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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

 

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

 

For the quarterly period ended: March 31, 2021

 

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

 

Commission File Number: 333-150029

 

BERGIO INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

 

Wyoming

 

27-1338257

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

12 Daniel Road E.

Fairfield, NJ 07004

(Address of principal executive offices)

 

(973) 227-3230

(Registrant’s telephone number, including area code)

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange

on which registered

N/A

 

N/A

 

N/A

 

Securities registered pursuant to Section 12(g) of the Act:

Common Stock $.00001 par value

(Title of class)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months, and (2) has been subject to such filing requirements for the past 90 days.  Yes No

 

Indicate by check mark whether the registrant has submitted electronically 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, a non-accelerated filer,  smaller  reporting  company,  or an emerging  growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

Emerging growth company


1


If an emerging growth company, 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

 

As of May 27, 2021 there were 481,654,931 shares outstanding of the registrant’s common stock.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


2


TABLE OF CONTENTS

 

 

PART I - FINANCIAL INFORMATION

4

Item 1. Financial Statements

4

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

21

Item 3. Quantitative and Qualitative Disclosures about Market Risk

27

Item 4. Controls and Procedures

27

PART II - OTHER INFORMATION

28

Item 1. Legal Proceedings.

28

Item 1A. Risk Factors.

28

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

28

Item 3. Defaults upon Senior Securities.

28

Item 4. Mine Safety Disclosure.

28

Item 5. Other Information.

28

Item 6. Exhibits.

29

SIGNATURES

30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


3


 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

BERGIO INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS

 

March 31,

2021

 

December 31,

2020

 

(unaudited)

 

 

ASSETS:

 

 

 

Current assets:

 

 

 

Cash

$

831,003

 

$

70,081

Accounts receivable, net of allowance for doubtful accounts of

 $-0- at March 31, 2021 and $-0- at December 31, 2020

 

119,806

 

 

100,255

Inventories

 

2,304,640

 

 

1,143,037

Prepaid expenses and other current assets

 

234,507

 

 

6,668

Deferred financing costs

 

120,267

 

 

1,591

Total current assets

 

3,610,223

 

 

1,321,632

 

 

 

 

 

 

Property and equipment, net

 

109,898

 

 

94,144

Goodwill

 

2,903,470

 

 

-

Intangible assets

 

692,742

 

 

-

Operating lease right-of-use assets

 

50,753

 

 

53,955

Investment in unconsolidated affiliate

 

5,828

 

 

5,828

Total assets

$

7,372,914

 

$

1,475,559

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT:

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

Accounts payable and accrued liabilities

$

1,492,590

 

$

189,341

Loans payable

 

1,801,084

 

 

312,300

Convertible debt

 

1,015,568

 

 

232,870

Deferred compensation - CEO - current

 

160,899

 

 

125,399

Advances from Principal Executive Officer and accrued interest

 

25,121

 

 

31,313

Derivative liability

 

248,554

 

 

201,430

Derivative liability - acquisition

 

821,738

 

 

-

Operating lease liabilities - current

 

14,144

 

 

13,665

Total current liabilities

 

5,579,698

 

 

1,106,318

 

 

 

 

 

 

Long-term Liabilities:

 

 

 

 

 

Deferred compensation - CEO- long-term portion

 

322,172

 

 

320,172

Long-term debt

 

150,000

 

 

-

Advances from Principal Executive Officer and accrued interest

 

177,828

 

 

179,828

Operating lease liabilities - long-term

 

36,609

 

 

40,289

Total long-term liabilities

 

686,609

 

 

540,289

Total Liabilities

 

6,266,307

 

 

1,646,607

 

 

 

 

 

 

Commitments and contingencies

 

-

 

 

-

 

 

 

 

 

 

Stockholders’ deficit

 

 

 

 

 

Series A preferred stock - $0.00001 par value, 51 Shares

 Authorized, 51 and 51 shares issued and outstanding

 

-

 

 

-

Common stock, $0.00001 par value; 6,000,000,000 shares

 Authorized 63,732,292 and 19,289,141 issued and

 outstanding, respectively

 

1,701

 

 

908

Treasury stock

 

103,700

 

 

103,700

Additional paid-in capital

 

13,287,333

 

 

11,532,849

Accumulated deficit

 

(12,286,127)

 

 

(11,808,505)

Total stockholders’ deficit

 

1,106,607

 

 

(171,048)

Total liabilities and stockholders’ deficit

$

7,372,914

 

$

1,475,559

 

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


4


BERGIO INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three Months Ended March 31,

 

2021

 

2020

 

 

 

 

 

Sales, net

 

$

1,149,314

 

$

75,393

 

 

 

 

 

 

 

Cost of sales

 

 

310,166

 

 

26,306

 

 

 

 

 

 

 

Gross profit

 

 

839,148

 

 

49,087

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

1,204,230

 

 

228,103

Total operating expenses

 

 

1,204,230

 

 

228,103

 

 

 

 

 

 

 

Loss from operations

 

 

(365,082)

 

 

(179,016)

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

Interest expense

 

 

(46,913)

 

 

(18,770)

Amortization of debt discount

 

 

(139,053)

 

 

(52,978)

Derivative expense

 

 

(125,367)

 

 

-

Amortization of deferred financing costs

 

 

(19,949)

 

 

(6,755)

Gain on extinguishment of debt

 

 

342,309

 

 

-

Change in fair value of derivatives

 

 

(123,567)

 

 

(1,213,382)

Total other income (expense)

 

 

(112,540)

 

 

(1,291,885)

 

 

 

 

 

 

 

Loss before provision for income taxes

 

 

(477,622)

 

 

(1,470,901)

 

 

 

 

 

 

 

Provision for income taxes

 

 

-

 

 

-

 

 

 

 

 

 

 

Net loss

 

 

(477,622)

 

 

(1,470,901)

 

 

 

 

 

 

 

Net loss attributable to the non-controlling interest in

 Aphrodite’s Marketing, Inc.

 

 

(76,268)

 

 

-

 

 

 

 

 

 

 

Net loss attributable to Bergio International, Inc.

 

 

(401,354)

 

$

(1,470,901)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per common share - basic and diluted

 

$

(0.00)

 

$

(0.07)

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 Basic and Diluted

 

 

138,209,329

 

 

20,920,043

 

 

 

 

 

 

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


5


BERGIO INTERNATIONAL, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDER’S EQUITY (UNAUDITED)

AS OF MARCH 31, 2021

 

 

Preferred Stock

Common Stock

 

 

 

 

 

Shares

Amount

Shares

Amount

Additional

Paid in

Capital

Treasury

Stock

Accumulated

Deficit

Non-

controlling

interest in

Aphrodite’s

Marketing

Total

Stockholders’

Deficit

 

 

 

 

 

 

 

 

 

 

Balance at

January 1, 2021

51

$

-

90,823,799

$

908

$

11,532,849

$

103,700

$

(11,808,505)

$

-

$

(171,048)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of stock

for debt conversion

-

 

-

46,056,319

 

460

 

164,392

 

-

 

-

 

-

 

164,852

Value of preferred stock at

issuance associated with the

acquisition of Aphrodite’s

Marketing

-

 

-

-

 

-

 

664,105

 

-

 

-

 

-

 

664,105

Intrinsic value associated

with warrants

-

 

-

-

 

-

 

687,500

 

-

 

-

 

-

 

687,500

Proceeds from grants

-

 

-

-

 

-

 

5,000

 

-

 

-

 

-

 

5,000

Issuance of new common

stock

-

 

-

33,403,000

 

333

 

233,487

 

-

 

-

 

-

 

233,820

Net loss

-

 

-

 

 

 

 

 

 

 

 

(401,354)

 

(76,268)

 

(477,622)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at

March 31, 2021

51

 

-

563,815,056

 

1,701

 

13,287,333

 

103,700

 

(12,209,859)

 

(76,268)

 

1,106,607

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at

January 1, 2020

-

 

-

19,289,141

 

193

 

11,047,546

 

-

 

(11,660,455)

 

-

 

(612,716)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock issued for services

-

 

-

4,000,000

 

40

 

147,960

 

-

 

-

 

-

 

148,000

Issuance of stock

for debt conversion

-

 

-

1,160,804

 

12

 

23,088

 

-

 

-

 

-

 

23,100

Net loss

-

 

-

-

 

-

 

-

 

 

 

(1,470,901)

 

-

 

(1,470,901)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at

March 31, 2020

51

$

-

24,449,945

$

245

$

11,218,594

$

-

$

(13,131,356)

$

-

$

(1,912,517)

 

 

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


6


BERGIO INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

Three Months Ended March 31,

2021

 

2020

Operating activities:

 

 

 

Net loss

$

(401,354)

 

$

(1,470,901)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

Non-controlling interest

 

(76,268)

 

 

-

Depreciation and amortization

 

57,540

 

 

8,425

Amortization of deferred financing costs

 

19,949

 

 

6,755

Amortization of debt discount

 

139,053

 

 

52,978

Derivative expense

 

125,366

 

 

-

Gain on extinguishment of debt

 

(342,309)

 

 

-

Change in fair value of derivative liabilities

 

128,367

 

 

1,213,382

Issuance of stock for services

 

