares of Common Stock issued at the time hereof). Currently, there is one holder of Series A Preferred (the
Series A Stockholder
or the
Majority Stockholder
), holding fifty-one (51) shares of Series A Preferred, resulting in the Series A Stockholder holding in the aggregate approximately 51% of the total voting power of all issued and outstanding voting capital of the Company. The Series A Stockholder authorized the following:
The 1-for-10, 000 reverse stock split of the Companys issued and outstanding shares of Common Stock (the
Reverse Stock Split
) and decrease in authorized common stock to 50,000,000 shares of common stock (the Decrease in Authorized Common Stock).
On February 14, 2019, the Board approved the Reverse Stock Split and Decrease in Authorized Common Stock and recommended to the Majority Stockholder that he approve the Reverse Stock Split and Decrease in Authorized Common Stock. On February 14, 2019, the Majority Stockholder approved the Reverse Stock Split and Decrease in Authorized Common Stock by written consent in lieu of a meeting, in accordance with Delaware law. Accordingly, your consent is not required and is not being solicited in connection with the approval of the Reverse Stock Split.
2
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND A PROXY.
The Board believes that the Stockholders of the Company will benefit from the Reverse Stock Split because it believes that such Reverse Stock Split and Decrease in Authorized Common Stock could be a catalyst for an increase in the stock price of the Common Stock, which in turn could increase the marketability and liquidity of the Companys Common Stock, as well as increase the profile of the Company for private investment, acquisitions and other future opportunities that become available to the Company.
Accordingly, it is the Boards opinion that the Reverse Stock Split and Decrease in Authorized Common Stock would better position the Company to attract potential business candidates and provide the Stockholders a greater potential return.
INTRODUCTION
Delaware law provides that the written consent of the holders of outstanding shares of voting capital stock having not less than the minimum number of votes which would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted can approve an action in lieu of conducting a special stockholders' meeting convened for the specific purpose of such action. Delaware law, however, requires that in the event an action is approved by written consent, a company must provide prompt notice of the taking of any corporate action without a meeting to the stockholders of record who have not consented in writing to such action and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to a company.
This Information Statement contains a brief summary of the material aspects of the Reverse Stock Split and Decrease in Authorized Common Stock approved by the Board of Bergio International, Inc., (the
Company
,
we
,
our
, or
us
) and the holder of Series A Preferred Stock (the
Series A Preferred
), which constitute a majority of the voting capital stock of the Company.
Series A Preferred
By unanimous written consent of the Board (as permitted under Delaware law), the number, designation, rights, preferences and privileges of the Series A Preferred were established by the Board (as is permitted under Delaware law and by the Certificate of Incorporation of the Company, as may be amended). The designation, rights, preferences and privileges that the Board established for the Series A Preferred is set forth in a Certificate of Designation that was filed with the Secretary of State of the State of Delaware on September 2, 2011. Among other things, the Certificate of Designation provides that each one (1) share of Series A Preferred has voting rights equal to (x) 0.019607
multiplied by
the total issued and outstanding Common Stock and Preferred Stock eligible to vote at the time of the respective vote (the Numerator),
divided by
(y) 0.49,
minus
(z) the Numerator.
As a result of the voting rights granted to the Series A Preferred, the Series A Stockholders hold in the aggregate approximately 51% of the total voting power of all issued and outstanding voting capital of the Company.
3
As of February 27, 2019, there were issued and outstanding (i) 5,391,410,729 shares of our Common Stock, and (ii) 51 shares of Series A Preferred Stock. Based on the foregoing, the total aggregate amount of votes entitled to vote regarding the approval of the Reverse Stock Split approved by the Board is 11,002,637,746. Pursuant to Delaware law, the majority of the voting equity of the Company, or at least 5,501,318,873 votes, are required to approve the Reverse Stock Split by written consent. The Series A Stockholder, which holds in the aggregate 5,611,227,017 votes, or approximately 51% of the voting equity of the Company, has voted in favor of the Reverse Stock Split, thereby satisfying the requirement under Delaware law that at least a majority of the voting equity vote in favor of a corporate action by written consent.
