BERGIO INTERNATIONAL, INC. Forward Looking Statements
This report and other reports filed by our Company from time to time with the
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 us or our management identify forward-looking statements. Such statements reflect our current view with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including those set forth in the Risk Factors on page 5. 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 we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance, or achievements. Except, as required by applicable law,
including the securities laws of
Our financial statements are prepared in accordance with accounting principles
generally accepted in
General
Management's discussion and analysis of results of operations and financial condition is intended to assist the reader in the understanding and assessment of significant changes and trends related to the results of operations and financial position of the Company together with its subsidiary. This discussion and analysis should be read in conjunction with the consolidated financial statements and accompanying financial notes, and with the Critical Accounting Policies noted below.
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.
When designer and PEO,
It is our intention to establish
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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 also intend to sell our products on a wholesale basis to limited customers.
We have spent over
In 2019 we introduced The Silver Fashion Collection ranging in price from
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
On
During the fall of 2018, we opened our second retail store at the new
On
The funding for this acquisition will be a combination of proceeds from the issuance of common stock from our S-1 Registration Statement and debt.
Aphrodite is expected to increase our online presence and provide for expansion
of the Bergio Brand. Aphrodite is a one-stop shop for jewelry, gifts, and
surprises for any occasion. The online store provides for a unique gifting
experience in the ecommerce space. With their technological experience in
ecommerce, we expect to grow the Bergio Brand, and in conjunction with
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.
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The Company's retail operations have been and continue to be affected by the
recent and ongoing outbreak of the coronavirus disease (COVID-19) which in
Results of Operations - For the Year Ended
Overview
Sales were stable for the year ended
The Company continues to pursue additional financing opportunities and have initiate 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
·Filed a S-1 registration statement with the
·Raised additional funding from loans.
These events have allowed us to reduce our debt and provide limited funding for operations. 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.
We continue to believe that our plan to establish a chain of retail stores in strategic markets will be step in the right direction.
Sales
Net sales for year ended
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reduced consumer spending. We were able to minimize the impact of the effect on our retail stores by our efforts on our wholesale operations, expanding our online presence, but it is too early to assess the real impact.
Gross Profit
Gross profit for the year ended
Selling, General and Administrative Expenses
Total selling, general and administrative expenses increased
Loss from Operations
As a result of the above, the Company had a loss from operations in the amount
of
Other Expense
For the year ended
Net Loss
As a result of the above, the Company had a net loss of
Liquidity and Capital Resources
The following table summarizes total current assets, liabilities and working
capital at
Increase/
December 31, 2020 December 31, 2019 (Decrease)
Current Assets $ 1,321,632 $ 1,292,464 $ 29,168
Current Liabilities $ 1,106,318 $ 1,549,570 $ 443,242
Working Capital $ 215,314 $ (257,106) $ 472,4720 Our working capital was
During the year ended
Cash used in operating activities. For the year ended
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operations is mostly attributed to decrease in accounts payable and accrued liabilities offset partially by the increase in deferred compensation.
Cash used in investing activities. For the year ended
Cash provided financing activities. For the year ended
Our indebtedness is comprised of various 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
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
Loans Payable
The Company has loans payable of
Satisfaction of Our Cash Obligations for the Next 12 Months
A critical component of our operating plan impacting our continued existence is to increase sales and efficiently manage the production of our jewelry lines and successfully develop new lines through our Company or through possible acquisitions and/or mergers. 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 accompanying consolidated financial statements have been prepared in
conformity with accounting principles generally accepted in
The Company has suffered recurring losses, and at
In addition to obtaining new customers and increasing sales to existing
customers, management plans to achieve profitability by also establishing
On
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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
The funding for this acquisition will be a combination of proceeds from the issuance of common stock from our S-1 Registration Statement and debt.
Aphrodite is expected to increase our online presence and provide for expansion
of the Bergio Brand. Aphrodite is a one-stop shop for jewelry, gifts, and
surprises for any occasion. The online store provides for a unique gifting
experience in the ecommerce space. With their technological experience in
ecommerce, we expect to grow the Bergio Brand, and in conjunction with
In addition to obtaining new customers and increasing sales to existing
customers, management plans to achieve profitability by also establishing
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.
Critical Accounting Policies
The Company prepares its financial statements in accordance with GAAP. In preparing the financial statements and accounting for the underlying transactions and balances, the Company applies its accounting policies as disclosed in Note 2 of our Notes to Financial Statements. The Company's accounting policies that require a higher degree of judgment and complexity used in the preparation of financial statements include:
Revenue Recognition - the Company's management recognizes revenue when realized or realizable and earned. In connection with revenue, the Company established a sales return and allowance reserve for anticipated merchandise to be returned based on historical operations. The Company's sole revenue producing activity as a manufacturer and distributor of upscale jewelry is affected by movement in fashion trends and customer desire for new designs, varying economic conditions affecting consumer spending and changing product demand by retailers affecting their desired inventory levels. Realizing that this may, and in some periods has, resulted in a significant amount of sales returns, management revised the Company policy of accepting merchandise returns. Whereas under prior policy customers had up to 360 days to return merchandise and were allowed credits as offsets to their outstanding accounts receivable, under the current return policy merchandise, with limited exceptions, cannot be returned.
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 credits 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 our expectation and the
provision established, the Company cannot guarantee that it will continue to
receive positive results. Management has provided an allowance for doubtful
accounts of
Fair Value of Financial Instruments - The Company follows guidance issued by the
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principles that require the use of fair value measurements, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements.
The FASB 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. Additionally, the FASB requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.
These inputs are prioritized below:
·Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities.
·Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.
·Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity's own assumptions.
The Company discloses the estimated fair value for all financial instruments for
which it is practicable to estimate fair value. As of
Income taxes - deferred tax assets arise from a variety of sources, the most significant being: a) tax losses that can be carried forward to be utilized against profits in future years; b) expenses recognized in the books but disallowed in the tax return until the associated cash flow occurs; and c) valuation changes of assets which need to be tax effected for book purposes but are deductible only when the valuation change is realized.
Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when such differences are expected to reverse. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance for any tax benefit which is not more likely than not to be realized. In assessing the need for a valuation allowance, future taxable income is estimated, considering the realization of tax loss carryforwards. Valuation allowances related to deferred tax assets can also be affected by changes to tax laws, changes to statutory tax rates and future taxable income levels. In the event it was determined that the Company would not be able to realize all or a portion of its deferred tax assets in the future, the Company would reduce such amounts through a charge to income in the period in which that determination is made. Conversely, if it were determined that it would be able to realize the deferred tax assets in the future in excess of the net carrying amounts, the Company would decrease the recorded valuation
allowance through an increase to income in the period in which that determination is made. In its evaluation of a valuation allowance, the Company takes into account existing contracts and backlog, and the probability that options under these contract awards will be exercised as well as sales of existing products. The Company prepares profit projections based on the revenue and expenses forecast to determine that such revenues will produce sufficient taxable income to realize the deferred tax assets.
Off Balance Sheet Arrangements
The Company is not party to any off-balance sheet arrangements that may affect its financial position or its results of operations.
Recently Adopted Authoritative Pronouncements
In
No other recently issued accounting pronouncements had or are expected to have a material impact on the Company's consolidated financial statements.
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No other recently issued accounting pronouncements had or are expected to have a material impact on the Company's condensed consolidated financial statements.
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