10-Q 1 brgo-20230930.htm BERGIO INTERNATIONAL, INC. - FORM 10-Q SEC FILING BERGIO INTERNATIONAL, INC. - Form 10-Q SEC filing
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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: September 30, 2023

 

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


i


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 November 13, 2023 there were 568,443,365 shares outstanding of the registrant’s common stock.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


ii


 

TABLE OF CONTENTS

 

 

PART I - FINANCIAL INFORMATION

1

Item 1. Financial Statements

1

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

34

Item 3. Quantitative and Qualitative Disclosures about Market Risk

40

Item 4. Controls and Procedures

40

PART II - OTHER INFORMATION

41

Item 1. Legal Proceedings

41

Item 1A. Risk Factors

41

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

41

Item 3. Defaults upon Senior Securities

41

Item 4. Mine Safety Disclosure

41

Item 5. Other Information

41

Item 6. Exhibits

42

SIGNATURES

43

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


iii


PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

BERGIO INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

September 30,

2023

 

December 31,

2022

 

 

(Unaudited)

 

 

ASSETS:

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

Cash

 

$

47,183

 

$

464,248

Accounts receivable

 

 

131,475

 

 

119,931

Inventory

 

 

2,824,830

 

 

2,855,585

Prepaid expenses and other current assets

 

 

13,545

 

 

700

Total current assets

 

 

3,017,033

 

 

3,440,464

 

 

 

 

 

 

 

Property and equipment, net

 

 

26,579

 

 

50,164

Goodwill

 

 

5,681,167

 

 

5,681,167

Intangible assets, net

 

 

87,852

 

 

269,319

Operating lease right of use assets

 

 

95,815

 

 

24,595

Investment in unconsolidated affiliate

 

 

6,603

 

 

6,603

 

 

 

 

 

 

 

Total Assets

 

$

8,915,049

 

$

9,472,312

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY:

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

1,768,519

 

$

1,851,432

Bank overdraft

 

 

3,945

 

 

11,582

Accrued compensation - CEO

 

 

467,879

 

 

319,640

Notes payable - current portion, net of debt discount

 

 

701,862

 

 

702,504

Convertible notes payable, net of debt discount

 

 

202,159

 

 

19,324

Mandatorily redeemable Preferred Stock Series E - $1.00 stated value,

 2,500,000 shares designated and authorized, 317,000 issued and

 outstanding at September 30, 2023

 

 

317,000

 

 

-

Loans and advances payable including accrued interest

 

 

1,415,844

 

 

1,072,089

Advances from CEO and accrued interest

 

 

357,571

 

 

142,854

Derivative liability - convertible debt

 

 

639,154

 

 

108,594

Derivative liability - acquisition

 

 

21,426

 

 

7,914

Operating lease liabilities - current

 

 

28,020

 

 

18,072

Total current liabilities

 

 

5,923,379

 

 

4,254,005

 

 

 

 

 

 

 

Long-term liabilities:

 

 

 

 

 

 

Notes payable - long-term

 

 

260,138

 

 

259,496

Operating lease liabilities - long-term

 

 

67,795

 

 

6,524

Total long term liabilities

 

 

327,933

 

 

266,020

 

 

 

 

 

 

 

Total Liabilities

 

 

6,251,312

 

 

4,520,025

 

 

 

 

 

 

 

Commitments and contingencies

 

 

-

 

 

-

 

 

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


1


 

BERGIO INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

- CONTINUED -

 

 

September 30,

2023

 

December 31,

2022

 

 

(Unaudited)

 

 

Stockholders’ equity

 

 

 

 

 

 

Preferred stock 10,000,000 shares authorized

 Series A preferred stock - $0.001 par value, 75 shares

 authorized, 75 and 75 shares issued and outstanding

 at September 30, 2023 and December 31, 2022, respectively

 

 

-

 

 

-

Convertible Series B preferred stock - $0.00001 par value, 4,900 shares

 authorized, 3,000 and 3,000 shares issued and outstanding

 at September 30, 2023 and December 31, 2022, respectively

 ($100 per share liquidation value)

 

 

-

 

 

-

Convertible Series C preferred stock - $0.00001 par value, 5,000,000 shares

 authorized, no shares issued and outstanding

 at September 30, 2023 and December 31, 2022, respectively

 ($100 per share liquidation value)

 

 

-

 

 

-

Convertible Series D preferred stock - $0.00001 par value, 2,500,000 shares

 authorized, 957,000 and 1,274,000 shares issued and outstanding

 at September 30, 2023 and December 31, 2022, respectively

 ($1.00 per share liquidation value)

 

 

10

 

 

13

Common stock, $0.00001 par value; 25,000,000,000 shares authorized,

 153,160,405 and 12,316,954 shares issued and outstanding

 as of September 30, 2023 and December 31, 2022, respectively

 

 

1,531

 

 

123

Common stock issuable (12,300,000 and 1,000,000 shares as of September 30, 2023 and December 31, 2022, respectively)

 

 

123

 

 

10

Additional paid-in capital

 

 

25,858,268

 

 

26,102,888

Accumulated deficit

 

 

(21,188,783)

 

 

(19,605,358)

Total Bergio International, Inc. stockholders’ equity

 

 

4,671,149

 

 

6,497,676

 

 

 

 

 

 

 

Non-controlling interest in subsidiaries

 

 

(2,007,412)

 

 

(1,545,389)

 

 

 

 

 

 

 

Total Stockholders’ equity

 

 

2,663,737

 

 

4,952,287

 

 

 

 

 

 

 

Total Liabilities and Stockholders’ Equity

 

$

8,915,049

 

$

9,472,312

 

 

 

 

 

 

 

 

 

 

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


2


 

BERGIO INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

For the Three Months Ended

September 30,

 

For the Nine Months Ended

September 30,

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

 

Net revenues

 

$

869,472

 

$

1,318,851

 

$

3,667,257

 

$

5,733,883

Net revenues - related parties

 

 

-

 

 

-

 

 

-

 

 

139,716

Total net revenues

 

 

869,472

 

 

1,318,851

 

 

3,667,257

 

 

5,873,599

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

499,409

 

 

595,063

 

 

1,877,397

 

 

2,832,043

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

370,063

 

 

723,788

 

 

1,789,860

 

 

3,041,556

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Selling and marketing expenses

 

 

115,834

 

 

405,422

 

 

649,669

 

 

2,040,986

Professional and consulting expenses

 

 

331,476

 

 

495,737

 

 

1,301,289

 

 

1,607,351

Compensation and related expenses

 

 

168,757

 

 

385,006

 

 

501,467

 

 

1,042,280

General and administrative expenses

 

 

196,599

 

 

248,911

 

 

649,499

 

 

747,501

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

 

812,666

 

 

1,535,076

 

 

3,101,924

 

 

5,438,118

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(442,603)

 

 

(811,288)

 

 

(1,312,064)

 

 

(2,396,562)

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expenses)

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(59,662)

 

 

(61,070)

 

 

(390,891)

 

 

(1,130,022)

Derivative expense

 

 

(174,190)

 

 

(7,403)

 

 

(525,902)

 

 

(24,303)

Amortization of debt discount and deferred financing cost

 

 

(67,663)

 

 

(73,073)

 

 

(242,324)

 

 

(475,567)

Loss from foreign currency transactions

 

 

(316)

 

 

(3,530)

 

 

(3,098)

 

 

(9,018)

Fraud loss caused by computer hackers

 

 

-

 

 

(481)

 

 

-

 

 

(21,288)

Change in fair value of derivative liabilities

 

 

171,852

 

 

12,554

 

 

119,086

 

 

569,108

Interest income

 

 

2

 

 

66

 

 

2

 

 

427

Other income

 

 

2,127

 

 

1,160

 

 

2,127

 

 

19,065

Gain from forgiveness of accounts payable

 

 

-

 

 

-

 

 

231,806

 

 

-

Gain from extinguishment of debt, net

 

 

74,928

 

 

87,910

 

 

115,232

 

 

349,314

Total other expenses, net

 

 

(52,922)

 

 

(43,867)

 

 

(693,962)

 

 

(722,284)

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before provision for income taxes

 

 

(495,525)

 

 

(855,155)

 

 

(2,006,026)

 

 

(3,118,846)

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

-

 

 

-

 

 

-

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

(495,525)

 

 

(855,155)

 

 

(2,006,026)

 

 

(3,118,846)

 

 

 

 

 

 

 

 

 

 

 

 

 

Losses attributable to non-controlling interest

 

 

168,376

 

 

273,451

 

 

462,023

 

 

972,067

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to Bergio International, Inc.