The following table sets forth the name of the Series A Stockholder, the number of shares of Series A Preferred held by the Series A Stockholder, the total number of votes that the Series A Stockholder voted in favor of the Reverse Stock Split and Decrease in Authorized Common Stock and the percentage of the issued and outstanding voting equity of the Company that voted in favor thereof.
|
|
|
| |
Name of Series A
Stockholder
|
Number of
Shares of Series A
Preferred held
|
Number of Votes
held by such Series
A Stockholder
|
Number of Votes
that Voted in favor
of the Actions
|
Percentage of the
Voting Equity that
Voted in favor of the
Actions
|
Berge Abajian
|
51
|
5,611,227,017
|
5,611,227,017
|
51%
|
ACTIONS TO BE TAKEN
The Reverse Stock Split and Decrease in Authorized Common Stock will become effective on the date that we file the Certificate of Amendment to the Certificate of Incorporation of the Company (the
Amendment
) with the Secretary of State of the State of Delaware. We intend to file the Amendment with the Secretary of State of the State of Delaware promptly after the twentieth (20
th
) day following the date on which this Information Statement is mailed to the Stockholders.
Notwithstanding the foregoing, we must first notify FINRA of the intended Reverse Stock Split by filing the Issuer Company Related Action Notification Form no later than ten (10) days prior to the anticipated record date of such action. Our failure to provide such notice may constitute fraud under Section 10 of the Exchange Act.
We currently expect to file the Amendment on or about March 28, 2019.
1-FOR-10,000 REVERSE STOCK SPLIT AND DECREASE IN AUTHORIZED COMMON STOCK TO 50,000,000
GENERAL
Our Board approved by unanimous written consent a 1-for-10,000 reverse stock split (the
Reverse Stock Split
) and decrease in authorized common stock to 50,000,000 shares of stock (Decrease in Authorized Common Stock).
Pursuant to the Reverse Stock Split, each 10,000 shares of our Common Stock will be automatically converted, without any further action by the Stockholders, into one share of Common Stock. No fractional shares of Common Stock will be issued as the result of the Reverse Stock Split. Instead, the Company will issue to the Stockholders one additional share of Common Stock for each fractional share.
Pursuant to the Decrease in Authorized Common Stock, the authorized Common Stock will decrease from 10,000,000,000 to 50,000,000 shares of stock.
4
The Company anticipates that the effective date of the Reverse Stock Split and Decrease in Authorized Common Stock will be sometime after March 18, 2019.
PLEASE NOTE THAT THE REVERSE STOCK
SPLIT AND DECREASE IN AUTHORIZED COMMON STOCK WILL NOT CHANGE YOUR PROPORTIONATE EQUITY
INTERESTS IN THE COMPANY, EXCEPT AS MAY RESULT FROM THE ISSUANCE OF SHARES PURSUANT TO THE FRACTIONAL SHARES.
PURPOSE AND EFFECT OF THE REVERSE STOCK SPLIT AND DECREASE IN AUTHORIZED COMMON STOCK
Our Board believes that, among other reasons, the number of outstanding shares of Common Stock have contributed to a lack of investor interest in the Company and has made it difficult for the Company to attract new investors and potential business candidates. Our Board proposed the Reverse Stock Split as one method to attract business opportunities for the Company. Our Board believes that the Reverse Stock Split and Decrease in Authorized Common Stock could increase the stock price of our Common Stock and that the higher stock price could help generate interest in the Company by investors and provide business opportunities.
However, the effect of the Reverse Stock Split, if any, upon the stock price for our Common Stock cannot be predicted, and the history of similar stock split combinations for companies like us is varied. Further, we cannot assure you that the stock price of our Common Stock after the Reverse Stock Split will rise in proportion to the reduction in the number of shares of Common Stock outstanding as a result of the Reverse Stock Split because, among other things, the stock price of our Common Stock may be based on our performance and other factors as well.
