0001393905-16-001020.txt : 20160815 0001393905-16-001020.hdr.sgml : 20160815 20160815162330 ACCESSION NUMBER: 0001393905-16-001020 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 41 CONFORMED PERIOD OF REPORT: 20160630 FILED AS OF DATE: 20160815 DATE AS OF CHANGE: 20160815 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Bergio International, Inc. CENTRAL INDEX KEY: 0001431074 STANDARD INDUSTRIAL CLASSIFICATION: JEWELRY, SILVERWARE & PLATED WARE [3910] IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-54714 FILM NUMBER: 161833068 BUSINESS ADDRESS: STREET 1: 12 DANIEL ROAD CITY: EAST FAIRFIELD STATE: NJ ZIP: 07004 BUSINESS PHONE: (973) 227-3230 MAIL ADDRESS: STREET 1: 12 DANIEL ROAD CITY: EAST FAIRFIELD STATE: NJ ZIP: 07004 FORMER COMPANY: FORMER CONFORMED NAME: Alba Mineral Exploration DATE OF NAME CHANGE: 20080328 10-Q 1 brgo_10q.htm QUARTERLY REPORT 10Q


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q


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


For the quarterly period ended: June 30, 2016


[  ]  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)


Delaware

 

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)


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 [X]  No [  ]


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, 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 [X]  No [  ]


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


Large accelerated filer

[  ]

 

Accelerated filer

[  ]

 

 

 

 

 

Non-accelerated filer

[  ]

 

Smaller reporting company

[X]


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes [  ]  No [X]


As of August 12, 2016, there were 238,169,848 shares outstanding of the registrant’s common stock.






TABLE OF CONTENTS



PART I - FINANCIAL INFORMATION

3

Item 1. Financial Statements

3

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

15

Item 3. Quantitative and Qualitative Disclosures about Market Risk

21

Item 4. Controls and Procedures

21

PART II - OTHER INFORMATION

23

Item 1. Legal Proceedings.

23

Item 1A. Risk Factors.

23

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

23

Item 3. Defaults upon Senior Securities.

23

Item 4. Mine Safety Disclosure.

23

Item 5. Other Information.

24

Item 6. Exhibits.

24

SIGNATURES

25
































2



PART I - FINANCIAL INFORMATION


Item 1. Financial Statements


BERGIO INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)


 

 

June 30, 2016

 

December 31, 2015

ASSETS:

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash

 

$

3,998

 

$

2,893

 

 

Accounts receivable, net of allowance for doubtful

  accounts of $98,819 at June 30, 2016 and

  December 31, 2015

 

 

489,692

 

 

51,100

 

 

Inventories

 

 

1,204,912

 

 

1,416,401

 

 

Deferred financing costs

 

 

-

 

 

375

 

 

Total current assets

 

 

1,698,602

 

 

1,470,769

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

676,544

 

 

748,087

 

 

 

 

 

 

 

 

Other assets:

 

 

 

 

 

 

 

 

Investment in unconsolidated affiliate

 

 

5,828

 

 

5,828

 

 

Total other assets

 

 

5,828

 

 

5,828

 

 

 

 

 

 

 

 

Total assets

 

$

2,380,974

 

$

2,224,684

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY:

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

205,477

 

$

148,919

 

 

Deferred compensation - CEO

 

 

366,809

 

 

280,659

 

 

Bank lines of credit, net

 

 

348,247

 

 

340,622

 

 

Convertible debt, net of discount of $1,965 and $9,489 at

June 30, 2016 and December 31, 2015, respectively

 

 

642,204

 

 

644,592

 

 

Advances from Principal Executive Officer and accrued interest

 

 

267,642

 

 

253,073

 

 

Derivative liability

 

 

114,619

 

 

189,019

 

 

Total current liabilities

 

 

1,944,998

 

 

1,856,884

 

 

 

 

 

 

 

 

 

Total Liabilities

 

 

1,944,998

 

 

1,856,884

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

 

 

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

  Authorized, 51 and 51 shares issued and outstanding

 

 

-

 

 

-

 

 

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

  shares authorized, 143,968,982 and 69,272,518 issued

  and outstanding

 

 

1,437

 

 

691

 

 

Additional paid-in capital

 

 

7,454,746

 

 

7,445,512

 

 

Accumulated deficit

 

 

(7,154,792)

 

 

(7,246,263)

 

 

Total stockholders' equity

 

 

301,395

 

 

199,940

 

 

Non-controlling interest in R.S. Fisher, Inc.

 

 

134,585

 

 

167,860

 

 

Total equity

 

 

435,976

 

 

367,800

 

Total liabilities and stockholders' equity

 

$

2,380,974

 

$

2,224,684


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



3




BERGIO INTERNATIONAL, INC.

CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)


 

 

Three Months Ended

 

Six Months Ended

 

 

June 30, 2016

 

 

June 30, 2015

 

June 30, 2016

 

 

June 30, 2015

 

 

 

 

 

 

 

 

 

 

 

Sales, Net

 

 

548,679

 

 

 

353,976

 

 

803,809

 

 

 

618,112

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Sales

 

 

250,721

 

 

 

302,864

 

 

395,955

 

 

 

411,511

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

297,958

 

 

 

51,112

 

 

407,854

 

 

 

206,601

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, General and Administrative Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Selling, General and Administrative expenses

 

 

152,838

 

 

 

311,744

 

 

369,405

 

 

 

463,986

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Selling, General and Administrative Expenses

 

 

152,838

 

 

 

311,744

 

 

369,405

 

 

 

463.986

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (Loss) from Operations

 

 

145,120

 

 

 

(260,632)

 

 

38,449

 

 

 

(257,385)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Other income

 

 

2,630

 

 

 

27

 

 

2,630

 

 

 

1,326

  Interest Expense

 

 

(15,584)

 

 

 

(35,229)

 

 

(49,384)

 

 

 

(53,102)

  Derivative Expense

 

 

-

 

 

 

(456,940)

 

 

-

 

 

 

(456,940)

  Amortization of Debt Discount

 

 

(3,762)

 

 

 

(24,719)

 

 

(7,524)

 

 

 

(40,538)

  Change in Fair Value of Derivatives

 

 

36,606

 

 

 

(72,086)

 

 

63,470

 

 

 

60,046

  Gain on extinguishment of debt

 

 

6,768

 

 

 

3,659

 

 

10,930

 

 

 

3,659

  Amortization of deferred financing costs

 

 

-

 

 

 

(3,952)

 

 

(375)

 

 

 

(5,330)

Total Other Income (Expense)

 

 

26,658

 

 

 

(485,010)

 

 

19,747

 

 

 

(490,879)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (Loss_ before income taxes

 

 

171,778

 

 

 

(745,642)

 

 

58,196

 

 

 

(748,264)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for Income Taxes

 

 

-

 

 

 

-

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

171,778

 

 

$

(745,642)

 

$

58,196

 

 

$

(748,264)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to the non-controlling

  interest in R.S. Fisher, Inc.