 

$

(327,149)

 

$

(581,704)

 

$

(1,544,003)

 

$

(2,146,779)

 

 

 

 

 

 

 

 

 

 

 

 

 

Deemed dividend

 

 

(7,623)

 

 

-

 

 

(7,623)

 

 

(1,555,878)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss available to Bergio International, Inc. common stockholders

 

$

(334,772)

 

$

(581,704)

 

$

(1,551,626)

 

$

(3,702,657)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

(0.00)

 

 

(0.08)

 

 

(0.03)

 

 

(0.65)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

105,885,217

 

 

7,139,646

 

 

49,462,273

 

 

5,704,362

 

 

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


3


BERGIO INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

For the Nine Months Ended September 30, 2023 and 2022

(Unaudited)

 

 

Nine Months Ended September 30, 2023

 

 

Series A Preferred Stock

 

Series B Preferred Stock

 

Series D Preferred Stock

 

Common Stock

 

Common Stock Issuable

 

 

 

 

 

 

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Shares

 

Amount

 

Shares

 

Amount

 

Shares

 

Amount

 

Additional

Paid In

Capital

 

Accumulated

Deficit

 

Non-controlling

Interest

 

Total

Stockholders’

Equity (Deficit)

Balance, December 31, 2022

75

 

$

-

 

3,000

 

$

-

 

1,274,000

 

$

13

 

12,316,954

 

$

123

 

1,000,000

 

$

10

 

$

26,102,888

 

$

(19,605,358)

 

$

(1,545,389)

 

$

4,952,287

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Series D preferred stock exchange

for Series E preferred stock

-

 

 

-

 

-

 

 

-

 

(317,000)

 

 

(3)

 

-

 

 

-

 

-

 

 

-

 

 

3

 

 

-

 

 

-

 

 

-

Reclassification of Series E

preferred stock to mezzanine debt

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

 

(317,000)

 

 

-

 

 

-

 

 

(317,000)

Fractional shares due to 1:500

reverse stock split

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

2,568

 

 

-

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

Dividends on preferred stock

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

 

-

 

 

(10,903)

 

 

-

 

 

(10,903)

Net loss

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

 

-

 

 

(667,055)

 

 

(314,920)

 

 

(981,975)

Balance, March 31, 2023

75

 

 

-

 

3,000

 

 

-

 

957,000

 

 

10

 

12,319,522

 

 

123

 

1,000,000

 

 

10

 

 

25,785,891

 

 

(20,283,316)

 

 

(1,860,309)

 

 

3,642,409

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock

for debt conversion including

accrued interest and fees

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

11,751,753

 

 

118

 

-

 

 

-

 

 

21,740

 

 

-

 

 

-

 

 

21,858

Issuance of common stock for

accrued compensation - CEO

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

50,000,000

 

 

500

 

-

 

 

-

 

 

99,500

 

 

-

 

 

-

 

 

100,000

Dividends on preferred stock

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

 

-

 

 

(11,025)

 

 

-

 

 

(11,025)

Net loss

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

 

-

 

 

(549,799)

 

 

21,273

 

 

(528,526)

Balance, June 30, 2023

75

 

 

-

 

3,000

 

 

-

 

957,000

 

 

10

 

74,071,275

 

 

741

 

1,000,000

 

 

10

 

 

25,907,131

 

 

(20,844,140)

 

 

(1,839,036)

 

 

3,224,716

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock

for debt conversion including

accrued interest and fees

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

125,446,273

 

 

1,254

 

11,300,000

 

 

113

 

 

36,263

 

 

-

 

 

-

 

 

37,630

Return of common stock previously

issued for accrued compensation - CEO

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

(50,000,000)

 

 

(500)

 

-

 

 

-

 

 

(99,500)

 

 

-

 

 

-

 

 

(100,000)

Issuance of common stock for

conversion of Series D preferred

stock accrued dividends

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

3,642,857

 

 

36

 

-

 

 

-

 

 

8,862

 

 

(7,623)

 

 

-

 

 

1,275

Stock warrants granted in connection

with convertible notes

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

 

5,512

 

 

-

 

 

-

 

 

5,512

Dividends on preferred stock

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

 

-

 

 

(9,871)

 

 

-

 

 

(9,871)

Net loss

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

 

-

 

 

(327,149)

 

 

(168,376)

 

 

(495,525)

Balance, September 30, 2023

75

 

$

-

 

3,000

 

$

-

 

957,000

 

$

10

 

153,160,405

 

$

1,531

 

12,300,000

 

$

123

 

$

25,858,268

 

$

(21,188,783)

 

$

(2,007,412)

 

$

2,663,737

 

 

 

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


4


 

BERGIO INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

For the Nine Months Ended September 30, 2023 and 2022

(Unaudited)

 

 

Nine Months Ended September 30, 2022

 

 

Series A Preferred Stock

 

Series B Preferred Stock

 

Series C Preferred Stock

 

Series D Preferred Stock

 

Common Stock

 

Common Stock Issuable

 

 

 

 

 

 

 

 

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Shares

 

Amount

 

Shares

 

Amount

 

Shares

 

Amount

 

Shares

 

Amount

 

Additional

Paid In

Capital

 

Treasury

Stock

 

Accumulated

Deficit

 

Non-controlling

Interest

 

Total

Stockholders’

Equity (Deficit)

Balance, December 31, 2021

75

 

$

-

 

3,000

 

$

-

 

5

 

$

-

 

-

 

$

-

 

2,433,039

 

$

24

 

32,044

 

$

-

 

$

18,646,446

 

$

103,700

 

$

(14,452,396)

 

$

(557,472)

 

$

3,740,303

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Series D preferred stock issued

for cash, net of offering cost

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

855,000

 

 

9

 

-

 

 

-

 

-

 

 

-

 

 

814,991

 

 

-

 

 

-

 

 

-

 

 

815,000

Deemed dividend upon issuance

of Series D preferred stock

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

 

815,000

 

 

-

 

 

(815,000)

 

 

-

 

 

-

Issuance of common stock

for debt conversion including

accrued interest and fees

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

2,825,354

 

 

28

 

-

 

 

-

 

 

2,285,628

 

 

-

 

 

-

 

 

-

 

 

2,285,656

Accretion of stock-based

compensation for services

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

 

15,621

 

 

-

 

 

-

 

 

-

 

 

15,621

Dividends on preferred stock

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

 

-

 

 

-

 

 

(6,563)

 

 

-

 

 

(6,563)

Cancellation of treasury stock

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

 

103,700

 

 

(103,700)

 

 

-

 

 

-

 

 

-

Net loss

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

 

 

 

 

-

 

 

(1,585,586)

 

 

(492,725)

 

 

(2,078,311)

Balance, March 31, 2022

75

 

 

-

 

3,000

 

 

-

 

5

 

 

-

 

855,000

 

 

9

 

5,258,393

 

 

53

 

32,044

 

 

-

 

 

22,681,386

 

 

-

 

 

(16,859,545)

 

 

(1,050,197)

 

 

4,771,706

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Series D preferred stock issued

for cash, net of offering cost

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

825,000

 

 

8

 

-

 

 

-

 

-

 

 

-

 

 

739,992

 

 

-

 

 

-

 

 

-

 

 

740,000

Deemed dividend upon issuance

of Series D preferred stock

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

 

740,000

 

 

-

 

 

(740,000)

 

 

-

 

 

-

Issuance of common stock for

conversion of Series C preferred stock

-

 

 

-

 

-

 

 

-

 

(5)

 

 

-

 

-

 

 

-

 

271,793

 

 

3

 

-

 

 

-

 

 

(3)

 

 

-

 

 

-

 

 

-

 

 

-

Reclassification of derivative

liability to equity upon conversion

of Series C preferred stock

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

 

67,284

 

 

-

 

 

-

 

 

-

 

 

67,284

Issuance of common stock

for debt conversion including

accrued interest and fees

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

464,159

 