-

 

 

148,000

 

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

(Increase) decrease in accounts receivable

 

(19,551)

 

 

7,821

Decrease (increase) in inventory

 

(42,010)

 

 

(22,835)

(Increase) in prepaid expenses and other current assets

 

121,163

 

 

(28,120)

Increase in deferred compensation

 

37,500

 

 

25,000

Increase in accounts payable and accrued liabilities

 

6,046

 

 

48,284

Net cash used in operating activities

 

(251,308)

 

 

(11,210)

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

Capital expenditures

 

(40,169)

 

 

-

Net used in investing activities

 

(40,169)

 

 

-

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

Proceeds from sale of common stock

 

244,203

 

 

-

Proceeds from PPP Loan

 

18,291

 

 

-

Proceeds from convertible debt, net

 

1,515,500

 

 

-

Repayment of convertible debt

 

(30,000)

 

 

-

Repayment of loans payable

 

(120,000)

 

 

-

Repayment of debt

 

(567,403)

 

 

-

Advances from (payments to) Principal Executive Officer, net

 

(8,192)

 

 

(11,580)

Net provided by (used in) financing activities

 

1,052,399

 

 

(11,580)

 

 

 

 

 

 

Net change in cash

 

760,922

 

 

(22,790)

 

 

 

 

 

 

Cash - beginning of periods

 

70,081

 

 

22,790

 

 

 

 

 

 

Cash - end of periods

$

831,003

 

$

0

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

Cash paid for interest

$

-

 

$

-

Cash paid for income taxes

$

-

 

$

-

 

 

 

 

 

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

Issuance of common stock for convertible debt and accrued interest

$

163,727

 

$

23,100

 

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


7


 

BERGIO INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Note 1 - Nature of Operations and Basis of Presentation

 

Organization and Nature of Operations

 

Bergio International, Inc. (the “Company”) was incorporated in the State of Delaware on July 24, 2007 under the name Alba Mineral Exploration, Inc. On October 21, 2009, as a result of a Share Exchange Agreement, the corporation’s name was changed to Bergio International, Inc. On February 19, 2020, the Company changed its state of incorporation to Wyoming. The Company is engaged in the product design, manufacturing, distribution of fine jewelry primarily in the United States and is headquartered in Fairfield, New Jersey. The Company’s intent is to take advantage of the Bergio brand and establish a chain of retail stores worldwide. Our branded product lines are products and/or collections designed by our designer and CEO Berge Abajian and will be the centerpiece of our retail stores.

 

In September 2019, Bergio International, Inc. filed a Certificate of Amendment to the Certificate of Incorporation to effectuate a 1-for-10,000 reverse stock split of the Company’s common stock. All share and per share data have been adjusted to reflect such stock split. In July 2020, the Company filed a Registration Statement on Form S-1 with the purpose of providing funds for its operational plans as well as paying off debt to improve the Company’s financial position. There can be no assurance that the Company can raise sufficient from this offering to fund its plans.

 

On February 10, 2021, Bergio International, Inc. entered into an Acquisition Agreement with Digital Age Business, Inc., a Florida corporation, (“Digital Age”), pursuant to which the shareholders of Digital Age agreed to sell all of the assets and liabilities of its Aphrodite’s business to a recently formed Company known as Aphrodite’s Marketing, Inc., a Wyoming corporation in exchange for newly created Series B Preferred Stock of the Company. The Company owns 51% of this newly formed company.

 

Basis of Presentation

 

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary consisting of normal recurring adjustments to present fairly the financial position of the Company as of March 31, 2021, the results of operations for the three months ended March 31, 2021 and 2020, and statements of cash flows for the three months ended March 31, 2021 and 2020. These results are not necessarily indicative of the results to be expected for the full year. The financial statements have been prepared in accordance with the requirements of Form 10-Q and consequently do not include disclosures normally made in an Annual Report on Form 10-K. The December 31, 2020 balance sheet included herein was derived from the audited financial statements included in the Company’s Annual Report on Form 10-K as of that date. Accordingly, the financial statements included herein should be reviewed in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2020, as filed with the Securities and Exchange Commission (“SEC”) on March 18, 2021 (the “Annual Report”).

 

Impact of the COVID-19 Coronavirus

 

The Company’s operations have been affected by the recent and ongoing outbreak of the coronavirus disease 2019 (COVID-19) which in March 2020, was declared a pandemic by the World Health Organization. The ultimate disruption which may be caused by the outbreak is uncertain; however, it has resulted in a material adverse impact on the Company’s financial position, operations and cash flows. Areas affected include, but are not limited to, disruption to the Company’s customers and revenue, including a significant disruption in consumer demand and accessories,  labor workforce, inability of customers to pay outstanding accounts receivable due and owing to the Company as they limit or shut down their businesses,  customers seeking relief or  extended payment plans relating to accounts receivable due and owing to the Company, unavailability of products and supplies used in operations, and the decline in value of assets held by the Company, including property and equipment. As such, the comparability of the Company’s operating results has been affected by significant adverse impacts related to the COVID-19 pandemic.


8


 

BERGIO INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

The Company has increased its online presence to minimize the impact of having to close its retail stores as well as directing efforts towards its wholesale operations. The Company, as mentioned entered into an agreement to form a newly created company to increase its online presence.

 

Non-controlling Interest

 

Non-controlling interest represents third party ownership in the net assets of our consolidated subsidiaries. For financial reporting purposes, the assets and liabilities of our majority owned subsidiaries are consolidated with those of our own, with any third party investor’s interest shown as non-controlling interest. On February 9, 2021, the Company acquired a 51% interest in Aphrodite’s Marketing in exchange for funding the company’s operations and 30% of the Company. The minority holder contributed inventory and a customer list.

 

Note 2 - Going Concern

 

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern.

 

The Company has suffered recurring losses and has an accumulated deficit of $12,286,127 as of March 31, 2021. As of March 31, 2021, the Company had $1,015,568 in convertible debentures and $1,801,084 in loans payable. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The recoverability of a major portion of the recorded asset amounts shown in the accompanying consolidated balance sheet is dependent upon continued operations of the Company, which in turn, is dependent upon the Company’s ability to raise capital and/or generate positive cash flows from operations.

 

It is our intention to establish Bergio as a holding company for the purpose of establishing retails stores worldwide. Our branded product lines are products and/or collections designed by our designer and CEO Berge Abajian and will be the centerpiece of our retail stores. We also intend to complement our own quality-designed jewelry with other products and our own specially-designed handbags. This is in line with our strategy and belief that a brand name can create an association with innovation, design and quality which helps add value to the individual products as well as facilitate the introduction of new products. It is our intention to open elegant stores in “high-end” areas and provide excellent service in our stores which will be staffed with knowledgeable professionals.

 

The Company has also increased its online presence to minimize the impact of having to close its retail stores as well as directing efforts towards its wholesale operations. The newly formed company, of which Bergio owns 51%, will greatly enhance our online presence and provide the opportunity for future growth.

 

These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

 

Note 3 - Summary of Significant Accounting Policies

 

Principles of Consolidation

 

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and include the Company and its wholly-owned subsidiary as well as its investment in Aphrodite’s Marketing.. All significant inter-company accounts and transactions have been eliminated.

 

During the three months ended March 31, 2021, there have been no other material changes in the Company’s significant accounting policies to those previously disclosed in the Company’s Annual Report.

 

The Company evaluated subsequent events, which are events or transactions that occurred after March 31, 2021 through the issuance of the accompanying financial statements.


9


 

BERGIO INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Note 4 - Net Income (Loss) per Share

 

Basic income (loss) per share includes no dilution and is computed by dividing earnings available to common stockholders by the weighted average number of common shares outstanding for the period. Dilutive earnings per share reflect the potential dilution of securities that could occur through the effect of common shares issuable upon the exercise of stock options, warrants and convertible securities. Basic net loss per share equaled the diluted loss per share for the three months ended March 31, 2021 and 2020, since the effect of shares potentially issuable upon the exercise or conversion was anti-dilutive. Equity instruments that may dilute earnings per share in the future are listed in Notes 6 and 7 below. For the three months ended March 31, 2021, 1,032,197,126 shares issuable upon the exercise of warrants and conversion of convertible debt were not included in the computation of diluted net loss because their inclusion would be anti-dilutive. For the three months ended March 31, 2020, 31,768,560 shares issuable upon the conversion of convertible debt were not included in the computation of diluted net loss because their inclusion would be anti-dilutive.

 

The following table sets forth the computation of earnings per share:

 

 

Three Months Ended

March 31, 2021

 

March 31, 2020

Basic net loss per share computation:

 

 

 

Net loss

$

(477,592)

 

$

(1,470,901)

Weighted-average common shares outstanding

 

138,209,329

 

 

20,920,043

Basic net loss per share

$

(0.00)

 

$

(0.07)

 

 

 

 

 

 

Diluted net loss per share computation:

 

 

 

 

 

Net loss

$

(477,592)

 

$

(1,470,901)

Weighted-average common shares outstanding

 

138,209,329

 

 

20,920,043

Incremental shares attributable to the shares issuable upon conversion of convertible debt

 

-

 

 

-

Total adjusted weighted-average shares

 

138,209,329

 

 

20,920,043

Diluted net loss per share

$

(0.00)

 

$

(0.07)

 

 

5 - New Authoritative Accounting Guidance

 

No recently issued accounting pronouncements had or are expected to have a material impact on the Company’s consolidated financial statements.