 

 

(8,786)

 

 

 

(4,014)

 

 

(33,275)

 

 

 

(4,014)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to Bergio International, Inc.

 

$

180,564

 

 

$

(741,628)

 

$

91,471

 

 

$

(744,250)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) per Common Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.00

 

 

$

(0.07)

 

$

0.00

 

 

$

(0.08)

Fully diluted

 

$

0.00

 

 

$

(0.07)

 

$

0.00

 

 

$

(0.08)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

117,791,761

 

 

 

10,372,074

 

 

100,931,600

 

 

 

9,326,768

Diluted

 

 

874,438,841

 

 

 

10,372,074

 

 

857,578,680

 

 

 

9,326,768





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



4




BERGIO INTERNATIONAL, INC.

CONSOLIDATED STATEMENT OFCHANGES IN STOCKHOLDER’S EQUITY (UNAUDITED)

AS OF JUNE 30, 2016



 

Common Stock

Additional

Paid in

Accumulated

Non-

controlling

interest in R.S.

Total

Stockholders’

 

Shares

Amount

Capital

Deficit

Fisher

Deficit

 

 

 

 

 

 

 

Balance at January 1, 2015

7,398,736

$ 74

$ 7,178,296

$ (6,089,383)

$  -

$ 1,088,987

 

 

 

 

 

 

 

Issuance of stock for debt conversion

61,873,782

617

53,077

-

-

53,694

Intrinsic value associated with convertible note

-

-

36,000

-

-

36,000

To record interest in R.S. Fisher

-

-

178,139

-

171,153

349,292

Net loss

-

-

-

(1,156,880)

(3,293)

(1,160,173)

 

 

 

 

 

 

 

Balance at December 31, 2015

69,272,518

691

7,445,512

(7,246,263)

167,860

367,800

 

 

 

 

 

 

 

Issuance of stock for debt conversion

74,696,464

746

9,234

-

-

9,980

Net loss

-

-

-

91,471

(33,275)

58,196

 

 

 

 

 

 

 

Balance at June 30, 2016

143,968,982

$ 1,437

$ 7,454,746

$ (7,154,792)

$ 134,585

$ 435,976


 

Preferred Stock

 

Shares

Amount

 

 

 

Balance at January 1, 2015

51

$        -

 

 

 

Balance at December 31, 2015

51

$        -

 

 

 

Balance at June 30, 2016

51

$        -





















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



5



BERGIO INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


 

Six Months Ended June 30,

 

2016

 

2015

Operating activities:

 

 

 

Net loss

$

91,471

 

$

(744,250)

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

 

 

 

 

 

  Non-controlling interest

 

(33,275)

 

 

(4,014)

  Depreciation and amortization

 

72,693

 

 

61,517

  Amortization of debt discount and deferred financing costs

 

7,899

 

 

40,538

  Interest expense associated with conversions

 

-

 

 

1,897

  Gain on extinguishment of debt

 

(10,930)

 

 

(3,659)

  Derivative expense

 

-

 

 

456,940

  Change in fair value of derivative liabilities

 

(63,470)

 

 

(60,046)

  Provision for bad debts

 

-

 

 

(7,422)

 

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

(Increase) decrease in:

 

 

 

 

 

  Accounts receivable

 

(438,592)

 

 

(238,859)

  Inventory

 

211,489

 

 

186,300

Increase (decrease) in:

 

 

 

 

 

  Accounts payable and accrued liabilities

 

56,626

 

 

 

  Deferred compensation

 

86,150

 

 

77,467

Net cash used in operating activities

 

(19,939)

 

 

(233,591)

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

  Capital expenditures

 

(1,150)

 

 

(141)

Net used in investing activities

 

(1,150)

 

 

(141)

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

  Advances of bank lines of credit, net

 

7,625

 

 

66,857

  Proceeds from convertible debt

 

-

 

 

170,000

  Advances from stockholder, net

 

14,569

 

 

(2,170)

  Deferred offering costs

 

-

 

 

5,330

Net cash provided by financing activities

 

22,194

 

 

240,017

 

 

 

 

 

 

Net change in cash

 

1,105

 

 

6,285

 

 

 

 

 

 

Cash - beginning of periods

 

2,893

 

 

3,259

 

 

 

 

 

 

Cash - end of periods

$

3,998

 

$

9,544

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

  Cash paid for interest

$

3,436

 

$

10,032

  Cash paid for income taxes

$

-

 

$

-

 

 

 

 

 

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

 

 

 

 

 

 

  Issuance of common stock for convertible debt and accrued interest

$

9,912

 

$

28,843



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



6



BERGIO INTERNATIONAL, INC.

Notes to Consolidated Financial Statements (unaudited)


Note 1 - Nature of Operations and Basis of Presentation


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 corporate name was changed to Bergio International, Inc. Effective July 15, 2013, the Company amended its Certificate of Incorporation to increase the Company’s authorized capital from 1,500,000,000 common shares to 3,000,000,000 common shares of stock. On April 3, 2014, the Company filed a Certificate of Amendment of Certificate of Incorporation with the Secretary of State of the State of Delaware to reduce the par value of all shares of common stock and preferred stock from $0.001 to $0.00001 per share.  On February 26, 2014, the Company filed a Certificate of Amendment of Certificate of Incorporation with the Secretary of State of the State of Delaware to increase the number of authorized shares of capital stock of the Company to 6,000,000,000 shares. Effective on October 14, 2014, the Company filed a Certificate of Amendment of Certificate of Incorporation to effectuate a 1-for-1,000 reverse stock split of the Company’s common stock. All share and per share data has been adjusted to reflect such stock splits and change in par value. 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 experiences significant seasonal volatility. The first two quarters of the year typically represent 15% - 35% of annual sales, and the remaining two quarters represent the remaining portion of annual sales.


Crown Luxe, Inc., a wholly-owned subsidiary, was incorporated in the State of Delaware on March 5, 2014, to operate the Company’s first retail store which was opened in Bergen County, New Jersey in the fourth quarter of 2014. It is our intent to provide another area for growth by establishing a retail outlet for the Company’s products.