 

5

 

-

 

 

-

 

 

113,095

 

 

-

 

 

-

 

 

-

 

 

113,100

Issuance of common stock

for common stock issuable

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

32,044

 

 

-

 

(32,044)

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

Cashless exercise of stock warrants

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

109,000

 

 

1

 

-

 

 

-

 

 

877

 

 

-

 

 

(878)

 

 

-

 

 

-

Accretion of stock-based

compensation for services

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

 

15,621

 

 

-

 

 

-

 

 

-

 

 

15,621

Accrued dividends on preferred stock

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

 

-

 

 

-

 

 

(7,669)

 

 

-

 

 

(7,669)

Net loss

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

 

 

 

 

-

 

 

20,511

 

 

(205,891)

 

 

(185,380)

Balance, June 30, 2022

75

 

 

-

 

3,000

 

 

-

 

-

 

 

-

 

1,680,000

 

 

17

 

6,135,389

 

 

62

 

-

 

 

 

 

 

24,358,252

 

 

-

 

 

(17,587,581)

 

 

(1,256,088)

 

 

5,514,662

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reclassification of derivative

liability to equity upon conversion

of Series C preferred stock

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

832,000

 

 

8

 

-

 

 

-

 

 

83,192

 

 

-

 

 

-

 

 

-

 

 

83,200

Issuance of common stock for

conversion of Series D preferred

stock accrued dividends

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

(245,000)

 

 

(3)

 

1,002,440

 

 

10

 

-

 

 

-

 

 

5,603

 

 

-

 

 

-

 

 

-

 

 

5,610

Common stock issuable for

services to CEO

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

1,000,000

 

 

10

 

 

149,990

 

 

-

 

 

-

 

 

-

 

 

150,000

Common stock issuable for services

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

25,714

 

 

0

 

-

 

 

-

 

 

9,000

 

 

-

 

 

-

 

 

-

 

 

9,000

Accretion of stock-based

compensation for services

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

 

23,432

 

 

-

 

 

-

 

 

-

 

 

23,432

Accrued dividends on preferred stock

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

 

-

 

 

-

 

 

(13,706)

 

 

-

 

 

(13,706)

Net loss

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

 

-

 

 

-

 

 

(581,704)

 

 

(273,451)

 

 

(855,155)

Balance, September 30, 2022

75

 

$

-

 

3,000

 

$

-

 

-

 

$

-

 

1,435,000

 

$

14

 

7,955,543

 

$

80

 

1,000,000

 

$

10

 

$

24,629,469

 

$

-

 

$

(18,182,991)

 

$

(1,529,539)

 

$

4,917,043

 

 

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


5


BERGIO INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

For the Nine Months Ended

September 30,

 

2023

 

2022

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

Net loss attributable to Bergio International, Inc.

 

$

(1,544,003)

 

$

(2,146,779)

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

 

 

 

 

 

 

Non-controlling interest in subsidiaries

 

 

(462,023)

 

 

(972,067)

Amortization expense

 

 

181,467

 

 

181,467

Depreciation expense

 

 

28,485

 

 

30,448

Stock-based compensation

 

 

-

 

 

213,674

Amortization of debt discount and deferred financing costs

 

 

242,324

 

 

475,567

Derivative expense

 

 

525,902

 

 

24,303

Change in fair value of derivative liabilities

 

 

(119,086)

 

 

(569,108)

Gain from forgiveness of accounts payable

 

 

(231,806)

 

 

-

Gain from extinguishment of debt

 

 

(115,232)

 

 

(349,314)

Non-cash interest upon conversion of debt

 

 

-

 

 

1,025,660

Amortization of right of use assets

 

 

9,993

 

 

(72,373)

Change in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(11,544)

 

 

(26,998)

Inventory

 

 

30,755

 

 

226,252

Prepaid expenses and other current assets

 

 

(12,845)

 

 

(34,457)

Accounts payable and accrued liabilities

 

 

460,849

 

 

(227,296)

Bank overdraft

 

 

(7,637)

 

 

-

Accrued compensation - CEO

 

 

148,239

 

 

319,765

Operating lease obligations

 

 

(9,994)

 

 

72,372

Deferred compensation - CEO

 

 

-

 

 

(346,163)

NET CASH USED IN OPERATING ACTIVITIES

 

 

(886,156)

 

 

(2,175,047)

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Purchase of property and equipment

 

 

(4,900)

 

 

-

NET CASH USED IN INVESTING ACTIVITIES

 

 

(4,900)

 

 

-

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

Proceeds from sale of preferred stock, net of offering cost

 

 

-

 

 

1,555,000

Proceeds from note payable

 

 

65,000

 

 

110,000

Proceeds from loans and advances payable

 

 

560,616

 

 

1,003,140

Proceeds from convertible notes, net of debt issuance cost

 

 

75,000

 

 

126,250

Repayment on note payable

 

 

-

 

 

(218,634)

Repayment on loans and advances payable

 

 

(419,408)

 

 

(776,804)

Repayment on secured notes payable

 

 

-

 

 

(400,000)

Advance from (payments to) Chief Executive Officer, net

 

 

192,783

 

 

(129,858)

NET CASH PROVIDED BY FINANCING ACTIVITIES

 

 

473,991

 

 

1,269,094

 

 

 

 

 

 

 

NET CHANGE IN CASH AND CASH EQUIVALENTS:

 

 

(417,065)

 

 

(905,953)

CASH AND CASH EQUIVALENTS – beginning of period

 

 

464,248

 

 

1,093,195

CASH AND CASH EQUIVALENTS – end of period

 

$

47,183

 

$

187,242

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

Interest

 

$

-

 

$

14,610

Income taxes

 

$

-

 

$

-

 

 

 

 

 

 

 

Non-cash investing and financing activities:

 

 

 

 

 

 

Issuance of common stock issued for convertible debt, loans payable, and accrued interest

 

$

59,488

 

$

1,456,296

Issuance of common stock issued for accrued dividends

 

$

1,275

 

$

-

Debt discount in connection with the issuance of stock warrants

 

$

5,512

 

$

-

Deemed dividend upon issuance of Series D preferred stock

 

$

-

 

$

1,555,878

Deemed dividend upon conversion of Series D preferred stock and accrued dividends

 

$

7,623

 

$

 

Initial amount of ROU asset and related liability

 

$

81,213

 

$

-

Initial derivative liability recorded in connection with convertible notes payable

 

$

252,488

 

$

126,250

Reclassification of derivative liability to equity upon conversion of Series C preferred stock

 

$

-

 

$

67,284

 

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


6


BERGIO INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023 AND 2022

(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. The Company’s branded product lines are products and/or collections designed by the Company’s designer and CEO, Berge Abajian, and will be the centerpiece of the Company’s retail stores.

 

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

 

On July 1, 2021 (“Closing”), the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with GearBubble, Inc., a Nevada corporation, (“GearBubble”), pursuant to which the shareholders of GearBubble (the “Equity Recipients”) agreed to sell 100% of the issued and outstanding shares of GearBubble to a subsidiary of the Company known as GearBubble Tech, Inc. (“GearBubble Tech”), a Wyoming corporation in exchange for $3,162,000 (the “Cash Purchase Price”), which shall be paid as follows: a) $2,000,000 (which was paid in cash at Closing), b) $1,162,000 to be paid in 15 equal installments, and c) 49,000 of the 100,000 authorized shares of the Merger Sub, such that upon the Closing, 51% of the Merger Sub shall be owned by the Company, and 49% of the Merger Sub shall be owned by the GearBubble Shareholders. The Company owns 51% of GearBubble Tech.

 

On March 24, 2021, the Company filed, with the Wyoming Secretary of State, a Certificate of Amendment, to amend its Articles of Incorporation. The amendment reflected the increase in the authorized shares of common stock from 1,000,000,000 shares to 3,000,000,000 shares. On July 9, 2021, the Company filed, with the Wyoming Secretary of State, a Certificate of Amendment, to amend its Articles of Incorporation. The amendment reflected the increase in the authorized shares of common stock from 3,000,000,000 shares to 6,000,000,000 shares. On April 28, 2022, the Company filed, with the Wyoming Secretary of State, a Certificate of Amendment, to amend its Articles of Incorporation and reflected the increase in the authorized shares of common stock from 6,000,000,000 shares to 9,000,000,000 shares.