The principal effect of the Reverse Stock Split will be the reduction in the number of shares of Common Stock issued and outstanding from 5,391,410,729 shares as of February 27, 2019 to approximately 539,141 shares (depending on the number of fractional shares that are issued). The Reverse Stock Split will affect all of our Stockholders uniformly and will not affect any Stockholders percentage ownership interest in the Company or proportionate voting power, except to the extent that the Reverse Stock Split results in any of our Stockholders holding a fractional share of our Common Stock. The Common Stock issued pursuant to the Reverse Stock Split will remain fully paid and non-assessable. The Reverse Stock Split and Decrease in Authorized Common Stock shall not affect any rights, privileges or obligations with respect to the shares of Common Stock existing prior to the Reverse Stock Split, nor does it increase or decrease the market capitalization of the Company. The Reverse Stock Split and Decrease in Authorized Common Stock is not intended as, and will not have the effect of, a going private transaction under Rule 13e-3 of the Exchange Act. We will continue to be subject to the periodic reporting requirements of the Exchange Act.
By reducing the number of issued and outstanding shares of Common Stock, more shares of Common Stock are available for issuance as a result of the Reverse Stock Split. The Board believes that the availability of more shares of Common Stock for issuance will allow the Company greater flexibility in pursuing financing from investors and issuing shares of Common Stock in exchange for such financing, meeting business needs as they arise, taking advantage of favorable opportunities, and responding to a changing corporate environment. Although the foregoing effect is mitigated somewhat by the reduction in the number of authorized shares of Common Stock described below, the number of shares of Common Stock remaining available for issuance is still greater than prior to the Reverse Stock Split because we are not reducing the total number of authorized shares of Common Stock by the same ratio as the Reverse Stock Split.
5
The following chart depicts the capitalization structure of the Company both pre-Reverse Stock Split and post-Reverse Stock Split (the post-split shares of Common Stock may differ slightly based on the number of fractional shares):
Pre-Reverse Stock Split
and Decrease in Authorized Common Stock
|
| |
Authorized Shares
of Common Stock
|
Issued Shares
|
Authorized but Unissued
|
10,000,000,000
|
5.391.410,729
|
608,589,271
|
Post-Reverse Stock Split
and Decrease in Authorized Common Stock
|
| |
Authorized Shares
|
Issued Shares
|
Authorized but Unissued
|
50,000,000
|
539,141
|
49,460,859
|
CERTAIN RISKS ASSOCIATED WITH REVERSE STOCK SPLIT
You should recognize that you will own a lesser number of shares of Common Stock than you presently own. While we hope that the Reverse Stock Split will result in an increase in the potential stock price of our Common Stock, we cannot assure you that the Reverse Stock Split will increase the potential stock price of our Common Stock by a multiple equal to the inverse of the Reverse Stock Split ratio or result in the permanent increase in any potential stock price (which is dependent upon many factors, including our performance and prospects). Should the stock price of our Common Stock decline, the percentage decline as an absolute number and as a percentage of our overall market capitalization may be greater than would occur in the absence of a Reverse Stock Split. Furthermore, the possibility exists that potential liquidity in the stock price of our Common Stock could be adversely affected by the reduced number of shares of Common Stock that would be outstanding after the Reverse Stock Split. In addition, the Reverse Stock Split will increase the number of Stockholders of the Company who own odd lots (less than 100 shares). Stockholders who hold odd lots typically will experience an increase in the cost of selling their shares, as well as possible greater difficulty in effecting such sales. As a result, we cannot assure you that the Reverse Stock Split will achieve the desired results that have been outlined above.
Following the Reverse Stock split, there will be approximately 49,460,859additional shares of Common Stock available for issuance by the Board, without further shareholder approval, for stock dividends, acquisitions, raising additional capital, stock options or other corporate purposes. The additional shares of Common Stock could be used for potential strategic transactions, including, among other things, acquisitions, strategic partnerships, joint ventures, restructurings, business combinations and investments, although there are no immediate plans to do so. Assurances cannot be provided that any such transactions will be consummated on favorable terms or at all, that they will enhance stockholder value or that they will not adversely affect the Companys business or the trading price of the Common Stock. Any such issuance of additional shares of Common Stock could have the effect of diluting the earnings per share and book value per share of outstanding shares of Common Stock, and such additional shares could be used to dilute the stock ownership or voting rights of a person seeking to obtain control of the Company. The Board is not aware of any attempt to take control of the Company and has not presented this proposal with the intention that the increase in the number of available authorized shares of Common Stock be used as a type of antitakeover device. Any additional Common Stock, when issued, would have the same rights and preferences as the shares of Common Stock presently outstanding. Other than convertible notes and other agreements previously disclosed by the Company in its public filings, there is currently no plan, agreement or other understanding that could require the Company to issue shares of Common Stock.