On June 1, 2015, the Company acquired a 51% interest in R.S. Fisher, Inc., a Delaware corporation (“R.S. Fisher”), in exchange for funding the company’s operations.  The minority shareholder contributed jewelry molds and inventory valued at $349,292.


In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position of the Company as of June 30, 2016, the results of operations for the three and six months ended June 30, 2016 and 2015, and statements of cash flows for the six months ended June 30, 2016 and 2015.  These results are not necessarily indicative of the results to be expected for the full year.  The financial statements have been prepared in accordance with the requirements of Form 10-Q and consequently do not include disclosures normally made in an Annual Report on Form 10-K.  The December 31, 2015 balance sheet included herein was derived from the audited financial statements included in the Company’s Annual Report on Form 10-K as of that date.  Accordingly, the financial statements included herein should be reviewed in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, as filed with the Securities and Exchange Commission (“SEC”) on March 30, 2016 (the “Annual Report”).


Note 2 - Summary of Significant Accounting Policies


Principles of Consolidation


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


During the six months ended June 30, 2016, there have been no other material changes in the Company’s significant accounting policies to those previously disclosed in the Company’s Annual Report.


The Company evaluated subsequent events, which are events or transactions that occurred after June 30, 2016 through the issuance of the accompanying financial statements.






7



BERGIO INTERNATIONAL, INC.

Notes to Consolidated Financial Statements (unaudited)


Note 2 - Summary of Significant Accounting Policies (continued)


Non-controlling Interest


Non-controlling interest represents third party ownership in the net assets of our consolidated subsidiaries. For financial reporting purposes, the assets and liabilities of our majority owned subsidiaries are consolidated with those of our own, with any third party investor’s interest shown as non-controlling interest.


On June 1, 2015, the Company acquired a 51% interest in R.S. Fisher, in exchange for funding the company’s operations.  The minority holder contributed jewelry molds and inventory valued at $349,292.


Note 3 - Income (Loss) per Share


Basic earnings per share includes no dilution and is computed by dividing earnings available to common stockholders by the weighted average number of common shares outstanding for the period. Dilutive earnings per share reflect the potential dilution of securities that could occur through the effect of common shares issuable upon the exercise of stock options, warrants and convertible securities.  Basic net loss per share equaled the diluted loss per share for the three and six months ended June 30, 2015, since the effect of shares potentially issuable upon the exercise or conversion was anti-dilutive. Equity instruments that may dilute earnings per share in the future are listed in Note 6 below. For the three months and six months ended June 30, 2015 issuable upon the conversion of convertible debt were not included in the computation of diluted net loss because their inclusion would be anti-dilutive


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


 

 

Three Months Ended

 

Six Months Ended

 

 

June 30, 2016

 

June 30, 2015

 

June 30, 2016

 

June 30, 2015

Basic net income (loss) per share computation:

 

 

 

 

 

 

 

 

  Net income (loss)

 

$

180,564

 

$

(741,628)

 

$

91,471

 

$

(744,250)

  Weighted-average common shares outstanding

 

 

117,791,761

 

 

10,372,074

 

 

100,931,600

 

 

9,326,768

  Basic net income (loss) per share

 

$

0.00

 

$

(0.07)

 

$

0.00

 

$

(0.08)

Diluted net income (loss) per share computation:

 

 

 

 

 

 

 

 

 

 

 

 

  Net income (loss)

 

$

180,564

 

$

(741,628)

 

$

91,471

 

$

(744,250)

  Weighted-average common shares outstanding

 

 

117,791,761

 

 

10,372,074

 

 

100,931,600

 

 

9,326,768

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

 

 

756,647,080

 

 

--

 

 

756,647,080

 

 

--

Total adjusted weighted-average shares

 

 

874,438,841

 

 

10,372,074

 

 

857,578,680

 

 

9,326,768

Diluted net income (loss) per share

 

$

0.00

 

$

(0.07)

 

$

0.00

 

$

(0.08)


4 - New Authoritative Accounting Guidance


In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new standard requires financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The standard will be effective for the Company beginning January 1, 2020, with early application permitted. We are evaluating the impact that the adoption of this standard will have on our consolidated financial statements.




8



BERGIO INTERNATIONAL, INC.

Notes to Consolidated Financial Statements (unaudited)


4 - New Authoritative Accounting Guidance (continued)


In March 2016, the FASB issued ASU 2016-09 ("Improvements to Employee Share-Based Payment Accounting") which simplifies several aspects of accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new standard is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years with early adoption permitted. We are evaluating the impact that the adoption of this standard will have on our consolidated financial statements.


In February 2016, the FASB issued ASU 2016-02 ("Leases"), which introduces the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The new standard establishes a right-of-use ("ROU") model that requires a lessee to record an ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. The new standard is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years with early adoption permitted. We are evaluating the impact that the adoption of this standard will have on our consolidated financial statements.


In January 2016, the FASB issued ASU No. 2016-01 (ASC Subtopic 825-10), Financial Instruments- Overall Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this ASU require entities to measure all investments in equity securities at fair value with changes recognized through net income. This requirement does not apply to investments that qualify for the equity method of accounting, to those that result in consolidation of the investee, or for which the entity meets a practicability exception to fair value measurement. Additionally, the amendments eliminate certain disclosure requirements related to financial instruments measured at amortized cost and add disclosures related to the measurement categories of financial assets and financial liabilities. The amendments in this ASU are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted for only certain portions of the ASU. The Company is in the process of assessing the impact, if any, on its consolidated financial statements.


In November 2015, the FASB issued ASU 2015-17 (ASC Topic 740), Income Taxes Balance Sheet Classification of Deferred Taxes. The amendments in this update are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted by all entities as of the beginning of an interim or annual reporting period. The Company is in the process of assessing the impact, if any, on its consolidated financial statements.


In September 2015, the FASB issued ASU 2015-16 (ASC Topic 805), Business Combinations Simplifying the Accounting for Measurement-Period Adjustments. The amendments in this update require that an acquirer recognize measurement period adjustments in the period in which the adjustments are determined. The income effects of such measurement period adjustments are to be recorded in the same period’s financial statements but calculated as if the accounting had been completed as of the acquisition date. The impact of measurement period adjustments to earnings that relate to prior period financial statements are to be presented separately on the income statement or disclosed by line item. The amendments in this update are for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted for public business entities for reporting periods for which financial statements have not yet been issued. The adoption of this new guidance is not expected to have a material impact on the Company’s consolidated financial statements and disclosures.