 

Note 6 - Convertible Debt

 

Auctus Funds, LLC.

 

On November 6, 2019, the Company entered into a 12% convertible promissory note in the amount of $125,000 with Auctus Fund, LLC. The principal and accrued interest is payable on or before August 20, 2020 and interest accrues at the rate of 12% per annum. Interest shall be computed on the basis of a 365-day year and the actual number of days elapsed. Any amount of principal or interest on this note which is not paid when due shall bear interest at the rate of the lesser of (i) twenty-four percent (24%) per annum and (ii) the maximum amount permitted under law from the due date thereof until the same is paid (the “Default Interest”). The Holder shall have the right from time to time to convert all or any part of the outstanding and unpaid principal, interest, penalties, and all other amounts under this note into fully paid and non-assessable shares of common stock.

 


10


 

BERGIO INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

The conversion price shall equal the lesser of: (i) the lowest trading price during the previous twenty-five (25) trading day period ending on the latest complete trading day prior to the date of this Note, and (ii) the variable conversion which shall mean 60% multiplied by the lowest trading price for the common stock during the twenty-five (25) trading day period ending on the latest complete trading day prior to the conversion date. Furthermore, the conversion price may be adjusted downward if, within three (3) business days of the transmittal of the notice of conversion to the Borrower or Borrower’s transfer agent, the Common Stock has a closing bid which is 5% or lower than that set forth in the Notice of Conversion.

 

During the three months ended March 31, 2021, principal of $89,651 and $6,495 of accrued interest were converted into 23,144,396, shares of common stock. The outstanding balances at March 31, 2021 and December 31, 2020 were $1,748 and $91,399, respectively, with accrued interest of $-0- and $-0- at March 31, 202 and December 31, 2020, respectively.

 

Power Up Lending Group

 

On July 13, 2020, the Company entered into a 8% convertible note in the amount of $55,000 with Power Up Lending Group. The principal and accrued interest is payable on or before July 13, 2021. The note may not be prepaid except under certain conditions. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid (“Default Interest”). At the option of the Holder, but not before 180 days from the date of issuance, the holder may elect to convert all or part of the convertible into the Company’s common stock. The conversion price shall mean 63% multiplied by the lowest trading price (representing a discount rate of 37%) during the previous twenty-five (15) trading day period ending on the latest complete trading day prior to the date of this note. During the three months ended March 31, 2021, principal of 55,000 and $2,200 of accrued interest were converted into 19,066,667, shares of common stock. The outstanding balances at March 31, 2021 and December 31, 2020 were $-0- and $55,000, respectively, with accrued interest of $-0- and $2,061 at March 31, 2021 and December 31, 2020, respectively.

 

On October 26, 2020, the Company entered into a 8% convertible note in the amount of $44,000 with Power Up Lending Group. The principal and accrued interest is payable on or before October 26, 2021. The note may not be prepaid except under certain conditions. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid (“Default Interest”). At the option of the Holder, but not before 180 days from the date of issuance, the holder may elect to convert all or part of the convertible into the Company’s common stock. The conversion price shall mean 63% multiplied by the lowest trading price (representing a discount rate of 37%) during the previous twenty-five (15) trading day period ending on the latest complete trading day prior to the date of this note. There were no conversions during the three months ended March 31, 2021. The outstanding balances at March 31, 2021 and December 31, 2020 were $44,000 and $44,000, respectively, with accrued interest of $636 and $868 at March 31, 2021 and December 31, 2020, respectively.

 

On November 9, 2020, the Company entered into a 8% convertible note in the amount of $35,000 with Power Up Lending Group. The principal and accrued interest is payable on or before November 9, 2021. The note may not be prepaid except under certain conditions. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid (“Default Interest”). At the option of the Holder, but not before 180 days from the date of issuance, the holder may elect to convert all or part of the convertible into the Company’s common stock. The conversion price shall mean 63% multiplied by the lowest trading price (representing a discount rate of 37%) during the previous twenty-five (15) trading day period ending on the latest complete trading day prior to the date of this note. There were no conversions during the three months ended March 31, 2021. The outstanding balances at March 31, 2021 and December 31, 2020 were $35,000 and $35,000, respectively, with accrued interest of $686 and $399 at March 31, 2021 and December 31, 2020, respectively.


11


 

BERGIO INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

On January 15, 2021, the Company entered into a 8% convertible note in the amount of $43,500 with Power Up Lending Group. The principal and accrued interest is payable on or before January 15, 2022. The note may not be prepaid except under certain conditions. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid (“Default Interest”). At the option of the Holder, but not before 180 days from the date of issuance, the holder may elect to convert all or part of the convertible into the Company’s common stock. The conversion price shall mean 63% multiplied by the lowest trading price (representing a discount rate of 37%) during the previous twenty-five (15) trading day period ending on the latest complete trading day prior to the date of this note. There were no conversions during the three months ended March 31, 2021. The outstanding balance at March 31, 2021 was $43,500, with accrued interest of $679 at March 31, 2021.

 

On January 29, 2021, the Company entered into a 8% convertible note in the amount of $33,500 with Power Up Lending Group. The principal and accrued interest is payable on or before January 29, 2022. The note may not be prepaid except under certain conditions. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid (“Default Interest”). At the option of the Holder, but not before 180 days from the date of issuance, the holder may elect to convert all or part of the convertible into the Company’s common stock. The conversion price shall mean 63% multiplied by the lowest trading price (representing a discount rate of 37%) during the previous twenty-five (15) trading day period ending on the latest complete trading day prior to the date of this note. There were no conversions during the three months ended March 31, 2021. The outstanding balance at March 31, 2021 was $33,500, with accrued interest of $448 at March 31, 2021.

 

On March 3, 2021, the Company entered into a 8% convertible note in the amount of $63,500 with Power Up Lending Group. The principal and accrued interest is payable on or before March 3, 2022. The note may not be prepaid except under certain conditions. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid (“Default Interest”). At the option of the Holder, but not before 180 days from the date of issuance, the holder may elect to convert all or part of the convertible into the Company’s common stock. The conversion price shall mean 63% multiplied by the lowest trading price (representing a discount rate of 37%) during the previous twenty-five (15) trading day period ending on the latest complete trading day prior to the date of this note. There were no conversions during the three months ended March 31, 2021. The outstanding balance at March 31, 2021 was $63,500, with accrued interest of $390 at March 31, 2021.

 

Trillium Partners LLP, 3a Capital Establishment, JP Carey Limited Partners, LP, and JP Carey Enterprises, Inc.

 

On February 11, 2021, the Company entered into 10% convertible notes totaling $1,512,500 less legal and financing costs of $137,500 for net proceeds of $1,375,000. The principal and accrued interest is payable on or before February 11, 2022. The note may not be prepaid except under certain conditions. The Company shall pay interest on a quarterly basis in arrears in cash to the Holder commencing on March 1, 2021 and continuing thereafter on each quarterly anniversary of such date until the Obligations have been satisfied in full, on the aggregate then outstanding principal amount of this Note at the rate of ten percent (10%) per annum. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty four percent (24%) per annum from the due date thereof until the same is paid (“Default Interest”). At the option of the Holder, but not before 180 days from the date of issuance, the holder may elect to convert all or part of the convertible into the Company’s common stock. The conversion price in effect on any Conversion Date shall be equal to $0.0015. There were no conversions during the three months ended March 31, 2021. The outstanding balance at March 31, 2021 was $1,512,500 with accrued interest of $19,470 at March 31, 2021.


12


 

BERGIO INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Note 7. Derivative Liability

 

The Company accounts for the fair value of the conversion features of its convertible debt in accordance with ASC Topic No. 815-15 “Derivatives and Hedging; Embedded Derivatives” (“Topic No. 815-15”). Topic No. 815-15 requires the Company to bifurcate and separately account for the conversion features as an embedded derivative contained in the Company’s convertible debt. The Company is required to carry the embedded derivative on its balance sheet at fair value and account for any unrealized change in fair value as a component of results of operations. The Company values the embedded derivatives using the Black-Scholes pricing model. During the three months ended March 31, 2020, the Company recorded debt discount in the amount of $139,053 as compared to $52,978 for the three months ended March 31, 2020. Unamortized debt discount at March 31, 2021 and December 31, 2020 were $718,181 and $29,234, respectively. The derivative liability is revalued each reporting period using the Black-Scholes model. As of March 31, 2021 and December 31, 2020, the derivative liability was $248,554 and $201,430, respectively.

 

The Black-Scholes model utilized the following inputs to value the derivative liability at the date of issuance of the convertible note at March 31, 2021:

 

Stock Price - The stock price was based closing price of the Company’s stock as of the valuation date, which was $0.014 at March 31, 2021.

 

Variable Conversion Prices - The conversion price was based on: 63% multiplied by the lowest trading price in the fifteen (15) days prior to the conversion at March 31, 2021 for Power Up Lending Group.