 

On September 26, 2022, the Company filed, with the Wyoming Secretary of State, a Certificate of Amendment, to amend its Articles of Incorporation and reflected the increase in the authorized shares of common stock from 9,000,000,000 shares to 15,000,000,000 shares. In March 2023, the Company filed, with the Wyoming Secretary of State, a Certificate of Amendment, to amend its Articles of Incorporation and reflected the increase in the authorized shares of common stock from 15,000,000,000 shares to 25,000,000,000 shares. In the same Articles of Amendment, the Company filed for a reverse split of the Company’s common stock, at the ratio of 1 for 500 (the “Reverse Stock Split”), which was declared effective by Financial Industry Regulatory Authority (“FINRA”) effective April 17, 2023. All share and per-share data and amounts have been retroactively adjusted as of the earliest period presented in the unaudited condensed consolidated financial statements to reflect the Reverse Stock Split.

 

 


7


BERGIO INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023 AND 2022

(UNAUDITED)


 

Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information, which includes consolidated interim financial statements and present the consolidated interim financial statements of the Company and its wholly-owned and majority-owned subsidiaries as of September 30, 2023. All intercompany transactions and balances have been eliminated. In the opinion of management, all adjustments necessary to present fairly our financial position, results of operations, and cash flows have been made. Those adjustments consist of normal and recurring adjustments. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2022, and footnotes thereto included in the Company’s Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 30, 2023 (the “Annual Report”). The results of operations for the nine months ended September 30, 2023, are not necessarily indicative of the results to be expected for the full year.

 

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.

 

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 increased its online presence through its majority-owned subsidiaries, Aphrodite’s Marketing and GearBubble Tech.

 

Non-controlling Interest in Consolidated Financial Statements

 

In December 2007, the Financial Accounting Standard Board (“FASB”) issued ASC 810-10-65, “Non-controlling Interests in consolidated financial statements, an amendment of Accounting Research Bulletin No. 51” (“SFAS No. 160”). This ASC clarifies that a non-controlling (minority) interest in a subsidiary is an ownership interest in the entity that should be reported as equity in the unaudited condensed consolidated financial statements. It also requires consolidated net income to include the amounts attributable to both the parent and non-controlling interest, with disclosure on the face of the consolidated income statement of the amounts attributed to the parent and to the non-controlling interest. In accordance with ASC 810-10- 45-21, those losses attributable to the parent and the non-controlling interest in subsidiaries may exceed their interests in the subsidiary’s equity. The excess and any further losses attributable to the parent and the non-controlling interest shall be attributed to those interests even if that attribution results in a deficit non-controlling interest balance.

 

On February 9, 2021, the Company entered into an Acquisition Agreement which resulted to the acquisition of 51% interest in Aphrodite’s Marketing. Additionally, on July 1, 2021, the Company entered into a Merger Agreement with GearBubble which resulted to the acquisition of 51% interest in the Merger Sub, GearBubble Tech. As of September 30, 2023 and December 31, 2022, the Company recorded a non-controlling interest balance of $(2,007,412) and $(1,545,389), respectively, in connection with the majority-owned subsidiaries, Aphrodite’s Marketing and GearBubble Tech as reflected in the accompanying unaudited condensed consolidated balance sheet and losses


8


BERGIO INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023 AND 2022

(UNAUDITED)


attributable to non-controlling interest of $462,023 and $972,067 during the nine months ended September 30, 2023 and 2022, respectively as reflected in the accompanying unaudited condensed consolidated statements of operations.

 

Note 2 - Going Concern

 

These unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying unaudited condensed consolidated financial statements, the Company had a net loss attributable to Bergio International, Inc. and cash used in operations of $1,544,003 and $886,156, respectively, for the nine months ended September 30, 2023. Additionally, the Company had an accumulated deficit of approximately $21.2 million and working capital deficit of approximately $2.9 million at September 30, 2023. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance date of this report. Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive or raise additional capital pursuant to debt or equity financings. The Company may seek to raise additional capital through additional debt and/or equity financings to fund its operations in the future; however, no assurance can be provided that the Company will be able to raise additional capital on favorable terms, or at all. If the Company is unable to raise additional capital or secure additional lending in the future to fund its business plan, the Company may need to curtail or cease its operations.

 

The Company increased its online presence and provided for the expansion of the Company’s branded product lines. The acquired majority owned subsidiaries, Aphrodite Marketing and GearBubble Tech of which the Company owns 51%, will enhance the Company’s online presence and provide the opportunity for future growth. However, there can be no assurance that this venture will be successful or that the Company can raise the required capital to fund this operation.

 

These unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

Note 3 - Summary of Significant Accounting Policies

 

Principles of Consolidation

 

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States which includes the Company, its wholly-owned and majority owned subsidiaries as of September 30, 2023. All significant inter-company accounts and transactions have been eliminated.

 

Use of Estimates

 

The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future events. Accordingly, the actual results could differ significantly from estimates. Significant estimates during the nine months ended September 30, 2023 and 2022 include the estimates of useful lives of property and equipment and intangible assets, valuation of the operating lease liability and related right-of-use asset, valuation of derivatives, allowance for uncollectable receivables, valuation of equity based instruments issued for other than cash, the fair value of warrants issued with debt, the valuation allowance on deferred tax assets, and stock-based compensation.


9


BERGIO INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023 AND 2022

(UNAUDITED)


 

Revenue Recognition

 

The Company applies ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). ASC 606 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. This standard requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures.  ASC 606 requires us to identify distinct performance obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. When distinct performance obligations exist, the Company allocates the contract transaction price to each distinct performance obligation. The standalone selling price, or our best estimate of standalone selling price, is used to allocate the transaction price to the separate performance obligations. The Company recognizes revenue when, or as, the performance obligation is satisfied.

 

Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Also, significant judgment may be required to determine the allocation of transaction price to each distinct performance obligation.

 

Generally, revenues are recognized at the time of shipment to the customer with the price being fixed and determinable and collectability assured, provided title and risk of loss is transferred to the customer. Provisions, when appropriate, are made where the right to return exists. Shipping and handling costs charged to customers are classified as sales, and the shipping and handling costs incurred are included in cost of sales.

 

The Company’s subsidiary, GearBubble Tech, recognizes revenue from three sources: (1) e-commerce revenue (2) platform subscription fees and (3) partner and services revenue.

 

Revenues are recognized when the merchandise is shipped to the customer and title is transferred and are recorded net of any returns, and discounts or allowances.  Shipping cost paid by customers are primarily for ecommerce sales and are included in revenue. Merchandise sales are fulfilled with inventory sourced through our suppliers. Therefore, the Company’s contracts have a single performance obligation (shipment of product). 

 

The Company evaluates the criteria outlined in ASC 606-10-55, Principal versus Agent Considerations, in determining whether it is appropriate to record the gross amount of merchandise sales and related costs or the net amount earned as commissions. The Company evaluates whether it is appropriate to recognize revenue on a gross or net basis based upon its evaluation of whether the Company obtains control of the specified goods by considering if it is primarily responsible for fulfillment of the promise, has inventory risk, and has the latitude in establishing pricing and selecting suppliers, among other factors. The ecommerce sellers have no further obligation to the customer after the promised goods are transferred to the customer.  Based on its evaluation of these factors, we have determined we are the principal in these arrangements. Through our suppliers, we have the ability to control the promised goods and as a result, the Company records ecommerce sales on a gross basis.

 

The Company refunds the full cost of the merchandise returned and all original shipping charges if the returned item is defective or we or our partners have made an error, such as shipping the wrong product. If the return is not a result of a product defect or a fulfillment error and the customer initiate a return of an unopened item within 30 days of delivery, for most products we refund the full cost of the merchandise minus the original shipping charge and actual return shipping fees. If our customer returns an item that has been opened or shows signs of wear, the Company issues a partial refund minus the original shipping charge and actual return shipping fees.

 


10


BERGIO INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023 AND 2022

(UNAUDITED)


The Company generally recognizes platform subscription fees in the month they are earned. Annual subscription payments received that are related to future periods are recorded as deferred revenue to be recognized as revenues over the contract term or period. 