In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs with Line-of-Credit Arrangements (ASU 2015-15). The previous guidance in ASU 2015-03, as defined below, did not address the presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. Given the absence of authoritative guidance within ASU 2015-03, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. ASU 2015-15 is effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted and entities shall apply the guidance retrospectively to all prior year periods presented. The Company is in the process of assessing the effects of the application of the new guidance.




9



BERGIO INTERNATIONAL, INC.

Notes to Consolidated Financial Statements (unaudited)


4 - New Authoritative Accounting Guidance (continued)


In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). To simplify presentation of debt issuance costs, ASU 2015-03 requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. ASU 2015-03 is effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted and entities shall apply the guidance retrospectively to all prior year periods presented. The Company is in the process of assessing the effects of the application of the new guidance.


In May 2014, the FASB issued ASU 2014-09 that introduces a new five-step revenue recognition model in which an entity should 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. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. This standard is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. The Company is currently evaluating the new guidance to determine the impact, if any, it will have on its consolidated financial statements.


In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements - Going Concern”, which requires management to evaluate whether conditions or events raise substantial doubt about the entity’s ability to continue as a going concern and, if so, to provide related footnote disclosures. The guidance is effective for annual or interim reporting periods beginning on or after December 15, 2016. Early adoption is permitted. The Company does not expect the adoption of this ASU to have a material impact on the Company’s consolidated Financial Statements.


In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory”. This ASU applies to inventory that is measured using first-in, first-out (“FIFO”) or average cost. Under the updated guidance, an entity should measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predicable costs of completion, disposal and transportation. Subsequent measurement is unchanged for inventory that is measured using last-in, last-out (“LILO”). This ASU is effective for annual and interim periods beginning after December 15, 2016, and should be applied prospectively with early adoption permitted at the beginning of an interim and annual reporting period. We are currently evaluating the impact of adopting ASU 2015-11 on our consolidated financial statements and related disclosures.


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


Note 5 - Bank Lines of Credit


A summary of the Company’s credit facilities is as follows:


 

June 30,

 

December 31,

 

2016

 

2015

Various unsecured Credit Cards, minimum payment of principal and interest are due monthly at the credit card’s annual interest rate. June 30, 2016 and December 31, 2015, the interest rates ranged from 3.99% to 52.9%.

$

348,247

 

$

340,622

Current maturities included in current liabilities

$

348,247

 

$

340,622


The Company’s CEO also serves as a guarantor of the Company’s debt.




10



BERGIO INTERNATIONAL, INC.

Notes to Consolidated Financial Statements (unaudited)


Note 6 - Convertible Debt


Fife, Typenex and Iliad


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


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


On October 17, 2014, the Company entered into a financing arrangement with Iliad to provide additional financing in the amount of up to $450,000 through the issuance of a Secured Convertible Promissory Note (the “Note”). The Company agreed to cover Iliad’s legal, accounting and other related fees in the amount of $5,000, which is included in the principal balance of the Note. The Note will accrue interest at the rate of 8% per annum until the Note is paid in full. Monies are to be drawn in eight tranches with the initial tranche in the amount of $105,000, and the remaining balance of $350,000 in 7 tranches of $50,000 each. The Company drew down the initial tranche on October 17, 2014. The Note has a maturity date of July 17, 2016. The Company is currently negotiating with the lender (see below).


Beginning six months after October 17, 2014 and on the same day each month thereafter, the Company shall make an installment payment, based upon the unpaid balance. At the option of the Company, payments may be made in cash or by converting the installment amount into shares of the Company’s common stock. The conversion price is equal to the lesser of (i) $0.0005 per share and (ii) 67.5% of the average of the three lowest closing bid prices in the 15 trading days immediately preceding the conversion. The Company has the right to prepay the Note at 135% of the outstanding balance at the time of prepayment. There were no conversions during the six months ended June 30, 2016. The outstanding balance at June 30, 2016 and December 31, 2015 was $100,000, respectively, with accrued interest of $13,158 and $10,630 at June 30, 2016 and December 31, 2015, respectively.


During the year ended December 31, 2014, the Company drew down an additional $314,703. There were no conversions during the six months ended June 30, 2016. The outstanding balances at June 30, 2016 and December 31, 2015 were $328,470 and $328,470, respectively, with accrued interest of $19,290 and $11,005 at June 30, 2016 and December 31, 2015, respectively.


During the three months ended June 30, 2016, the Company made a retail sale to a customer in the amount of $497,600. This customer holds convertible debt which the Company is obligated to pay them in the amount of approximately $428,000. The Company is currently negotiating an agreement with this customer to offset the convertible debt against the accounts receivable.








11



BERGIO INTERNATIONAL, INC.

Notes to Consolidated Financial Statements (unaudited)


Note 6 - Convertible Debt (continued)


Third Party Note


In November 2014, the Company converted a portion of its outstanding accounts payable for legal services to a third party into two convertible promissory notes in the aggregate amount of $63,275. These are demand notes and accrue interest at the rate of 10% on the outstanding balance.  The notes are convertible into shares of the Company’s common stock based on 65% of the average ten trading days closing bid price during the preceding ten consecutive trading days immediately prior to the conversion. During the six months ended June 30, 2016, principal of $9,159 was converted into 67,852,048 shares of common stock. The outstanding balances at June 30, 2016 and December 31, 2015 were $39,974 and $49,133, respectively, with accrued interest of $6,442 and $4,249 at June 30, 2016 and December 31, 2015, respectively.


On April 7, 2015, the convertible promissory notes and accrued interest was assigned to Carebourn Capital L.P. (“Carebourn Capital”). All terms and conditions remained the same, except that notes are convertible into shares of the Company’s common stock equal to 50% of the average ten trading days closing bid price during the preceding ten consecutive trading days immediately prior to the conversion.


KBM Worldwide


On February 4, 2015, the Company entered into an 8% convertible note in the amount of $54,000 with KBM Worldwide, Inc. (“KBM Worldwide”). The principal and accrued interest is payable on or before November 6, 2015. At the option of the Company, but not before six months from the date of issuance, the holder may elect to convert all or part of such note into the Company’s common stock. The note is convertible into shares of the Company’s common stock at a price of 60% of the average of the three lowest trading prices during the 10 days prior to the date of conversion or $0.00009, whichever is greater. There were no conversions during the six months ended June 30, 2016. The outstanding balance at June 30, 2016 and December 31, 2015 was $41,260 with accrued interest of $5,253 and $3,584 at June 30, 2016 and December 31, 2015, respectively.


Vis Vires Group, Inc.