 

Time to Maturity - The time to maturity was determined based on the length of time between the valuation date and the maturity of the debt. Time to maturity ranged from 104 to 132 days at March 31, 2021

 

Risk Free Rate - The risk free rate was based on the Treasury Note rate as of the valuation dates with a term commensurate with the remaining term of the debt. The risk free rate at March 31, 2021 was 0.07%, based on the term of the note.

 

Volatility - The volatility was based on the historical volatility of the Company. The average volatility was 372.90% at March 31, 2021.

 

Note 8 - Loans Payable

 

Fife, Typenex and Iliad

 

In December 2012, the Company entered into a $325,000 convertible note with Fife consisting of three tranches to be drawn down with the first tranche totaling $125,000, including $25,000 in loan costs and additional two tranches totaling $200,000. The note bears a 5% annual interest rate and matures eighteen months from the date of issuance. The note is convertible into shares of the Company’s common stock based on 70% of the average of the three lowest closing prices of the common stock for the proceeding 15 consecutive trading days immediately prior to the conversion. During 2013, the conversion price was fixed at $0.005 per share. As of December 31, 2012, the Company only drew down the first tranche totaling $125,000. On February 11, 2013, April 5, 2013, April 23, 2013, and July 1, 2013, the Company drew down an additional $250,000.

 

On September 5, 2014, the Company, Fife, Typenex and Iliad Research and Trading, LLP (“Iliad”) entered into an Assignment and Assumption Agreement and Note Purchase Agreement (the “Note Purchase Agreement”) whereby Iliad acquired all of Fife’s and Typenex’s right, title, obligations and interest in, to and arising under the Company Notes (as defined in the Note Purchase Agreement) and the Note Purchase Documents (as defined in the Note Purchase Agreement).


13


 

BERGIO INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

On October 17, 2014, the Company entered into a financing arrangement with Iliad to provi0de additional financing in the amount of up to $450,000 through the issuance of a Secured Convertible Promissory Note (the “Note”). The Company agreed to cover Iliad’s legal, accounting and other related fees in the amount of $5,000, which is included in the principal balance of the Note. The Note will accrue interest at the rate of 8% per annum until the Note is paid in full. Monies are to be drawn in eight tranches with the initial tranche in the amount of $105,000, and the remaining balance of $350,000 in seven tranches of $50,000 each. The Company drew down the initial tranche on October 17, 2014. The Note has a maturity date of July 17, 2016. The Company continued to negotiate with the lender.

 

Beginning nine months after October 17, 2014 and on the same day each month thereafter, the Company shall make an installment payment, based upon the unpaid balance. At the option of the Company, payments may be made in cash or by converting the installment amount into shares of the Company’s common stock. The conversion price is equal to the lesser of (i) $0.0005 per share and (ii) 67.5% of the average of the three lowest closing bid prices in the 15 trading days immediately preceding the conversion. The Company has the right to prepay the Note at 135% of the outstanding balance at the time of prepayment.

 

In August 2020, the Company and Iliad entered into a Settlement Agreement. Under the terms of the Agreement, the Company and Iliad agreed to settle approximately $474,000 of convertible debt and accrued interest for a total of $300,000 in a note to be paid in monthly installments of $50,000 beginning September 1, 2020.

 

The outstanding balances at March 31, 2021 and December 31, 2020 were $50,000 and $150,000 respectively, with accrued interest of $-0- and $-0- at March 31, 2021 and December 31, 2020, respectively.

 

111 Recovery Corp. and Vis Vires Group, Inc.

 

On April 30, 2015, the Company entered into an 8% convertible note in the amount of $33,000 with Vis Vires. The principal and accrued interest is payable on or before November 6, 2015. At the option of the Company, but not before nine months from the date of issuance, the holder may elect to convert all or part of the convertible into the Company’s common stock. The note is convertible into shares of the Company’s common stock at a price equal to 60% of the average of the three lowest trading prices during the 10 days prior to the date of conversion or $0.00009, whichever is greater. During the year ended December 31, 2020 principal of $33,000 and accrued interest of $4,700 was converted into 9,015,614 shares of common stock. The outstanding balance at March 31, 2021 and December 31, 2020 was $-0- and $-0-, respectively, with accrued interest of $13,000 and $13,000 at March 31, 2021 and December 31, 2020, respectively.

 

PPP Loan

 

On March 27, 2020, President Trump signed the Coronavirus Aid, Relief and Economic Security (the “CARES Act”), which, among other things, outlines the provisions of the Paycheck Protection Program (the “PPP”). The Company determined that it met the criteria to be eligible to obtain a loan under the PPP because, among other reasons, in light of the COVID-19 outbreak and the uncertainty of economic conditions related thereto, the loan was considered necessary to support the Company’s ongoing operations and retain all its employees. In addition, President Trump signed into law the Paycheck Protection Program and Health Care Enhancement Act on April 24, 2020, which increased funding provided by the CARES Act. On April 17, 2020 the Company issued a promissory note (the “Note”) to Columbia Bank in the principal aggregate amount of $18,607.50 (the “PPP Loan”) pursuant to the Paycheck Protection Program (“PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). On September 5, 2020 the Paycheck Protection Program Flexibility Act was signed into law and extended the program until December 31, 2020.

 


14


 

BERGIO INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Under the terms of the CARES Act, PPP loan recipients can apply for and be granted forgiveness for all or a portion of loan granted under the program. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for payment of payroll costs and any payments of mortgage interest, rent, and utilities. No assurance is provided that the Company will obtain forgiveness of the PPP Loan in whole or in part. The PPP Loan had a two-year term and bears interest at a rate of 0.98% per annum. Monthly principal and interest payments are deferred for nine months after the date of disbursement. The PPP Loan may be prepaid at any time prior to maturity with no prepayment penalties. Based on the September 5, 2020 the Paycheck Protection Program Flexibility Act, certain changes will need to be made to the original Note, based on the new law. As of December 31, 2020, the PPP Loan was forgiven by the SBA.

 

During the quarter ended March 31, 2021, the Company received another PPP Loan in the amount of $18,291 under similar terms as the first loan.

 

SBA Loan

 

On July 6, 2020, the Small Business Association (“SBA”) authorized a loan to Bergio International, Inc. in the amount of $114,900. Installment payments, including principal and interest, will begin twelve months from the date of the note in the amount of $560 each month for a term of thirty (30) years. Interest accrues on this note at the rate of 3.75%. This note is collateralized by the assets of the Company. The outstanding balances at March 31, 2021 and December 31, 2020 were $114,900 with accrued interest of $3,164 and $2,101 March 31, 2021 and December 31, 2020, respectively.

 

Coyne Enterprises, Inc.

 

On May 23, 2019, the Company entered into a loan agreement with Coyne Enterprises, Inc. in the amount of $30,000. The term of the loan was for the period September 1, 2019 through November 30, 2019. The Company continues to negotiate the extension of this loan. Interest accrues at the rate of 6% per annum and is to be paid quarterly. Prepayment or partial payment can be made with no penalty. During the three months ended three months ended March 31, 2020, the Company repaid the remaining outstanding balance of $15,000. The outstanding balances at March 31, 2021 and December 31, 2020 were $-0- and $15,000, respectively, with accrued interest of $-0- and $155 at March 31, 2021 and December 31, 2020, respectively.

 

RB Capital Partners, Inc.

 

On October 15, 2019, the Company entered into a 10% convertible note in the amount of $25,000 with RB Capital Partners, Inc. The note is payable on demand but has a period of twelve months. The principal and accrued interest is payable on or before October 15, 2020. At the option of the Holder, but not before nine months from the date of issuance, the holder may elect to convert all or part of the convertible into the Company’s common stock. The note is convertible into shares of the Company’s common stock at a fixed price of $0,001. During the year ended December 31, 2020, principal of $3,800 was converted into 3,800,000 shares of common stock.

 

On July 1, 2020, the Company entered into a 10% convertible note in the amount of $25,000 with RB Capital Partners, Inc. The note is payable on demand but has a period of twelve months. The principal and accrued interest is payable on or before October 15, 2020. At the option of the Holder, but not before nine months from the date of issuance, the holder may elect to convert all or part of the convertible into the Company’s common stock. The note is convertible into shares of the Company’s common stock at a fixed price of $0.50. There were no conversions during the year ended December 31, 2020.

 

On August 10, 2020, the Company entered into a 10% convertible note in the amount of $25,000 with RB Capital Partners, Inc. The note is payable on demand but has a period of twelve months. The principal and accrued interest is payable on or before October 15, 2020. At the option of the Holder, but not before nine months from the date of issuance, the holder may elect to convert all or part of the convertible into the Company’s common stock. The note is convertible into shares of the Company’s common stock at a fixed price of $0.50. There were no conversions during the year ended December 31, 2020.


15


 

BERGIO INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

On November 11, 2020, RB Partners and the Company entered into an agreement whereas the Company agreed to allow RB Partners to convert $6,000 at $0.001 and issue 6,000,000 shares and pay the balance of the note in the amount of $18,000. RB Partners agreed to release the Company of any remaining obligations on the remaining two notes of $25,000 each.