 

Partner and services revenue is derived from: (1) partner marketing and promotion, and (2) non-recurring professional services. Revenue from partner marketing and promotion and non-recurring professional services is recognized as the service is performed. 

 

Cost of revenues

 

Cost of revenue consists primarily of the cost of the merchandise, shipping fees, credit card processing services, fulfillment cost, ecommerce sellers’ pay-out; costs associated with operation and maintenance of the Company’s platform.

 

Marketing

 

The Company applies ASC 720 “Other Expenses” to account for marketing costs. Pursuant to ASC 720-35-25-1, the Company expenses marketing costs as incurred. Marketing costs include advertising and related expenses for third party personnel engaged in marketing and selling activities, including sales commissions, and third-party e-commerce platform fees and selling fees. The Company directs its customers to the Company’s ecommerce platform through social media, digital marketing, and promotional campaigns. Marketing costs were $649,669 and $2,040,986 for the nine months ended September 30, 2023 and 2022, respectively, and marketing costs were $115,834 and $405,422 for the three months ended September 30, 2023 and 2022, respectively are included in selling and marketing expenses on the unaudited condensed consolidated statement of operations.

 

Shipping and Handling Costs

 

The Company accounts for shipping and handling fees in accordance with ASC 606. While amounts charged to customers for shipping products are included in revenues, the related costs of shipping products to customers are classified in selling and marketing expenses as incurred.

 

Fair Value of Financial Instruments

 

FASB ASC 820 - Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 requires disclosures about the fair value of all financial instruments, whether or not recognized, for financial statement purposes. Disclosures about the fair value of financial instruments are based on pertinent information available to the Company on September 30, 2023. Accordingly, the estimates presented in these financial statements are not necessarily indicative of the amounts that could be realized on disposition of the financial instruments. FASB ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

 

The three levels of the fair value hierarchy are as follows:

 

Level 1:Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. 

 


11


BERGIO INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023 AND 2022

(UNAUDITED)


Level 2:Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. 

 

Level 3:Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. 

 

The carrying amounts reported in the unaudited condensed consolidated balance sheets for cash, prepaid expenses and other current assets, accounts payable and accrued liabilities, and accrued compensation approximate their fair market value based on the short-term maturity of these instruments.

 

In August 2018, the FASB issued ASU 2018-13,” Changes to Disclosure Requirements for Fair Value Measurements”, which will improve the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements. The standard removes, modifies, and adds certain disclosure requirements, and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Upon adoption, this guidance did not have a material impact on its unaudited condensed consolidated financial statements.

 

Assets or liabilities measured at fair value or a recurring basis included embedded conversion options in convertible debt and convertible preferred stock and were as follows at:

 

 

 

September 30, 2023

 

December 31, 2022

Description

 

Level 1

 

 

Level 2

 

 

Level 3

 

Level 1

 

 

Level 2

 

 

Level 3

Total derivative liabilities

 

$

-

 

 

$

-

 

 

$

660,580

 

$

-

 

 

$

-

 

 

$

116,508

 

ASC 825-10 “Financial Instruments” allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding equity instruments.

 

Cash and Cash Equivalents

 

Cash equivalents are comprised of certain highly liquid instruments with a maturity of three months or less when purchased. The Company did not have any cash equivalents on hand at September 30, 2023 and December 31, 2022. The Company places its cash with high credit quality financial institutions. The Company’s accounts at these institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. To reduce its risk associated with the failure of such financial institutions, the Company evaluates, at least annually, the rating of the financial institutions in which it holds deposits. At September 30, 2023 and December 31, 2022, the Company did not have cash in excess of FDIC limits.

 

Accounts Receivable

 

The Company performs ongoing credit evaluations of its customers and adjusts credit limits based on customer payment and current credit worthiness, as determined by review of their current credit information. The Company continuously monitors credit limits for and payments from its customers and maintains provision for estimated credit losses based on its historical experience and any specific customer issues that have been identified. While such credit losses have historically been within the Company’s expectation and the provision established, the Company cannot guarantee that this will continue.

 


12


BERGIO INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023 AND 2022

(UNAUDITED)


An allowance for doubtful accounts is provided against accounts receivable for amounts management believes may be uncollectible. The Company determines the adequacy of this allowance by regularly reviewing the composition of its accounts receivable aging and evaluating individual customer receivables, considering the customer’s financial condition, credit history and current economic circumstance. While credit losses have historically been within the Company’s expectation and the provision established, the Company cannot guarantee that this will continue. As of September 30, 2023 and December 31, 2022, the allowance for doubtful accounts was $0 for both periods.

 

Inventory

 

Inventories consist primarily of finished goods and are stated at the lower of cost or market. Cost is determined using the weighted average method, and average cost is recomputed after each inventory purchase or sale. Inventories are written down if the estimated net realizable value is less than the recorded value, if appropriate.

 

Long-Lived Assets

 

The Company assesses the recoverability of the carrying value of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future, undiscounted cash flows expected to be generated by an asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. No impairment losses were recognized for the nine months ended September 30, 2023 and 2022.

 

Property and equipment

 

Property is carried at cost. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets, generally three to five years.

 

Stock-based compensation

 

Stock-based compensation is accounted for based on the requirements of ASC 718 - “Compensation-Stock Compensation”, which requires recognition in the financial statements of the cost of employee, non-employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.

 

Derivative Liabilities

 

The Company has certain financial instruments that are embedded derivatives associated with capital raises and acquisition. The Company evaluates all its financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 815-10 - Derivative and Hedging - Contract in Entity’s Own Equity. This accounting treatment requires that the carrying amount of any derivatives be recorded at fair value at issuance and marked-to-market at each balance sheet date. In the event that the fair value is recorded as a liability, as is the case with the Company, the change in the fair value during the period is recorded as either other income or expense. Upon conversion, exercise or repayment, the respective derivative liability is marked to fair value at the conversion, repayment, or exercise date and then the related fair value amount is reclassified to other income or expense as part of gain or loss on debt extinguishment.


13


BERGIO INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023 AND 2022

(UNAUDITED)


 

In July 2017, FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features. These amendments simplify the accounting for certain financial instruments with down-round features. The amendments require companies to disregard the down-round feature when assessing whether the instrument is indexed to its own stock, for purposes of determining liability or equity classification. For public business entities, the amendments in Part I of the ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018.

 

Concentration Risk

 

Concentration of Revenues

 

For the nine months ended September 30, 2023 and 2022, no customer accounted for over 10% of total revenues.

 

Concentration of Purchases

 

The Company purchased approximately 37% of its finished products from two vendors (10% and 27%) during the nine months ended September 30, 2023. The Company purchased approximately 35% of its finished products from two vendors (15% and 20%) during the nine months ended September 30, 2022.

 

Concentration of Accounts Receivable

 

As of September 30, 2023, accounts receivable amounted to $131,475 and two customers represented 59% (43% and 16%) of this balance. As of December 31, 2022, total accounts receivable amounted to $119,931 and two customers represented 90% (60% and 30%) of this balance.

 

Recent Accounting Pronouncements

 

Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

 

Note 4 - Property and Equipment

 

Property and equipment consist of the following:

 

 

September 30, 2023

 

December 31, 2022

 

 

 

 

 

Leasehold improvements

 

$

391,722

 

$

391,722

Office and computer equipment

 

 

581,352

 

 

581,352

Selling equipment

 

 

8,354

 

 

8,354

Furniture and fixtures

 

 

25,411

 

 

20,511

 

 

 

 

 

 

 

Total at cost

 

 

1,006,839

 

 

1,001,939

Less: Accumulated depreciation

 

 

(980,260)

 

 

(951,775)

 

 

 

 

 

 

 

  

 

$

26,579

 

$

50,164

 

Depreciation expense for the nine months ended September 30, 2023 and 2022 was $28,485 and $30,448, respectively. Depreciation expense for the three months ended September 30, 2023 and 2022 was $9,533 and $9,806, respectively.


14


BERGIO INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023 AND 2022

(UNAUDITED)


 

Note 5 - Net Loss per Share

 

Pursuant to ASC 260-10-45, basic loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the periods presented. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. Potentially dilutive common shares consist of common stock issuable for stock options and stock warrants (using the treasury stock method), convertible notes and common stock issuable. These common stock equivalents may be dilutive in the future.