On March 11, 2015, the Company entered into an 8% convertible note in the amount of $38,000 with Vis Vires Group, Inc.  (“Vis Vires”). The principal and accrued interest is payable on or before November 6, 2015. At the option of the Company, but not before six months from the date of issuance, the holder may elect to convert all or part of the convertible into the Company’s common stock. The note is convertible into shares of the Company’s common stock at a price equal to 60% of the average of the three lowest trading prices during the 10 days prior to the date of conversion or $0.00009, whichever is greater. There were no conversions during the six months ended June 30, 2016. The outstanding balance at June 30, 2016 and December 31, 2015 was $38,000 with accrued interest of $4,028 and $3,584 at June 30, 2016 and December 31, 2015, respectively.


On April 30, 2015, the Company entered into an 8% convertible note in the amount of $33,000 with Vis Vires. The principal and accrued interest is payable on or before November 6, 2015. At the option of the Company, but not before six months from the date of issuance, the holder may elect to convert all or part of the convertible into the Company’s common stock. The note is convertible into shares of the Company’s common stock at a price equal to 60% of the average of the three lowest trading prices during the 10 days prior to the date of conversion or $0.00009, whichever is greater. There were no conversions during the six months ended June 30, 2016. The outstanding balance at March 31, 2016 and December 31, 2015 was $33,000 with accrued interest of $3,029 and $1,695 at June 30, 2016 and December 31, 2015, respectively.






12



BERGIO INTERNATIONAL, INC.

Notes to Consolidated Financial Statements (unaudited)


Note 6 - Convertible Debt (continued)


LG Capital Funding, LLC


On May 4, 2015, the Company entered into an 8% convertible note in the amount of $36,750 with LG Capital Funding, LLC (“LG Capital”). The principal and accrued interest is payable on or before May 4, 2016. The holder, at its option, may elect to convert all or part ofsuch note the Company’s common stock at a price equal to 60% of the lowest trading prices during the 20 days prior to the date of conversion. During the six months ended June 30, 2016, principal of $753 and interest of $68 was converted into 6,844,416 shares of common stock. The outstanding balances at June 30, 2016 and December 31, 2015 were $35,687 and $36,440, respectively, with accrued interest of $3,442 and $1,968 at June 30, 2016 and December 31, 2015, respectively.


JMJ Financial


On April 15 2015, the Company entered into a $250,000 convertible note with JMJ Financial. The consideration was $225,000 and $25,000 original issue discount.  The principal and accrued interest is payable on or before May 4, 2016. On April 15, 2015, the Company borrowed $25,000 of this amount. The holder, at its option, may elect to convert all or part of the convertible into the Company’s common stock at a price equal to the lesser of $0.018 per share or 60% of the lowest trading price during the 25 days prior to the date of conversion. There were no conversions during the six months ended June 30, 2016. The outstanding balance at June 30, 2016 and December 31, 2015 was $27,778 with accrued interest of $2,625 and $1,501 at June 30, 2016 and December 31, 2015, respectively.


As of June 30, 2016 and December 31, 2015, total convertible debt was $642,204 and $644,592, respectively, net of debt discount of $1,965 and $9,489, respectively.


Note 7 - Derivative Liability


The Company accounts for the fair value of the conversion features of its convertible debt in accordance with ASC Topic No. 815-15 “Derivatives and Hedging; Embedded Derivatives” (“Topic No. 815-15”). Topic No. 815-15 requires the Company to bifurcate and separately account for the conversion features as an embedded derivative contained in the Company’s convertible debt. The Company is required to carry the embedded derivative on its balance sheet at fair value and account for any unrealized change in fair value as a component of results of operations. The Company values the embedded derivatives using the Black-Scholes pricing model. Amortization of debt discount amounted to $3,762 and $7,524 for the three and six months ended June 30, 2016, respectively, as compared to $24,719 and $40,538 for the three and six months ended June 30, 2015, respectively. The derivative liability is revalued each reporting period using the Black-Scholes model. As of June 30, 2016 and December 31, 2015, the derivative liability was $114,619 and $189,019, respectively.


The Black-Scholes model utilized the following inputs to value the derivative liability at the date of issuance of the convertible note at March 31, 2016:


Stock Price - The stock price was based closing price of the Company’s stock as of the valuation date, which was $0.0002 at June 30, 2016.


Variable Conversion Prices - The conversion price was based on: (i) 50% of the average closing bid price during the preceding ten consecutive trading days immediately prior to the conversion at June 30, 2016 for Carebourn Capital; (ii) 60% of the lowest trading prices during the 20 days prior to the date of conversion at June 30,2016 for LG Capital; (iii)  the lower of $0.018 per share or 60% of the lowest trading price during the 25 days prior to the date of conversion at June 30, 2016 for JMJ Financial.


Time to Maturity - The time to maturity was determined based on the length of time between the valuation date and the maturity of the debt. Time to maturity ranged from 34 to 289 days at June 30, 2016.




13



BERGIO INTERNATIONAL, INC.

Notes to Consolidated Financial Statements (unaudited)


Note 7 - Derivative Liability (continued)


Risk Free Rate - The risk free rate was based on the Treasury Note rate as of the valuation dates with a term commensurate with the remaining term of the debt. The risk free rate at June 30, 2016 ranged from 0.20% to 0.45%, based on the term of the note.


Volatility - The volatility was based on the historical volatility of the Company. The average volatility was 415.12% at June 30, 2016.


Note 8 - Related Party Transactions


The Company receives periodic advances from its principal executive officer based upon the Company’s cash flow needs. At June 30, 2016 and December 31, 2015, $267,642 and $253,073, respectively, was due to the principal executive officer, including accrued interest.  Interest expense is accrued at an average annual market rate of interest which was 3.15% at June 30, 2016 and December 31, 2015, respectively.  Interest expense associated with this loan was $4,101 and $8,106 for the three and six months ended June 30, 2016 as compared to $1,453 and $3,038 for the three and six months ended June 30, 2015, respectively. No terms for repayment have been established. As a result, the amount is classified as a Current Liability.