 

The outstanding balances due to RB Partners at March 31, 2021 and December 31, 2020 were $12,000 and $18,000, respectively, with accrued interest of $-0- and $-0- at March 31, 2021 and December 31, 2020, respectively. The Company also has committed to allow RB Partners to convert $6,000 at $0.001 and issue 3,000,000 at a later date.

 

Crown Bridge Partners Inc.

 

On October 29, 2019, the Company entered into a 10% convertible promissory note in the amount of $100,000 with Crown Bridge Partners, LLC. This Note carries a prorated original issue discount of up to $8,000.00 to cover the Holder’s accounting fees, due diligence fees, monitoring, and/or other transactional costs incurred in connection with the purchase and sale of the note, which is included in the principal balance of this note. The holder paid $23,000 for the first tranche ($25,000 less $2,000 discount). The maturity date for each tranche funded shall be twelve (12) months from the effective date of each payment as well as any accrued and unpaid interest and other fees. Interest accrues at the rate of 10% per annum and shall be computed on the basis of a 365-day year and the actual number of days elapsed. Any amount of principal or interest on this note which is not paid when due shall bear interest at the rate the of lesser of (i) 15% per annum and (ii) the maximum amount permitted under law from the due date thereof until the same is paid (the “Default Interest”). The Holder shall have the right from time to time to convert all or any part of the outstanding and unpaid principal, interest, penalties, and all other amounts under this note into fully paid and non-assessable shares of common stock.

 

The conversion price shall mean 60% multiplied by the lowest trading price (representing a discount rate of 40%) during the previous twenty-five (25) trading day period ending on the latest complete trading day prior to the date of this note. The conversion price shall be subject to a floor price of $0.000035.

 

During the year ended December 31, 2020, this debt was totally converted into common stock. The outstanding balances at March 31, 2021 and December 31, 2020 were $-0- and $-0-, respectively, with accrued interest of $2,742 and $2,742 at March 31, 2021 and December 31, 2020, respectively.

 

Trillium Partners LP

 

On June 16, 2020, the Company entered into a loan agreement with Trillium Partner LP in the amount of $12,500. The loan and accrued interest in due on December 31, 2020. Interest accrues at the rate of 10% per annum. The outstanding balances at March 31, 2021 and December 31, 2020 were $12,500 with accrued interest of $623 and $363 at March 31, 2021 and December 31, 2020. The Company is negotiating an extension to the loan.

 

On September 14, 2020, the Company entered into a loan agreement with Trillium Partner LP in the amount of $12,250. The loan and accrued interest in due on March 14, 2021. Interest accrues at the rate of 10% per annum. The outstanding balances at March 31, 2021 and December 31, 2020 were $12,250 and $12,250, respectively, with accrued interest of $-0- and $-0- at March 31, 2021 and December 31, 2020. The Company is negotiating an extension to the loan.

 

On September 18, 2020, the Company entered into a loan agreement with Trillium Partner LP in the amount of $15,000. The loan and accrued interest in due on March 18, 2021. Interest accrues at the rate of 10% per annum. The outstanding balances at March 31, 2021 and December 31, 2020 were $15,000 and $15,000, respectively, with accrued interest of $419 and $378 at March 31, 2021 and December 31, 2020. The Company is negotiating an extension to the loan.

 

Clearbanc

 

Aphrodite’s Marketing has a loan with Clearbanc associated with revenues. As of March 31, 2021, the outstanding balance is $179,727.


16


 

BERGIO INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Shopify

 

Aphrodite’s Marketing has a loan with Shopify associated with revenues. As of March 31, 2021, the outstanding balance is $284,489.

 

Business Capital

 

Aphrodite’s Marketing has a loan with Business Capital. As of March 31, 2021, the outstanding balance is $338,867.

 

Jonathan Fultz

 

Aphrodite’s Marketing has a loan with Jonathan Fultz. As of March 31, 2021, the outstanding balance is $75,500.

 

Nationwide

 

Aphrodite’s Marketing has a loan with Nationwide. As of March 31, 2021, the outstanding balance is $583,261.

 

Digital Age Business

 

Aphrodite’s Marketing has a loan with Digital Age Business. As of March 31, 2021, the outstanding balance is $96,396.

 

Note 9 - Advances from Principal Executive Officer and Accrued Interest

 

The Company receives periodic advances from its principal executive officer based upon the Company’s cash flow needs. At March 31, 2021 and December 31, 2020, $202,949 and $211,141, respectively, was due to such officer, including accrued interest and interest expense is accrued at an average annual market rate of interest which was 3.25% and 3.25% at March 31, 2021 and December 31, 2020, respectively. Interest expense due to such officer was $4,368 and $3,571 for the three months ended March 31, 2021 and 2020, respectively. Accrued interest was $25,121 and $216,527 at March 31, 2021 and December 31, 2020. No terms for repayment have been established.

 

Effective February 28, 2010, the Company entered into an employment agreement with its PEO. The agreement, which is for a five year term, provides for an initial base salary of $175,000 per year with a 3% annual increase thereafter (the “Base Salary”). The PEO is also entitled to certain bonuses based on net profits before taxes and other customary benefits, as defined in the agreement. In addition, since it is understood that the Company is employing the PEO during a time of economic decline throughout the U.S. and at times and from time to time, the Company may not be in a position to pay the full amount of Base Salary owed the PEO it is understood and agreed to by the Board, that as long as the Company is unable to pay the CEO the full amount of his Base Salary that the Board shall issue to him, from time to time, an amount of shares that will allow him to remain in possession of fifty-one percent (51%) of the Company’s then outstanding shares of common stock.  Such issuances shall be made to the PEO at any time when his total share holdings are reduced to an amount less than fifty-one percent (51%) as a result of issuance of shares of common stock made on behalf of the Company.

 

Effective September 1, 2011, the Company and PEO entered into an Amended and Restated Employment Agreement (the “Amended Agreement”) which primarily retains the term and compensation of the original agreement. The Amended Agreement, however, removes the section which previously provided for the issuance of Company common stock to the CEO, from time to time, when the Company is unable to pay the CEO the full amount of his Base Salary (as defined in the Amended Agreement) which would allow the CEO to maintain a fifty-one percent (51%) share of the Company’s outstanding common stock. However, the CEO does have the right to request all or a portion of his unpaid Base Salary be paid with the Company’s restricted common stock. In addition, the Amended Agreement provides for the issuance of 51 shares of newly authorized Series A Preferred Stock to be issued to the CEO.


17


 

BERGIO INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

As defined in the Certificate of Designations, Preferences and Rights of the Series A Preferred Stock, each share of Series A Preferred Stock has voting rights such that the holder of 51 shares of Series A Preferred Stock will effectively maintain majority voting control of the Company. Effective November 3, 2011, the CEO notified the Company that for the one year period, retroactive from April 1, 2011, through December 31, 2012, he would reduce his Base Salary to $100,000.

 

The reduction in base compensation was subsequently extended to December 31, 2013. The CEO is currently deferring his salary to conserve cash. Deferred wages due to the CEO amounted to $483,071 and $445,571 for the periods ended March 31, 2021 and December 31, 2020. During the year ended December 31, 2019, the principal executive officer converted $500,000 of deferred compensation for common stock of the Company. This $500,000 was converted $500,000 of deferred compensation into 17,000,000 shares of common stock of the Company. The CEO in December 2020 returned these shares to the Company.  

 

As of March 31, 2021 and December 31, 2020, deferred compensation and advances of $500,000 and $500,000, totaling $500,000, was classified as a long-term liability as per agreement with the CEO to defer payment for twelve months.

 

Note 10 - Litigation

 

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

 

Note 11 - Operating Lease Liability

 

The Company leases retail space at two different locations. One lease has monthly payments from $1,350 to $1,665 which expires in May 2024. The second lease has a contingent rental based on 10% of sales. Contingent rentals are not included in operating lease liabilities. The Company’s leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease. The Company used incremental borrowing rates as of January 1, 2019 for operating leases that commenced prior to that date. The Company estimated its incremental borrowing rate based on its credit quality, line of credit agreement and by comparing interest rates available in the market for similar borrowings. The Company used a discount rate of 10% at March 31, 2021.

 

The following table reconciles the undiscounted future minimum lease payments (displayed by year in aggregate) under non-cancelable operating leases with terms more than one year to the total operating lease liabilities on the consolidated balance sheet as of March 31, 2021:

 

2021 remainder

 

$

13,755

2022

 

 

18,900

2022

 

 

19,700

2024

 

 

6,660

Total minimum lease payments

 

 

59,015

Less amounts representing interest

 

 

(8,262)

Present value of net minimum lease payments

 

 

50,753

Less current portion

 

 

(14,144)

Long-term capital lease obligation

 

$

36,609

(1)The above amount does not include contingent rentals which may be paid under lease agreement with Ocean Resort Casino. This rental is based upon 10% of gross sales at this location. 