 

The potentially dilutive common stock equivalents as of September 30, 2023 and December 31, 2022 were excluded from the dilutive loss per share calculation as they would be antidilutive due to the net loss as follow:

 

 

September 30, 2023

 

December 31, 2022

 

 

(Unaudited)

 

 

Common Stock Equivalents:

 

 

 

 

 

 

Stock Warrants

 

 

11,595,983

 

 

3,095,983

Convertible Preferred Stock

 

 

59,208,121

 

 

16,735,086

Convertible Notes

 

 

1,294,719,875

 

 

24,384,615

Total

 

 

1,365,523,979

 

 

44,215,684

 

Note 6 - Convertible Notes Payable

 

As of September 30, 2023 and December 31, 2022, convertible notes payable consisted of the following:

 

 

September 30, 2023

 

December 31, 2022

 

 

(Unaudited)

 

 

Principal amount

 

$

294,422

 

$

79,250

Less: unamortized debt discount

 

 

(92,263)

 

 

(59,926)

Convertible notes payable, net

 

$

202,159

 

$

19,324

 

Boot Capital, LLC

 

On October 3, 2022, the Company entered into an 8% convertible note in the amount of $79,250 less legal and financing costs of $4,250 for net proceeds of $75,000 with Boot Capital LLC. The principal and accrued interest is payable on or before October 3, 2023. 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. 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 65% multiplied by the average two lowest trading price (representing a discount rate of 35%) during the previous 15 trading day period ending on the latest complete trading day prior to the date of this note. During the first 90 to 180 days following the date of this note, the Company has the right to prepay the principal and accrued but unpaid interest due under this note together with any other amounts that the Company may owe the holder under the terms of the note, at a premium ranging from 120% to 125% as defined in the note agreement. After this initial 180-day period, the Company does not have a right to prepay such note. During the nine months ended September 30, 2023, principal of $28,330 were converted into 61,549,539 shares of common stock. The outstanding balance at September 30, 2023 and December 31, 2022 was $50,920 and $79,250, respectively. Accrued interest at September 30, 2023 and December 31, 2022 was $5,779 and $1,546, respectively.

 

Trillium Partners LP

 

On June 16, 2022, the Company received proceeds related to a loan with Trillium Partners LP in the amount of $100,000. The loan and accrued interest were due on demand. Interest accrued at the rate of 3% per annum. During


15


BERGIO INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023 AND 2022

(UNAUDITED)


the nine months ended September 30, 2023, the Company reclassed this from a loan to a convertible note payable upon the receipt of a secured promissory note. Accordingly, the Company entered into Secured Promissory Note (the “Secured Note”) in amount of $118,000 and original issue discount of $18,000 for net proceeds of $100,000. The Secured Note was due on February 4, 2023. Such Secured Note is secured by a security interest in the borrower’s existing and future assets, including all rights to received payments (including credit card payments) from the sale of goods or services, inventory, property and equipment, and general intangibles.

 

The Secured Note was issued in connection with the Advance Agreement dated October 27, 2021. On April 21, 2023, the Company, together with its majority owned subsidiaries, Aphrodite Marketing and GearBubble Tech (collectively the “Borrower”), entered into an Amendment Agreement (the “First Amendment”) with Trillium Partners L.P. to amend the Advance Agreement dated October 27, 2021 (the “Agreement”). Both parties agreed to amend the Agreement in section 10 of the Agreement including among others, a default interest rate of 22% per annum, conversion right to convert all or any part of the outstanding and unpaid amounts of the promissory notes, a provision that in no event shall the lender be entitled to convert into common stock that would result to beneficial ownership by lender and its affiliates of more than 4.99% of the outstanding shares of common stock (the “Beneficial Ownership Limitation”), and variable conversion price of 50% of the lowest trading price during the 30-trading day period prior to conversion date.

 

In the event that the Company fails to deliver the shares of common stock issuable upon conversion of principal or interest under of the promissory note within three business days of a notice of conversion, the Company shall incur a penalty of $2,000 per day; provided, however, that such fee shall not be due if the failure to deliver the shares is a result of a third party, such as the transfer agent.

 

On May 31, 2023, the Company, together with its majority owned subsidiaries, and Trillium Partners L.P. entered into a Second Amendment to the Advance Agreement whereby both parties agreed to amend under section 10(b) to increase the Beneficial Ownership Limitation from 4.99% into 9.99%.

 

Principal and interest shall be paid with 16 weekly payments of $7,375 shall be paid to the lender on each Friday starting in the month of July 2022; Upon the occurrence of an event of default, the 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. The Company did not pay the required payments and accordingly, has been accruing interest at 22%. During the nine months ended September 30, 2023, principal of $31,158 were converted into 75,648,487 shares of common stock. As of September 30, 2023, the principal balance is $86,842 and accrued interest amounted to $13,855 at September 30, 2023.

 

August 10, 2023 Securities Purchase Agreement

 

On August 10, 2023, the Company entered into a securities purchase agreement with Trillium Partners LP (“Trillium”), which closed on August 15, 2023, pursuant to which Trillium purchased a convertible promissory note (the “August 10, 2023 Trillium Note”) from the Company in the aggregate principal amount of $5,500, such principal and the interest thereon convertible into shares of the Company’s common stock at the option of Trillium any time after 180 days of the August 10, 2023 Trillium Note. The August 10, 2023 Trillium Note contains debt issue costs of $500. The Company intends to use the net proceeds for general working capital purposes. The maturity date is August 10, 2024.

 

In connection with such note, the Company issued 4,250,000 warrants to purchase common stock to such lender immediately exercisable at an initial exercise price of $0.0013 per share (subject to certain adjustments such as stock split, dividend, subsequent issuance of rights or options, subsequent convertible securities offering, consolidation or merger and pro-rata distribution) with an expiry date of August 10, 2030. The Company accounted for the 4,250,000 warrants issued with this note by using the relative fair value method. The total debt discount which is equivalent to the relative fair value of the warrants of $2,756 using a Black-Scholes model with the following assumptions: stock price at valuation date of $0.0013 based on the closing price of common stock at date of grant, exercise price of $0.0013, dividend yield of zero, expected term of 7.00, a risk-free rate of 4.17%, and expected volatility of 697%.

 


16


BERGIO INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023 AND 2022

(UNAUDITED)


 

J.P. Carey Limited Partners LP

 

August 10, 2023 Securities Purchase Agreement

 

On August 10, 2023, the Company entered into a securities purchase agreement with J.P. Carey Limited Partners LP (“JP Carey”), which closed on August 15, 2023, pursuant to which J.P. Carey purchased a convertible promissory note (the “August 10, 2023 JP Carey Note”) from the Company in the aggregate principal amount of $5,500, such principal and the interest thereon convertible into shares of the Company’s common stock at the option of JP Carey any time after 180 days of the August 10, 2023 JP Carey Note. The August 10, 2023 JP Carey Note contains debt issue costs of $500. The Company intends to use the net proceeds for general working capital purposes. The maturity date is August 10, 2024.

 

In connection with such note, the Company issued 4,250,000 warrants to purchase common stock to such lender immediately exercisable at an initial exercise price of $0.0013 per share (subject to certain adjustments such as stock split, dividend, subsequent issuance of rights or options, subsequent convertible securities offering, consolidation or merger and pro-rata distribution) with an expiry date of August 10, 2030. The Company accounted for the 4,250,000 warrants issued with this note by using the relative fair value method. The total debt discount which is equivalent to the relative fair value of the warrants of $2,756 using a Black-Scholes model with the following assumptions: stock price at valuation date of $0.0013 based on the closing price of common stock at date of grant, exercise price of $0.0013, dividend yield of zero, expected term of 7.00, a risk-free rate of 4.17%, and expected volatility of 697%.

 

The following terms shall apply to the above August 10, 2023 Trillium Note and August 10, 2023 JP Carey Note (the “August 10, 2023 Notes”):

 

The August 10, 2023 Notes bear interest at a rate of 12% per annum, which interest may be paid by the Company to the lenders in shares of the Company’s common stock; but shall not be payable until the August 10, 2023 Notes become payable, whether at the maturity date or upon acceleration or by prepayment.