Effective September 1, 2011, the Company and CEO entered into an Amended and Restated Employment Agreement (the “Amended Agreement”) which primarily retains the term and compensation of the original agreement. The Amended Agreement, however, removes the section which previously provided for the issuance of Company common stock to the CEO, from time to time, when the Company is unable to pay the CEO the full amount of his Base Salary (as defined in the Amended Agreement) which would allow the CEO to maintain a fifty-one percent (51%) share of the Company’s outstanding common stock.  However, the CEO does have the right to request all or a portion of his unpaid Base Salary be paid with the Company’s restricted common stock. In addition, the Amended Agreement provides for the issuance of 51 shares of newly authorized Series A Preferred Stock to be issued to the CEO. As defined in the Certificate of Designations, Preferences and Rights of the Series A Preferred Stock, each share of Series A Preferred Stock has voting rights such that the holder of 51 shares of Series A Preferred Stock will effectively maintain majority voting control of the Company. Effective November 3, 2011, the CEO notified the Company that for the one year period, retroactive from April 1, 2011, through December 31, 2012, he would reduce his Base Salary to $100,000. The reduction in base compensation was subsequently extended to December 31, 2013. The CEO is currently deferring a portion of his salary to conserve cash. Deferred wages due to the CEO amounted to $366,809 and $280,659 for the periods ended June 30, 2016 and December 31, 2015, respectively.


The Company is in process of extending this agreement.


Note 9 - Litigation


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











14




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


Forward Looking Statements


This quarterly report on Form 10-Q and other reports (collectively, the “Filings”) filed by Bergio International, Inc. (“Bergio” or the “Company”) from time to time with the U.S. Securities and Exchange Commission (the “SEC”) contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management.  Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof.  When used in the Filings, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements.  Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks contained in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed with the SEC on March 30, 2016, relating to the Company’s industry, the Company’s operations and results of operations, and any businesses that the Company may acquire.  Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.


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


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


Plan of Operation


We concentrate our business on boutique, upscale jewelry stores. We currently sell our jewelry to approximately 50 independent jewelry retailers across the United States. We have spent over $3 million in branding the Bergio name through tradeshows, trade advertising, national advertising and billboard advertising since launching the line in 1995. As of October 1, 2014, the Company ceased operations in Russia due to the economic, currency and political condition in Russia. The Company intends to concentrate on its domestic operations. Our products consist of a wide range of unique styles and designs made from precious metals such as, gold, platinum, and Karat gold, as well as diamonds and other precious stones. We currently design and produce approximately 100 to 150 product styles. Current retail prices for our products range from $400 to $200,000. We have manufacturing control over our line as a result of having a manufacturing facility in New Jersey as well as subcontracts with facilities located in Italy.


It is our intention to establish Bergio as a holding company for the purpose of acquiring established jewelry design and manufacturing firms who possess branded product lines. Branded product lines are products and/or collections whereby the jewelry manufacturers have established their products within the industry through advertising in consumer and trade magazines as well as possibly obtaining federally registered trademarks of their products and collections. This is in line with our strategy and belief that a brand name can create an association with innovation, design and quality which helps add value to the individual products as well as facilitate the introduction of new products.



15



We intend to acquire design and manufacturing firms throughout the United States and Europe. We intend to locate potential candidates through our relationships in the industry.  However, as of the date of this report, we do not have any binding agreements with any potential acquisition candidates.


Crown Luxe, Inc. was incorporated in the State of Delaware on March 5, 2014 in order to operate the Company’s first retail store located in Bergen County, New Jersey, which opened in the fourth quarter of 2014. We intend to provide another area for growth by establishing a retail outlet for the Company’s products.


On June 1, 2015, the Company acquired a 51% interest in R.S. Fisher, Inc., a Delaware corporation (“R.S. Fisher”), in exchange for funding the company’s operations. The minority shareholder contributed jewelry molds and inventory valued at $349,292.


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.


Results of Operations


 

Three Months

Ended

Three Months

Ended

Dollar Increase

Percent Increase

 

June 30, 2016

June 30, 2015

(Decrease)

(Decrease)

Sales, net

$    548,679

$   353,976

$      194,703

55.0%

 

 

 

 

 

Gross Profit

$    297,958

$   51,112

246,846

483.0%

 

 

 

 

 

Gross Profit as a % of Sales

54.3%

14.4%

 

 

 

 

 

 

 

 

Six Months

Ended

Six Months

Ended

Dollar Increase

Percent Increase

 

June 30, 2016

June 30, 2015

(Decrease)

(Decrease)

Sales, net

$    803,809

$   618,112

$      185,897

30.1%

 

 

 

 

 

Gross Profit

$    407,854

$   206,601

$      201,253

97.4%

 

 

 

 

 

Gross Profit as a % of Sales

50.7%

33.4%

 

 


Sales


Net sales for the three months ended June 30, 2016 increased $194,703 (55%) to $548,679, as compared to $353,976 for the three months ended June 30, 2015. This increase is primarily attributed to a large sale to a retail customer in the amount of $497,600, which accounted for a majority of the sales for the current quarter.  The receivable from this sale is intended to be offset with convertible debt which the Company owes to this customer (See Convertible Debt in Liquidity and Capital Resources below). The Company intends to concentrate on its domestic operations and explore additional opportunities to expand its business. However, there has been a general slowdown in the market for the Company’s products.


Net sales for the six months ended June 30, 2016 increased $185,894 (30.1%) to $803,809, as compared to $618,112 for the six months ended June 30, 2015. This increase is primarily attributed to a large sale to a retail customer in the amount of $497,600, which accounted for a majority of the sales for the current quarter.  The receivable from this sale is intended to be offset with convertible debt which the Company owes to this customer (Liquidity and Capital Resources below). The Company intends to concentrate on its domestic operations and explore additional opportunities to expand its business. However, there has been a general slowdown in the market for the Company’s products.





16



Gross Profit


Gross profit for the three and six months ended June 30, 2016 increased $246,846 (483%) and $201,253 (97.4%) to $297,958 and $407,854, respectively, as compared to $51,112 and $206,601 for the three and six months ended June 30, 2015, respectively.  This increase in gross profit is primarily attributed to the large retail sale noted above which had a high gross profit. For the three months ended June 30, 2016, our gross profit as a percentage of sales was 54.3% as compared to a gross profit as a percentage of sales of 14.4% for the three months ended June 30, 2015. For the six months ended June 30, 2016, our gross profit as a percentage of sales was 50.7% as compared to a gross profit as a percentage of sales of 33.4% for the six months ended June 30, 2015.


Selling, General and Administrative Expenses


Total selling, general and administrative expenses decreased $158,906 (51%) and $94,581 (20.4%) to $152,838 and $369,405 for the three and six months ended June 30, 2016, respectively, as compared to $311,744 and $463,986 for the three and six months ended June 30, 2015, respectively. This decrease is primarily the result of lower marketing expenses and professional fees.