18


 

BERGIO INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Note 12 - Pooling of Interests

 

On February 10, 2021, Bergio International, Inc. entered into an Acquisition Agreement with Digital Age Business, Inc., a Florida corporation, (“Digital Age”), pursuant to which the shareholders of Digital Age agreed to sell all of the assets and liabilities of its Aphrodite’s business to a recently formed wholly-owned subsidiary of the Company known as Aphrodite’s Marketing, Inc., a Wyoming corporation in exchange for newly created Series B Preferred Stock of the Company, which collectively, shall be convertible at Shareholders’ option, at any time, in whole or in part, into that number of shares of common stock of the Company which shall equal thirty percent (30%) of the total issued and outstanding common stock of the Company (as determined at the earlier of (i) the date of conversion of the Series B Preferred Stock; and (ii) eighteen (18) months following the Closing). In addition, the Company will provide an additional $5,000,000 in financing for Aphrodite’s Marketing, Inc. (See Form 8-K filed with the SEC on February 17, 2021.

 

As additional consideration for the purchase of the Acquired Assets, BRGO has also agreed to transfer to the Selling Shareholders 49,000 of the 100,000 authorized shares of the Acquisition Sub, such that upon the Closing Date, 51% of the Acquisition Sub shall be owned by BRGO, and 49% of the Acquisition Sub shall be owned by the Selling Shareholders.

 

Under the terms of the Acquisition Agreement, the Acquisition Sub is expected to meet the adjusted financial projections as set forth on Schedule “D” to the Acquisition Agreement, in order to earn additional Series B Preferred shares, which if earned, shall entitle the Selling Shareholders to earn up to an additional 19% (the “Additional Shares”) of Series B Preferred Stock, which, including the 30% of Series B Preferred Stock issued at Closing, shall together convert up to a maximum of 49% of BRGO’s then-issued and outstanding shares of Common Stock, with the Additional Shares being subject to a two-year vesting period from the date of issuance, based upon additional revenues of Acquisition Sub, as set forth on Schedule “E” to the Acquisition Agreement.

 

In addition, the Acquisition Agreement requires that upon Closing, Jonathan Foltz, the President and CEO of Digital Age, and certain other key employees of Acquisition Sub received employment agreements from Acquisition Sub with respect to their continued employment (the “Employment Agreements”) (which will allow such key employees to participate in any employee stock ownership plan (“ESOP”) as offered to other BRGO subsidiary employees from time to time) to make certain that current personnel operating the business of Aphrodites.com shall remain in place for all departments of the business of Aphrodite’s post-Closing of the Acquisition.

 

As further consideration for the Acquisition, under Section 2.2.1 of the Acquisition Agreement, BRGO agreed to provide Acquisition Sub with certain financing, as follows (a) upon the signing of the Letter of Intent that preceded this Acquisition Agreement, BRGO provided loans to Jonathan Foltz for the benefit of Aphrodites.com in the amounts of $50,000 on January 22, 2021, $35,000 on January 27, 2021, and $50,000 on February 5, 2021, which were used to pay some of the most pressing of Aphrodite’s Liabilities of as evidenced by the three promissory notes set forth on Schedule “H” therein (b) and upon the signing of this Acquisition Agreement, BRGO or its investors will provide equity financing of $615,000 for the benefit of Acquisition Sub, (for which BRGO shall enter into a certain Securities Purchase Agreement, Convertible Promissory Note, Warrant, Guaranty, Security Agreement and Registration Rights Agreement (together, the “BRGO Transaction Documents”), (the “Initial Financing”) which will be used to pay for (i) partial extinguishing the Assumed Liabilities set forth in Schedule “B” thereto, and (ii) expenses in connection with the Acquisition and the Audit of Acquisition Sub;  (c) and following the Closing of the Acquisition, BRGO will facilitate a second equity financing for the benefit of the Acquisition Sub in the amount of an additional $750,000, which shall take place following the effective date of BRGO’s new S-1 Registration Statement (the “Second Financing”), and such funds shall be utilized, in part, to pay for (i) extinguishing the Assumed Liabilities set forth in Schedule “B” thereto, and (ii) the expenses incurred in connection with the Acquisition and the Audit of Acquisition Sub and (d) following the Closing, BRGO will raise an additional $3,500,000, the proceeds of which will be used for the Acquisition Sub, by the sale of shares of common stock of BRGO, pursuant to an S-1 Registration Statement (the “Additional Financing”).

 


19


 

BERGIO INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

It is anticipated that the Additional Financing will be consummated in tranches over the twelve (12) months following the Closing; provided that the first tranche of the Additional Financing will be at least $750,000, and will be provided to the Acquisition Sub within 60 days after BRGO’s new S-1 Registration Statement is declared effective by the SEC. As noted on Schedule D and Schedule E to the Acquisition Agreement, the foregoing financing, (including the loans shown on Schedule H, the Initial Financing, the Second Financing and the Additional Financing) totals $5,000,000, and any financing provided to Acquisition Sub, which exceeds the $5,000,000 total detailed in this Section 2.2.1, shall be added to the Gross Revenue benchmarks set forth on Schedule D and Schedule E to the Acquisition Agreement.

 

Section 2.2.2 of the Acquisition Agreement further provides that, at the Closing of the Acquisition, Southridge (or its affiliates as directed by Southridge) shall receive shares of BRGO’s newly created Series C Preferred Stock which, collectively, shall be convertible into that number of shares of common stock of the Company which shall equal five percent (5%) of the total issued and outstanding shares of BRGO Common Stock (as determined at the earlier of: (i) the date of conversion of the Series C Preferred Stock; and (ii) eighteen (18) months following the Closing).  The proposed Certificate of Designation for the Series C Preferred share is set forth on Schedule “G” to the Acquisition Agreement.

 

On February 11, 2021, the Company, Digital Age, Acquisition Sub, and the Selling Shareholders entered into the First Amendment to the February 10, 2021 Acquisition Agreement (the “Amendment”) for the purpose of allocating the Series B Preferred Stock to the Selling Shareholders without fractional shares, which resulted in changing the Certificate of Designation for the Series B Preferred Stock to reflect a total of 4,900 authorized shares of Series B Preferred Stock, and for the purpose of reflecting a total of 3,000 shares of Series B Preferred Stock to be issued to the Selling Shareholders upon Closing, (and the opportunity for the Selling Shareholders to earn up to an additional 1,900 shares of Series B Preferred Stock upon reaching certain gross revenue benchmarks); and the new Certificate of Designation for the Series B Preferred Stock of BRGO was attached to the Amendment as “Schedule Amendment-C”, and shows in Section 1 thereof the increase in authorized shares from 49 to 4,900, and in Section 5 thereof, the conversion language changed accordingly so that the holders thereof shall have, in the aggregate, the same conversion rights as previously stated in the Acquisition Agreement.  Other than as expressly set forth in the Amendment, all other terms and conditions of the Acquisition Agreement were unchanged and remain in full force and effect.

 

On February 10, 2021. assets totaling $1,597,388 and liabilities of $3,737,682 were transferred to the Acquisition Sub known as Aphrodite’s Marketing, Inc. As a result, goodwill of $1,414,428 and intangible assets of $728,867 were recorded on the books of Aphrodite’s Marketing. Additionally, the Company recorded goodwill of $1,489,042, accrued dividends of $3,200, additional paid-in capital of $664,105 and a derivative liability of $821,738.

 

 

 

 

 

 

 

 

 

 

 

 

 


20


 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Forward Looking Statements

 

This quarterly report on Form 10-Q and other reports (collectively, the “Filings”) filed by Bergio International, Inc. (“Bergio” or the “Company”) from time to time with the U.S. Securities and Exchange Commission (the “SEC”) contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management.  Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the Filings, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements.  Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks contained in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on March 18, 2021, relating to the Company’s industry, the Company’s operations and results of operations, and any businesses that the Company may acquire.  Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

 

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements.  Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

 

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this report.

 

Plan of Operation

 

The Bergio brand is our most important asset. The Bergio brand is associated with high-quality, handcrafted and individually designed pieces with European sensibility, Italian craftsmanship and a bold flair for the unexpected.  Bergio, is one of the most coveted brands of fine jewelry. Established in 1995, Bergio’s signature innovative design, coupled with extraordinary diamonds and precious stones, earned the company recognition as a highly sought-after purveyor of rare and exquisite treasures from around the globe.

 

When designer and CEO, Berge Abajian, creates a collection, he looks well beyond the drawing board. Berge focuses on the woman who will ultimately wear his pieces, bringing to creation a magnificent piece of jewelry that reflects the beauty and vitality a woman possesses. Bergio creations are a seamless blend of classic elegance and subtle flair, adding to a woman’s charm while never overpowering her.

 

It is our intention to establish Bergio as a holding company for the purpose of establishing retails stores worldwide & acquisitions. Our branded product lines are products and/or collections designed by our designer and CEO Berge Abajian and will be the centerpiece of our retail stores. We also intend to complement our own quality-designed jewelry with other products and our own specially-designed handbags. This is in line with our strategy and belief that a brand name can create an association with innovation, design and quality which helps add value to the individual products as well as facilitate the introduction of new products.


21


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

 

Plan of Operation (continued)

 

It is our intention to open elegant stores in “high-end” areas and provide excellent service in our stores which will be staffed with knowledgeable professionals.

 

We also intend to sell our products on a wholesale basis to limited customers.