 

During the first 180 days following the date of the August 10, 2023 Notes, the Company has the right to prepay the principal and accrued but unpaid interest due under the above notes, together with any other amounts that the Company may owe the holder under the terms of the note, at a premium of 150% as defined in the note agreement. After this initial 180-day period, after the expiration of the prepayment periods set forth above, the Company may submit an optional prepayment notice to the lenders.

 

The conversion price for the above notes shall be equal to a 50% discount of the market price which means the lowest 10 trading prices of the Common Stock immediately prior to the delivery of a Notice of Conversion. Notwithstanding the foregoing, the lenders shall be restricted from effecting a conversion if such conversion, along with other shares of the Company’s common stock beneficially owned by lenders and its affiliates, exceeds 9.99% of the outstanding shares of the Company’s common stock. Notwithstanding the foregoing, such conversion price and lookback periods are subject to adjustment in favor of the Investor in the event the Company issues securities to another party with more favorable conversion terms (“Most Favored Nation”). During the period where any monies are owed to the lender pursuant to the August 10, 2023 Notes, if the Company engages in any future financing transactions with a third party investor, the Company will provide the lender with written notice (the “MFN Notice”) thereof promptly but in no event less than 10 days prior to closing any financing transactions except for exempt issuance as defined in related the note agreements.

 

The above notes contain certain events of default, upon which principal and accrued interest will become immediately due and payable. In addition, upon an event of default, interest on the outstanding principal shall accrue at a default interest rate of 22% per annum, or if such rate is usurious or not permitted by current law, then at the highest rate of interest permitted by law. Further, certain events of default may trigger penalty and liquidated damage provisions.

 

Upon certain events of default, the above the August 10, 2023 Notes will become immediately due and payable and the Company must pay the lenders 200% of the then-outstanding principal amount of the above August 10, 2023 Notes, plus any interest accrued upon such event of default or prior events of default (the “Default Amount”). Further,


17


BERGIO INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023 AND 2022

(UNAUDITED)


upon any event of default relating to the failure to issue shares of common stock upon the conversion of such notes, such notes become immediately due and payable in an amount equal to twice the Default Amount.

 

The total principal amount outstanding under the above Trillium financing agreement was $5,500 and accrued interest of $92 as of September 30, 2023. The total principal amount outstanding under the above JP Carey financing agreement was $5,500 and accrued interest of $92 as of September 30, 2023.

 

1800 Diagonal Lending LLC

 

On April 24, 2023, the Company entered into an 8% convertible note in the amount of $70,481 less legal and financing costs of $5,481 for net proceeds of $65,000 with 1800 Diagonal Lending, LLC. The principal and accrued interest are payable on or before April 24, 2024. Any amount of principal or interest on this note which was 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. 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 was 65% multiplied by the average three lowest trading price (representing a discount rate of 35%) during the previous 15 trading day trading day period ending on the latest complete trading day prior to the date of this note. The outstanding principal and accrued interest balance at September 30, 2023 was $70,481 and $1,035, respectively.

 

During the first 90 to 180 days following the date of these notes, the Company had the right to prepay the principal and accrued but unpaid interest due under the above note together with any other amounts that the Company may owe the holder under the terms of the note, at a premium ranging from 115% to 120% as defined in the note agreement. After this initial 180-day period, the Company does not have a right to prepay such notes.

 

On April 24, 2023, the Company entered into a 13% promissory note in the amount of $75,180 less original issue discount of $8,055 and legal and financing costs of $2,125 for net proceeds of $65,000 with 1800 Diagonal Lending, LLC. The Company failed to make the first installment payment due in June 2023 which was considered an event of default and accordingly such promissory note became a convertible note. Consequently, during the nine months ended September 30, 2023, the Company reclassed the remaining principal balance of $75,180 and the related unamortized debt discount of $8,311 from notes payable to a convertible notes payable (see Note 9). The outstanding principal and accrued interest balance at September 30, 2023 was $75,180 and $5,273, respectively.

 

Amortization of debt discounts and financing cost

 

For the nine months ended September 30, 2023 and 2022, amortization of debt discounts and financing cost related to all the convertible notes above amounted to $240,455 and $396,365, respectively, and for the three months ended September 30, 2023 and 2022, amortization of debt discounts and financing cost related to all the convertible notes above amounted to $67,663 and $68,687, respectively, which has been amortized and included in amortization of debt discount and deferred financing cost on the accompanying unaudited condensed consolidated statements of operations.

 

Note 7 - Derivative Liability

 

The Company applies the provisions of ASC 815-40, Derivatives and Hedging - Contracts in an Entity’s Own Stock, under which convertible instruments that contain terms and provisions which cause the embedded conversion options to be accounted for as derivative liabilities. As a result, embedded conversion options in certain convertible notes and convertible preferred stock are recorded as a liability and are revalued at fair value at each reporting date. As of September 30, 2023 and December 31, 2022, total derivative liabilities amounted $660,580 (consist of derivative liability from convertible debt of $639,154 and derivative liability related to acquisition of Aphrodite’s Marketing $21,426) and $116,508 (consist of derivative liability from convertible debt of $108,594 and derivative liability related to acquisition of Aphrodite’s Marketing $7,914), respectively.

 


18


BERGIO INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023 AND 2022

(UNAUDITED)


 

The following is a roll forward for the nine months ended September 30, 2023 and for the year ended December 31, 2022 of the fair value liability of price adjustable derivative instruments:

 

 

 

Fair Value of

Liability for

Derivative

Instruments

 

 

 

 

Balance at December 31, 2021

 

$

978,232

Initial valuation of derivative liabilities included in debt discount

 

 

201,250

Initial valuation of derivative liabilities related to issuance of Series B and C Preferred Stock

 

 

37,706

Initial valuation of derivative liabilities included in derivative expense

 

 

(405,700)

Reclassification of derivative liabilities to gain from extinguishment of debt

 

 

(67,284)

Change in fair value of derivative liabilities

 

 

(627,696)

Balance at December 31, 2022

 

$

116,508

 

 

 

 

Initial valuation of derivative liabilities included in debt discount

 

 

252,488

Initial valuation of derivative liabilities included in derivative expense

 

 

525,902

Reclassification of derivative liabilities to gain from extinguishment of debt

 

 

(115,232)

Change in fair value of derivative liabilities

 

 

(119,086)

Balance at September 30, 2023

 

$

660,580

 

The Company calculates the estimated fair values of the liabilities for derivative instruments using the Black-Scholes pricing model. The closing price of the Company’s common stock at September 30, 2023 and December 31, 2022 was $0.0006 and $0.005, respectively. The volatility, expected remaining term, and risk-free interest rates used to estimate the fair value of derivative liabilities at September 30, 2023 are indicated in the table that follows.

 

The expected term is equal to the remaining term of the convertible instruments and the risk-free rate is based upon rates for treasury securities with the same term.

 

 

 

Initial Valuations

(on new derivative

instruments entered

into during the three

months ended

September 30, 2023)

 

September 30, 2023

Volatility

 

 

692% to 697%

 

 

697%

Expected Remaining Term (in years)

 

 

0.82 to 1.00

 

 

0.01 to 0.86

Risk Free Interest Rate

 

 

5.33 to 5.37%

 

 

5.46%

Expected dividend yield

 

 

None

 

 

None

 

Note 8 - Loans and Advances Payable

 

Loans and advances payable consisted of the following:

 

 

September 30, 2023

 

December 31, 2022

 

 

(Unaudited)

 

 

Principal amount of loans and advances

 

$

880,822

 

$

839,613

Accrued interest

 

 

535,022

 

 

232,476

Loans and advances payable

 

$

1,415,844

 

$

1,072,089

 


19


BERGIO INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023 AND 2022

(UNAUDITED)


 

Trillium Partners LP

 

On June 16, 2022, the Company received proceeds related to a loan with Trillium Partners LP in the amount of $100,000. The loan and accrued interest were due on demand. Interest accrued at the rate of 3% per annum. As of December 31, 2022, the principal balance was $100,000. Accrued interest amounted to $4,340 at December 31, 2022. During the nine months ended September 30, 2023, the Company reclassed such loan to convertible note payable upon the receipt of a secured promissory note and an amendment to an advance agreement (see Note 6).