Income (Loss) from Operations


As a result of the above, we had income from operations of $145,120 for the three months ended June 30, 2016 as compared to a loss from operations of $260,632 for the three months ended June 30, 2015. For the six months ended June 30, 2016 we had income from operations in the amount of 38,449 as compared to a loss from operations in the amount of $257,385 for the six months ended June 30, 2015.


Other Income (Expense)


For the three months ended June 30, 2016, the Company had Other Income of $26,658 as compared to Other Expense of $485,010 for the three months ended June 30, 2015. This decrease in Other Expense is primarily attributed to lower derivative expense for the three months ended June 30, 2016.


For the six months ended June 30, 2016, the Company had Other Income of $19,747 as compared to Other Expense of $490,879 for the six months ended June 30, 2015. This decrease in Other Expense is primarily attributed to lower derivative expense for the six months ended June 30, 2016.

 

Net Income (Loss)


As a result of the above, we had net income of $171,778 for the three months ended June 30, 2016 as compared to a net loss of $745,642 for the three months ended June 30, 2015. For the six months ended June 30, 2016, we had net income of $58,196 as compared to a net loss of $748,264 for the six months ended June 30, 2015


Liquidity and Capital Resources


The following table summarizes working capital at March 31, 2016, compared to December 31, 2015:


 

 

June 30, 2016

 

December 31, 2015

 

Increase/

(Decrease)

 

 

 

 

 

 

 

Current Assets

 

$

1,698,602

 

$

1,470,769

 

$

227,833

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

$

1,944,998

 

$

1,856,884

 

$

88,114

 

 

 

 

 

 

 

 

 

 

Working Capital

 

$

(246,396)

 

$

(386,115)

 

$

139,719


Over the next twelve months we believe that our existing capital combined with cash from operations as well loans from the Company’s Chief Executive Officer will be sufficient to sustain our current operations. Our Chief Executive Officer has agreed to continue, from time to time as needed, to advance funds under similar terms as his current advances. It is anticipated that we will need to sell additional equity and/or debt securities in the event we locate potential mergers and/or acquisitions or require additional capital for our plan to establish retail stores.



17



Our working capital increased $139,719 primarily due to an increase in accounts receivable (see Convertible Debt below).


During the six months ended June 30, 2016, the Company had a net increase in cash of $1,150. The Company’s principal sources and uses of funds were as follows:


Cash used in operating activities


For the six months ended March 31, 2016, the Company used $19,939 in cash for operations as compared to $233,591 in cash for the six months ended June 31, 2015. This decrease in cash used in operations is primarily attributed change in accounts receivable offset partially by the decrease in inventory and the increase in operating income.


Cash used in investing activities


Net cash used in investing activities was $1,150 for the six months ended June 30, 2016 as compared to $141 for the six months ended June 30, 2015, due to a modest increase in purchases of equipment.


Cash provided by financing activities


Net cash provided by financing activities for the six months ended June 30, 2016 was $22,194 as compared to $240,017 for the six months ended June 30, 2015. This decrease is primarily the result of the lower proceeds from convertible debt and bank lines of credit.


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


Bank Lines of Credit and Notes Payable


We have a number of various unsecured credit card obligations.  These obligations require minimal monthly payments of interest and principal and as of June 30, 2016, have interest rates ranging from 3.99% to 52.9%.  As of June 30, 2016, we have outstanding balances related to these obligations of $348,247.


Convertible Debt


From time to time the Company enters into certain financing agreements for convertible debt. For the most part, the Company settles these obligations with the Company’s common stock.  As of June 30, 2016, the Company had outstanding convertible debt in the amount of $642,204, net of debt discount in the amount of $1,965. During the three months ended June 30, 2016, the Company made a retail sale to a customer in the amount of $497,600. This customer holds convertible debt which the Company is obligated to pay them in the amount of approximately $428,000. The Company is currently negotiating an agreement with this customer to offset the convertible debt against the accounts receivable.


Satisfaction of Our Cash Obligations for the Next 12 Months


A critical component of our operating plan impacting our continued existence is to efficiently manage 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.







18



Over the next twelve months we believe that our existing capital combined with cash flow from operations and advances from our major stockholder will be sufficient to sustain our current operations.  However, in the event we locate potential acquisitions and/or mergers we will most likely need to obtain additional funding through the sale of equity and/or debt securities. There can be no assurance that if additional funding is required we will be able to secure it on terms that are favorable to us or at all.


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.


Significant Changes in the Number of Employees


We currently have three full-time employees and three part-time employees.  Of our current employees, one is in sales and marketing, two are manufacturing and three hold administrative and executive positions.  None of our employees are subject to any collective bargaining agreements.  We do not anticipate a significant change in the number of full time employees over the next 12 months.


Off-Balance Sheet Arrangements


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


Critical Accounting Policies


The Company prepares its financial statements in accordance with GAAP. Preparing financial statements in accordance with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reported period.


Our critical accounting policies are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the SEC on March 30, 2016 (the “Annual Report”). There have been no changes in our critical accounting policies. Our significant accounting policies are described in our notes to the 2015 consolidated financial statements included in our Annual Report.


Recently Issued Accounting Standards


In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new standard requires financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The standard will be effective for the Company beginning January 1, 2020, with early application permitted. We are evaluating the impact that the adoption of this standard will have on our consolidated financial statements.


In March 2016, the FASB issued ASU 2016-09 ("Improvements to Employee Share-Based Payment Accounting") which simplifies several aspects of accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new standard is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years with early adoption permitted. We are evaluating the impact that the adoption of this standard will have on our consolidated financial statements.




19



In February 2016, the FASB issued ASU 2016-02 ("Leases"), which introduces the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The new standard establishes a right-of-use ("ROU") model that requires a lessee to record an ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. The new standard is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years with early adoption permitted. We are evaluating the impact that the adoption of this standard will have on our consolidated financial statements.


In January 2016, the FASB issued ASU No. 2016-01 (ASC Subtopic 825-10), Financial Instruments- Overall Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this ASU require entities to measure all investments in equity securities at fair value with changes recognized through net income. This requirement does not apply to investments that qualify for the equity method of accounting, to those that result in consolidation of the investee, or for which the entity meets a practicability exception to fair value measurement. Additionally, the amendments eliminate certain disclosure requirements related to financial instruments measured at amortized cost and add disclosures related to the measurement categories of financial assets and financial liabilities. The amendments in this ASU are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted for only certain portions of the ASU. The Company is in the process of assessing the impact, if any, on its consolidated financial statements.