 

We have spent over $3 million in branding the Bergio name through tradeshows, trade advertising, national advertising and billboard advertising since launching the line in 1995. Our products consist of a wide range of unique styles and designs made from precious metals such as, gold, platinum, and Karat gold, as well as diamonds and other precious stones. We currently design and produce approximately 100 to 150 product styles. Current retail prices for our products range from $400 to $200,000. We have manufacturing control over our line as a result of having a manufacturing facility in New Jersey as well as subcontracts with facilities located in Italy.

 

On February 10,2021 we acquired 51% of Aphrodite’s an e-commerce company that sold $9,700,000.00 in 2020, this acquisition was essential to move the company into the e-commerce space also it will assist to launch Bergio fine online website to compete with all other jewelry e-commerce companies

 

In 2019 we introduced The Silver Fashion Collection ranging in price from $50 to $1,200. The Company also introduced the Bergio Handbag Collection, manufactured in Italy with top quality Italian leather ranging in price from $450 to $875, which are very competitive entry prices.

 

On March 5, 2014, the Company formed a wholly-owned subsidiary called Crown Luxe, Inc. in the State of Delaware (“Crown Luxe”). Crown Lux was established to operate the Company’s first retail store, which was opened in Bergen County, New Jersey in the fourth quarter of 2014. During the fall of 2018, we opened our second retail store at the new Ocean Resort Casino in Atlantic City, New Jersey. We are also contemplating the opening of new stores in future.

 

The Company has instituted various cost saving measures to conserve cash and has worked with its debtors in an attempt to negotiate the debt terms. The Company has been also investigating various strategies to increase sales and expand its business.  On May 6,2021 we signed a binding letter of intent to acquire 51% of Gear Bubble, in four and half years Gear bubble processed over $ 130 Million in sales and generated $27 Million in revenue in 2020. Other negotiations are in progress they will be announced once they materialize. Once Gear Bubble is completed and with the acquisition of Aphrodite’s Bergio is moving into a different level of revenues in which it will secure and fund our future expansion. We are on our way to be self-funded and become profitable.

 

The Company’s operations have been affected by the recent and ongoing outbreak of the coronavirus disease 2019 (COVID-19) which in March 2020, was declared a pandemic by the World Health Organization. The ultimate disruption which may be caused by the outbreak is uncertain; however, it may result in a material adverse impact on the Company’s financial position, operations and cash flows. Possible areas that may be affected include, but are not limited to, disruption to the Company’s customers and revenue, including a significant disruption in consumer demand and accessories,  labor workforce, inability of customers to pay outstanding accounts receivable due and owing to the Company as they limit or shut down their businesses,  customers seeking relief or  extended payment plans relating to accounts receivable due and owing to the Company, unavailability of products and supplies used in operations, and the decline in value of assets held by the Company, including property and equipment. As such, the comparability of the Company’s operating results has been affected by significant adverse impacts related to the COVID-19 pandemic.

 

The Company has increased its online presence with the 2 acquisitions to minimize the impact of having to close its retail stores as well as directing efforts towards its wholesale operations.

 

It is our intention to open elegant stores in “high-end” areas and provide excellent service in our stores which will be staffed with knowledgeable professionals.


22


 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

 

Plan of Operation (continued)

 

We also intend to sell our products on a wholesale basis to limited customers.

 

We have spent over $3 million in branding the Bergio name through tradeshows, trade advertising, national advertising and billboard advertising since launching the line in 1995. Our products consist of a wide range of unique styles and designs made from precious metals such as, gold, platinum, and Karat gold, as well as diamonds and other precious stones. We currently design and produce approximately 100 to 150 product styles. Current retail prices for our products range from $400 to $200,000. We have manufacturing control over our line as a result of having a manufacturing facility in New Jersey as well as subcontracts with facilities located in Italy.

 

In 2019 we introduced The Silver Fashion Collection ranging in price from $50 to $1,200. The Company also introduced the Bergio Handbag Collection, manufactured in Italy with top quality Italian leather ranging in price from $450 to $875, which are very competitive entry prices.

 

On March 5, 2014, the Company formed a wholly-owned subsidiary called Crown Luxe, Inc. in the State of Delaware (“Crown Luxe”).  Crown Lux was established to operate the Company’s first retail store, which was opened in Bergen County, New Jersey in the fourth quarter of 2014. During the fall of 2018, we opened our second retail store at the new Ocean Resort Casino in Atlantic City, New Jersey. We are also contemplating the opening of new stores in future.

 

The Company has instituted various cost saving measures to conserve cash and has worked with its debtors in an attempt to negotiate the debt terms. The Company has been also investigating various strategies to increase sales and expand its business. The Company is in negotiations with some potential partners, but, at this time, there is nothing concrete, but the Company remains positive about its prospects. However, there is no assurance that the Company will be successful in its endeavors or that it will be able to increase its business. Our future operations are contingent upon increasing revenues and raising capital for on-going operations and expansion of our product lines. Because we have a limited operating history, you may have difficulty evaluating our business and future prospects.

 

The Company’s operations have been affected by the recent and ongoing outbreak of the coronavirus disease 2019 (COVID-19) which in March 2020, was declared a pandemic by the World Health Organization. The ultimate disruption which may be caused by the outbreak is uncertain; however, it may result in a material adverse impact on the Company’s financial position, operations and cash flows. Possible areas that may be affected include, but are not limited to, disruption to the Company’s customers and revenue, including a significant disruption in consumer demand and accessories,  labor workforce, inability of customers to pay outstanding accounts receivable due and owing to the Company as they limit or shut down their businesses,  customers seeking relief or  extended payment plans relating to accounts receivable due and owing to the Company, unavailability of products and supplies used in operations, and the decline in value of assets held by the Company, including property and equipment. As such, the comparability of the Company’s operating results has been affected by significant adverse impacts related to the COVID-19 pandemic.

 

The Company has increased its online presence to minimize the impact of having to close its retail stores as well as directing efforts towards its wholesale operations.

 

 

 

 

 

 


23


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

 

Results of Operations

 

Overview

 

Sales were robust for the quarter ended March 31, 2021 due to Aphrodite’s acquisition as compared to the same quarter last year despite the impact of the current pandemic. Our retail operations have been impacted by the pandemic. We continue to evaluate our initiatives. We are expanding our online presence and have been experiencing positive results, but it is too early to assess the real impact.  The Company continues to position itself for the future with the acquisition of Aphrodite’s and take advantage of the Bergio brand in the E-Commerce space as well as establishing a chain of retail stores worldwide. Our branded product lines are products and/or collections designed by our designer and CEO Berge Abajian and will be the centerpiece of our retail stores. We also intend to complement our own quality-designed jewelry with other products and our own specially designed handbags. This is in line with our strategy and belief that a brand name can create an association with innovation, design and quality which helps add value to the individual products as well as facilitate the introduction of new products. It is our intention to open elegant stores in “high-end” areas and provide excellent service in our stores which will be staffed with knowledgeable professionals. We continue to be excited about our store in Atlantic City, NJ. Our initial store in northern New Jersey has not done as well as we had hoped and the wholesale market has also not been favorable but with the addition of our online presence it has helped the company to reach a favorable balance. The Company has leveraged itself such that as sales increase a larger portion of dollars will flow to the bottom line.

 

The Company continues to pursue additional financing opportunities and we have initiated measures to strengthen our financial position. As a result, we have accomplished the following:

 

·We have negotiated some of our convertible debt.   

·Pursuant to a Settlement Agreement, Livingston Asset Management acquired $362,285 (the “Claim Amount”) of Company liabilities from certain creditors. In satisfaction of the Claim Amount, the Company agreed to issue shares of the Company’s common stock in one or more tranches to Livingston in the manner contemplated in the Settlement Agreement and Stipulation Agreement. The effect of this will be to convert debt to equity. 

·Filed a S-1 registration statement with the SEC. The Company has received limited proceeds from this offering. 

·Raised additional funding from loans. 

 

These events have allowed us to reduce our debt, provided limited funding for operations, and funding for the Aphrodite’s . We continue to pursue other opportunities. Moreover, there is no assurance that sufficient funding will be available, or if available, that its terms will be favorable to the Company. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Sales

 

 

Three Months Ended

 

 

 

March 31, 2021

March 31, 2020

Increase

(Decrease)

Percent Increase

(Decrease)

Sales, net

$ 1,149,314

$     75,393

$ 1,073,921

153%

 

 

 

 

 

Gross profit

$839,148

$   49,087

$ 790,061

171%

 

 

 

 

 

Gross profit as a % of sales

73%

65%

 

 

 

Net sales for the three months ended March 31, 2021 increased $1,073,921 (153%) to $1,149,314 as compared to $75,393. This robust increase is the result of the acquisition of Aphrodite’s which expanded the selling opportunities internationally and nationwide thru out the US. We were able to minimize the impact of the effect on our retail stores by our efforts on our wholesale and expanding our online presence, but it is too early to assess the real impact.


24


 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

 

Results of Operations (continued)

 

Gross Profit

 

Gross profit increased $790,061 (171%) to $839,148 for the three months ended March 31, 2021 as compared to $49,087 for the three months ended March 31, 2020.  This increase primarily is a result of turning the company vertical.

 

Selling, General & Administrative Expenses

 

Total selling, general and administrative expenses increased $976,127 (528%) to $1,204,230 for the three months ended March 31, 2021 as compared to $228,103 for the three months ended March 31, 2020. This increase is due to the acquisition cost and advertising and other costs associated with Aphrodite’s Marketing.