 

Jonathan Foltz

 

The Company’s majority owned subsidiary, Aphrodite’s Marketing, has a loan with Jonathan Foltz, the President and CEO of Digital Age Business. On February 10, 2021, upon the acquisition of Aphrodite’s Marketing, the Company assumed an outstanding balance of $75,500 with Jonathan Foltz. During the year ended December 31, 2022, the Company received $90,150 and repaid back $25,239 related to this loan. Additionally, during the year ended December 31, 2022, Nationwide has assumed $65,513 of this loan. As of December 31, 2022, the outstanding balance is $81,534. During the nine months ended September 30, 2023, the Company has received $68,016 and repaid back $22,244 related to this loan. As of September 30, 2023 and December 31, 2022, the outstanding balance is $127,306 and $81,534, respectively.

 

Nationwide Transport Service, LLC (“Nationwide”)

 

Through the Company’s majority owned subsidiary, Aphrodite’s Marketing, has loan agreements with Nationwide dated in October 2020 and November 2020. Nationwide is owned by the father of Jonathan Foltz. On February 10, 2021, upon the acquisition of Aphrodite’s Marketing, the Company assumed an outstanding balance of $545,720 with Nationwide. Aphrodite’s Marketing did not make the required installment payments pursuant to the loan agreements from December 2020 to February 2021 and as such these loans are currently in default. Interest on defaulted amount ranges from 1% to 3% per month. During the year ended December 31, 2022, the Company repaid back $150,000 related to this loan. Additionally, during the year ended December 31, 2022, Nationwide assumed a total of $106,000 of loans related to Digital Age Business and Jonathan Foltz. As of December 31, 2022, the outstanding balance is $608,500 including accrued interest of $77,718. As of September 30, 2023, the outstanding balance is $667,562 including accrued interest of $136,781.

 

Amazon Capital Services, Inc.

 

In July 2022, the Company’s majority owned subsidiary, Aphrodite’s Marketing, entered into a loan agreement with Amazon Capital Services, Inc. (“Amazon”) for a loan amount of $64,000. The loan bears an annual interest rate of 12% and has a loan term of 6 months from date of the loan. During the year ended December 31, 2022, the Company repaid back $55,531 related to this loan. As of December 31, 2022, the outstanding balance is $11,001 including accrued interest of $2,532. During the nine months ended September 30, 2023, the Company has repaid back $11,085 related to this loan. As of September 30, 2023, the outstanding balance is $0.

 

Bluevine Capital, Inc.

 

In August 2022, the Company’s majority owned subsidiary, Aphrodite’s Marketing, entered into a line of credit agreement with Bluevine Capital, Inc. (“Bluevine”) for up to a loan amount of $200,000. The loan bears weekly interest rate of 0.54% and an upfront fee of 1.6% which were deducted from the loan amount. The loans are repaid in 26 weekly installments from the date of the loan.  During the year ended December 31, 2022, the Company has drawn a total loan of $200,000 and repaid back $112,412. As of December 31, 2022, the outstanding balance is $87,588. During the nine months ended September 30, 2023, the Company has drawn a total loan of $75,000 and repaid back $93,606. As of September 30, 2023, the outstanding balance is $85,631.

 

Square Advance

 

In September 2022, the Company’s majority owned subsidiary, Aphrodite’s Marketing, executed a merchant cash advance agreement (the “First Advance”) with Square Advance. Under the agreement, the Company sold an aggregate


20


BERGIO INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023 AND 2022

(UNAUDITED)


of $174,875 in future receivables for a purchase amount of $125,000. The aggregate principal amount is payable in weekly instalments totaling $7,286 until such time that the obligation is fully satisfied for approximately 6 months. During the year ended December 31, 2022, the Company received $118,750 (net of debt cost fee of $6,250 which was amortized immediately to interest expense) and repaid back $97,638 related to this loan advance. This loan is guaranteed by the CEO of the Company and Jonathan Foltz. During the year ended December 31, 2022, interest expense incurred related to this advance amounted to $31,171.

 

In January 2023, the Company’s majority owned subsidiary, Aphrodite’s Marketing, executed a merchant cash advance agreement with Square Advance. Under the agreement, the Company sold an aggregate of $245,000 in future receivables for a purchase amount of $175,000. The aggregate principal amount is payable in daily instalments totaling $1,884.62 until such time that the obligation is fully satisfied for approximately 130 days. The Company has received $168,000 (net of debt cost fee of $7,000 which was amortized immediately to interest expense) of which $59,749 was used to pay the remaining balance of the First Advance. This loan is guaranteed by the CEO of the Company and Jonathan Foltz.

 

During the nine months ended September 30, 2023, interest expense incurred related to these advances amounted to $95,703 and repaid back $29,000. As of September 30, 2023 and December 31, 2022, the outstanding balance is $157,274 and $58,533, respectively.

 

EAdvance Services

 

In November 2022, the Company’s majority owned subsidiary, Aphrodite’s Marketing, executed a purchase and sale of future receipt agreement with EAdvance Services. Under the agreement, the Company sold an aggregate of $213,900 in future receipt or receivables for a purchase amount of $155,000. The aggregate principal amount is payable in daily instalments of $1,782 until such time that the obligation is fully satisfied for approximately 4 months. During the year ended December 31, 2022, the Company received $150,350 (net of debt cost fee of $4,650 which was amortized immediately to interest expense) and repaid back $43,659 related to this loan. This loan is guaranteed by the CEO of the Company. During the year ended December 31, 2022, interest expense incurred related to this advance amounted to $13,592. As of December 31, 2022, the outstanding balance is $124,933.

 

During the nine months ended September 30, 2023, repaid back $100,998 related to this loan. During the nine months ended September 30, 2023, interest expense incurred related to this advance amounted to $45,308. As of September 30, 2023, the outstanding balance is $69,243.

 

Parkside Funding Group LLC

 

In February 2023, the Company’s majority owned subsidiary, Aphrodite’s Marketing, executed a purchase and sale of future receipt agreement with Parkside Funding Group LLC. Under the agreement, the Company sold an aggregate of $217,500 in future receipt or receivables for a purchase amount of $150,000. The aggregate principal amount is payable in daily instalments of $1,977 until such time that the obligation is fully satisfied for approximately 4 months. This loan is guaranteed by the CEO of the Company and Jonathan Foltz. During the nine months ended September 30, 2023, the Company received $142,500 (net of debt cost fee of $7,500 which was amortized immediately to interest expense) and repaid back $68,046 related to this loan. During the nine months ended September 30, 2023, interest expense incurred related to this loan amounted to $67,501. As of September 30, 2023, the outstanding balance is $149,455.

 

Marcus by Goldman Sachs

 

In February 2023, the Company’s majority owned subsidiary, Aphrodite’s Marketing, entered into a line of credit agreement with Marcus by Goldman Sachs (“Marcus”) for up to a loan amount of $125,000. The loan bears an annual interest rate of 9.99%. The amount due is 2% of the principal balance plus any fees and amounts that weren’t paid during the prior statement periods. During the repayment period, the amount due is the total outstanding balance at the end of the draw period divided into 26 equal payments that, if made in-full and on-time, bring the balance to zero over the next year. During the nine months ended September 30, 2023, the Company has drawn a total loan of $136,049


21


BERGIO INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023 AND 2022

(UNAUDITED)


and repaid back $16,517. During the nine months ended September 30, 2023, interest expense incurred related to this loan amounted to $5,380. As of September 30, 2023, the outstanding balance is $124,912.

 

Shopify

 

The Company’s majority owned subsidiary, Aphrodite’s Marketing, has a merchant loan agreement with Shopify, an e-commerce platform provider with a daily remittance rate of 17% for a loan amount of $36,160. During the nine months ended September 30, 2023, the Company has received $32,000 (net of debt cost of $4,160 which was amortized immediately to interest expense) and repaid back $1,698 related to this merchant loan agreement. The loan or advance is non-interest bearing, due on demand and are secured by all of the assets of Aphrodite’s Marketing. As of September 30, 2023, the outstanding balance is $34,462.

 

Note 9 - Notes Payable

 

Notes payable is summarized below:

 

 

September 30, 2023

 

December 31, 2022

 

 

(Unaudited)

 

 

Principal amount

 

$

962,000

 

$

962,000

Less: current portion

 

 

(701,862)

 

 

(702,504)