6
ANTI-TAKEOVER EFFECTS OF THE REVERSE STOCK SPLIT
THE OVERALL EFFECT OF THE REVERSE STOCK SPLIT MAY BE TO RENDER MORE DIFFICULT THE CONSUMMATION OF MERGERS WITH THE COMPANY OR THE ASSUMPTION OF CONTROL BY A PRINCIPAL STOCKHOLDER, AND THUS MAKE IT DIFFICULT TO REMOVE MANAGEMENT.
A possible effect of the Reverse Stock Split is to discourage a merger, tender offer or proxy contest, or the assumption of control by a holder of a large block of the Companys voting securities and the removal of incumbent management. Our management could use the additional shares of Common Stock available for issuance to resist or frustrate a third-party take-over effort favored by a majority of the independent Stockholders that would provide an above market premium by issuing additional shares of Common Stock.
The Reverse Stock Split is not the result of managements knowledge of an effort to accumulate the Companys securities or to obtain control of the Company by means of a merger, tender offer, solicitation or otherwise. Nor is the Reverse Stock Split a plan by management to adopt a series of amendments to the Companys charter or by-laws to institute an anti-takeover provision. The Company does not have any plans or proposals to adopt other provisions or enter into other arrangements that may have material anti-takeover consequences. As discussed above, the reason for the Reverse Stock Split is to increase the amount of shares of Common Stock that the Company is able to issue in order to attract potential investors and conduct equity financings.
PROCEDURE FOR EFFECTING REVERSE STOCK SPLIT AND EXCHANGE OF STOCK CERTIFICATES
We anticipate that the Reverse Stock Split will become effective sometime after March 18, 2019, or as soon thereafter as is reasonably practicable (the
Effective Date
). Beginning on the Effective Date, each stock certificate representing pre-Reverse Stock Split shares of Common Stock will be deemed for all corporate purposes to evidence ownership of post-Reverse Stock Split shares of Common Stock.
Our transfer agent, Empire Stock Transfer, will act as exchange agent (the
Exchange Agent
) for purposes of implementing the exchange of stock certificates. Holders of pre- Reverse Stock Split shares of Common Stock are asked to surrender to the Exchange Agent stock certificates representing pre-Reverse Stock Split shares of Common Stock in exchange for stock certificates representing post- Reverse Stock Split shares of Common Stock in accordance with the procedures set forth in the letter of transmittal enclosed with this Information Statement. No new stock certificates will be issued to a Stockholder until such Stockholder has surrendered the outstanding stock certificate(s) held by such Stockholder, together with a properly completed and executed letter of transmittal.
Further, prior to filing the amendment to the Certificate of Incorporation reflecting the Reverse Stock Split, we must first notify the Financial Industry Regulatory Authority (
FINRA
) by filing the Issuer Company Related Action Notification Form no later than ten (10) days prior to our anticipated record date of March 18, 2019, for the Reverse Stock Split. Our failure to provide such notice may constitute fraud under Section 10 of the Exchange Act.
7
STOCKHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATES AND SHOULD NOT SUBMIT ANY CERTIFICATES WITHOUT THE LETTER OF TRANSMITTAL.
FRACTIONAL SHARES
No fractional shares of Common Stock will be issued as the result of the Reverse Stock Split and Decrease in Authorized Common Stock. Instead, the Company will issue to the Stockholders one additional share of Common Stock for each fractional share.
NO APPRAISAL RIGHTS
Under Delaware law, our Stockholders are not entitled to appraisal rights in connection with the Reverse Stock Split.