 

Income (Loss) from Operations

 

As a result of the above, we had a loss from operation of $365,082 for the three months ended March 31, 2021 as compared to a loss from operations of $179,016 from the same period last year.

 

Other Expense

 

For the three months ended March 31, 2021, the Company had other expense of $112,510 as compared to other expense of $1,291,885 for the three months ended March 31, 2020. This increase is primarily attributed to change in fair value of derivatives.

 

Net Income (Loss)

 

As a result of the above, we had net loss $477,592 for the three months ended March 31, 2021 as compared to net loss of $1,470,901 for the three months ended March 31, 2020.

 

Liquidity and Capital Resources

 

The following table summarizes working capital at March 31, 2021, compared to December 31, 2020:

 

 

 

March 31, 2021

 

December 31, 2020

 

Increase/

(Decrease)

 

 

 

 

 

 

 

Current Assets

 

$

3,610,224

 

$

1,321,632

 

$

2,288,592

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

$

5,579,698

 

$

1,106,318

 

$

(4,473,380)

 

 

 

 

 

 

 

 

 

 

Working Capital

 

$

(1,969,474)

 

$

215,314

 

$

(2,184,788)

 

At March 3, 2021 the Company had negative working capital of $1,969,474 as compared to positive working capital of $215,314 at December 31, 2020. This decrease in working capital is primarily attributed to the increase in liabilities s a result of the Aphrodite’s transaction. The Company believes it will work down this debt as a result of improved operations.

 

During the three months ended March 31, 2021, the Company’s principal sources and uses of funds were as follows:

 

Cash used in operating activities: For the three months ended March 31, 2021, the Company used $251,308 in cash for operations as compared to using $11,201 in cash for operations for the three months ended March 31, 2020. This increase in cash used in operations is primarily attributed to increase in loss from operations, increase in accounts receivable and inventories partially offset by the decrease in prepaid expenses and other current assets.


25


 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

 

Liquidity and Capital Resources (continued)

 

Cash (used in) provided by investing activities: For the three months ended March 31, 2021, the Company used $40,169 in cash for investing activities as compared to using $-0- of cash in investing activities for the three months ended March 31, 2020 as a as a result of purchases of capital assets.

 

Cash provided by(used in) financing activities: Net provided by financing activities for the three months ended March 31, 2021 was $1,122,516 as compared to using $11,580 for the three months ended March 31, 2020. This increase is primarily the result of increases in funds raised proceeds from the proceeds from loans payable, sale of common stock offset partially by an increase in repayments of loans payable, debt and convertible debt.

 

Our indebtedness is comprised of loans payable, convertible debt, and advances from a stockholder/officer intended to provide capital for the ongoing manufacturing of our jewelry line, in advance of receipt of the payment from our retail distributors.

 

Convertible Debt

 

From time to time the Company enters into certain financing agreements for convertible debt. For the most part, the Company settles these obligations with the Company’s common stock. As of March 31, 2021, total convertible debt was $1,015,568, net of debt discount of $718,181 at March 31, 2021

 

Satisfaction of Our Cash Obligations for the Next 12 Months

 

A critical component of our operating plan impacting our continued existence is to efficiently manage our retail operations and successfully develop new lines through our Company or through possible acquisitions and/or mergers as well as opening new retail stores. Our ability to obtain capital through additional equity and/or debt financing, and joint venture partnerships will also be important to our expansion plans. In the event we experience any significant problems assimilating acquired assets into our operations or cannot obtain the necessary capital to pursue our strategic plan, we may have to reduce the growth of our operations. This may materially impact our ability to increase revenue and continue our growth.

 

The Company has suffered recurring losses and has an accumulated deficit of $12,286,127 as of March 31, 2021. As of March 31, 2021, the Company had $1,015,568 in convertible debentures and $1,801,084 in loans payable. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The recoverability of a major portion of the recorded asset amounts shown in the accompanying consolidated balance sheet is dependent upon continued operations of the Company, which in turn, is dependent upon the Company’s ability to raise capital and/or generate positive cash flows from operations.

 

It is our intention to establish Bergio as a holding company for the purpose of establishing retails stores worldwide. Our branded product lines are products and/or collections designed by our designer and CEO Berge Abajian and will be the centerpiece of our retail stores. We also intend to complement our own quality-designed jewelry with other products and our own specially-designed handbags. This is in line with our strategy and belief that a brand name can create an association with innovation, design and quality which helps add value to the individual products as well as facilitate the introduction of new products. It is our intention to open elegant stores in “high-end” areas and provide excellent service in our stores which will be staffed with knowledgeable professionals. The Company has also increased its online presence to minimize the impact of having to close its retail stores as well as directing efforts towards its wholesale operations. The newly formed company, of which Bergio owns 51%, will greatly enhance our online presence and provide the opportunity for future growth.

 

These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.


26


 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

 

Liquidity and Capital Resources (continued)

 

Research and Development

 

We are not anticipating significant research and development expenditures in the near future.

 

Expected Purchase or Sale of Plant and Significant Equipment

 

We do not anticipate the purchase or sale of any plant or significant equipment; as such items are not required by us at this time.

 

Off-Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, results or operations, liquidity, capital expenditures or capital resources that is deemed material.

 

Critical Accounting Policies

 

Our critical accounting policies are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report. There have been no changes in our critical accounting policies. Our significant accounting policies are described in our notes to the 2020 consolidated financial statements included in our Annual Report.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

We do not hold any derivative instruments and do not engage in any hedging activities.

 

Item 4. Controls and Procedures

 

(a) Evaluation of Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in the reports we file pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”), to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide a reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.  Management designed the disclosure controls and procedures to provide reasonable assurance of achieving the desired control objectives.

 

We carried out an evaluation, under the supervision and with the participation of our management, including our PEO and PFO, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Based upon that evaluation, the PEO and PFO concluded that the Company’s disclosure controls and procedures were not effective.

 

(b) Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


27


 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

 

Item 1A. Risk Factors.

 

We believe there are no changes that constitute material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 18, 2021

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

During the three months ended March 31, 2021, we have issued the following securities which were not registered under the Securities Act. Unless otherwise indicated, all of the share issuances described below were made in reliance on the exemption from registration provided by Section 4(2) of the Securities Act for transactions not involving a public offering.

 

On January 21, 2021, we issued 4,700,000 shares of common stock valued at $14,100 to Power Up Lending for conversion of its convertible debt.

 

On January 15, 2021, we issued 4,700,000 shares of common stock valued at $14,100 to Power Up Lending for conversion of its convertible debt.

 

On January 21, 2021, we issued 4,966,667 shares of common stock valued at $14,900 to Power Up Lending for conversion of its convertible debt and accrued interest.

 

On January 20, 2021, we issued 4,700,000 shares of common stock valued at $14,100 to Power Up Lending for conversion of its convertible debt.

 

On January 18, 2021, we issued 3,845,256 shares of common stock valued at $10,382 to Trillium Partners for conversion of its convertible debt and accrued interest.

 

On February 16, 2021, we issued 7,342,297 shares of common stock valued at $20,265 to Auctus for conversion of its convertible debt and accrued interest.

 

On March 11, 2021, we issued 7,708,699 shares of common stock valued at $33,301 to Auctus for conversion of its convertible debt and accrued interest.

 

On March 23, 2021, we issued 8,093,400 shares of common stock valued at $43,704 to Auctus for conversion of its convertible debt and accrued interest.

 

Item 3. Defaults upon Senior Securities.

 

There has been no default in payment of principal, interest, sinking or purchase fund installment, or any other material default, with respect to any indebtedness of the Company.

 

Item 4. Mine Safety Disclosure.

 

Not applicable.

 

Item 5. Other Information.

 

Not applicable.


28


 

Item 6. Exhibits.

 

Exhibit No.

 

Description

 

 

 

31.1

 

Certification of Principal Executive Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 302 of 2002*

 

 

 

31.2

 

Certification of Principal Financial Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 302 of 2002*

 

 

 

32.1

 

Certification of Principal Executive Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

 

 

 

32.2

 

Certification of Principal Financial Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

 

 

 

101.INS

 

XBRL Instance Document *

 

 

 

101.SCH

 

XBRL Taxonomy Extension Schema *

 

 

 

101.CAL

 

XBRL Taxonomy Extension Calculation Linkbase *

 

 

 

101.DEF

 

XBRL Taxonomy Extension Definition Linkbase *

 

 

 

101.LAB

 

XBRL Taxonomy Extension Label Linkbase *

 

 

 

101.PRE

 

XBRL Taxonomy Extension Presentation Linkbase *

 

* Filed herewith

 

 

 

 

 

 

 

 

 

 

 

 

 


29


 

SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

 

 

BERGIO INTERNATIONAL, INC.

 

 

 

 

 

 

 

 

 

 

 

 

Date: May 27, 2021

 

By:

/s/ Berge Abajian

 

 

 

 

 

Name: Berge Abajian

 

 

 

 

 

Title: Chief Executive Officer

 

 

 

 

 

(Principal Executive Officer)

(Principal Financial Officer)

(Principal Accounting Officer)

 


30

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