In November 2015, the FASB issued ASU 2015-17 (ASC Topic 740), Income Taxes Balance Sheet Classification of Deferred Taxes. The amendments in this update are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted by all entities as of the beginning of an interim or annual reporting period. The Company is in the process of assessing the impact, if any, on its consolidated financial statements.


In September 2015, the FASB issued ASU 2015-16 (ASC Topic 805), Business Combinations Simplifying the Accounting for Measurement-Period Adjustments. The amendments in this update require that an acquirer recognize measurement period adjustments in the period in which the adjustments are determined. The income effects of such measurement period adjustments are to be recorded in the same period’s financial statements but calculated as if the accounting had been completed as of the acquisition date. The impact of measurement period adjustments to earnings that relate to prior period financial statements are to be presented separately on the income statement or disclosed by line item. The amendments in this update are for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted for public business entities for reporting periods for which financial statements have not yet been issued. The adoption of this new guidance is not expected to have a material impact on the Company’s consolidated financial statements and disclosures.


In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs with Line-of-Credit Arrangements (ASU 2015-15). The previous guidance in ASU 2015-03, as defined below, did not address the presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. Given the absence of authoritative guidance within ASU 2015-03, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. ASU 2015-15 is effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted and entities shall apply the guidance retrospectively to all prior year periods presented. The Company is in the process of assessing the effects of the application of the new guidance.


In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). To simplify presentation of debt issuance costs, ASU 2015-03 requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. ASU 2015-03 is effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted and entities shall apply the guidance retrospectively to all prior year periods presented. The Company is in the process of assessing the effects of the application of the new guidance.






20




In May 2014, the FASB issued ASU 2014-09 that introduces a new five-step revenue recognition model in which an entity should 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. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. This standard is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. The Company is currently evaluating the new guidance to determine the impact, if any, it will have on its consolidated financial statements.


In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements - Going Concern”, which requires management to evaluate whether conditions or events raise substantial doubt about the entity’s ability to continue as a going concern and, if so, to provide related footnote disclosures. The guidance is effective for annual or interim reporting periods beginning on or after December 15, 2016. Early adoption is permitted. The Company does not expect the adoption of this ASU to have a material impact on the Company’s consolidated Financial Statements.


In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory”. This ASU applies to inventory that is measured using first-in, first-out (“FIFO”) or average cost. Under the updated guidance, an entity should measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predicable costs of completion, disposal and transportation. Subsequent measurement is unchanged for inventory that is measured using last-in, last-out (“LILO”). This ASU is effective for annual and interim periods beginning after December 15, 2016, and should be applied prospectively with early adoption permitted at the beginning of an interim and annual reporting period. We are currently evaluating the impact of adopting ASU 2015-11 on our consolidated financial statements and related disclosures.


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


Item 3. Quantitative and Qualitative Disclosures about Market Risk


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


Item 4. Controls and Procedures


(a) Evaluation of Disclosure Controls and Procedures


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


We carried out an evaluation, under the supervision and with the participation of our management, including our PEO and PFO, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Based upon that evaluation, the PEO and PFO concluded that the Company’s disclosure controls and procedures were ineffective.





21




(b) Changes in Internal Control over Financial Reporting


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

 

 

 

 

 

 

 

 












































22




PART II - OTHER INFORMATION


Item 1. Legal Proceedings.


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


Item 1A. Risk Factors.


We believe there are no changes that constitute material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on March 20, 2016.


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


During the three months ended June 30, 2016, we have issued the following securities which were not registered under the Securities Act. Unless otherwise indicated, all of the share issuances described below were made in reliance on the exemption from registration provided by Section 4(2) of the Securities Act for transactions not involving a public offering.


On April 11, 2016, we issued 4,435,767 shares of common stock valued at $643 to Carebourn Capital L.P. (“Carebourn Capital”) for conversion of its convertible debt.


On April 20, 2016, we issued 4,435,767 shares of common stock valued at $577 to Carebourn Capital for conversion of its convertible debt.


On May 13, 2016, we issued 5,323,496 shares of common stock valued at $719 to Carebourn Capital for conversion of its convertible debt.


On May 20, 2016, we issued 5,584,347 shares of common stock valued at $698 to Carebourn Capital for conversion of its convertible debt.


On June 2, 2016, we issued 5,857,980 shares of common stock valued at $644 to Carebourn Capital for conversion of its convertible debt.


On June 8, 2016, we issued 5,857,980 shares of common stock valued at $644 to Carebourn Capital for conversion of its convertible debt.


On June 14, 2016, we issued 5,857,980 shares of common stock valued at $615 to Carebourn Capital for conversion of its convertible debt.


On June 22, 2016, we issued 6,844,416 shares of common stock valued at $889 to Carebourn Capital for conversion of its convertible debt.


Item 3. Defaults upon Senior Securities.


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


Item 4. Mine Safety Disclosure.


Not applicable.




23




Item 5. Other Information.


Not applicable.


Item 6. Exhibits.


Exhibit No.

 

Description

 

 

 

31.1

 

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

 

 

 

31.2

 

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

 

 

 

32.1

 

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

 

 

 

32.2

 

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

 

 

 

101.INS

 

XBRL Instance Document *

 

 

 

101.SCH

 

XBRL Taxonomy Extension Schema *

 

 

 

101.CAL

 

XBRL Taxonomy Extension Calculation Linkbase *

 

 

 

101.DEF

 

XBRL Taxonomy Extension Definition Linkbase *

 

 

 

101.LAB

 

XBRL Taxonomy Extension Label Linkbase *

 

 

 

101.PRE

 

XBRL Taxonomy Extension Presentation Linkbase *


* Filed herewith

























24




SIGNATURES


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



 

 

 

BERGIO INTERNATIONAL, INC.

 

 

 

 

 

 

 

 

 

 

 

 

Date: August 15, 2016

 

By:

/s/ Berge Abajian

 

 

 

 

 

Name: Berge Abajian

 

 

 

 

 

Title: Chief Executive Officer

 

 

 

 

 

(Principal Executive Officer)

(Principal Financial Officer)

(Principal Accounting Officer)

 










































25


EX-31.1 2 brgo_ex311.htm CERTIFICATION ex-31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002


I, Berge Abajian, certify that:


1.

I have reviewed this Form 10-Q of Bergio International, Inc.;


2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;


4.

I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:


b)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be  designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)

Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.

I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


b)

Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: August 15, 2016

By: /s/ Berge Abajian

 

Berge Abajian

 

Principal Executive Officer

 

Bergio International, Inc.




EX-31.2 3 brgo_ex312.htm CERTIFICATION ex-31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002


I, Berge Abajian, certify that:


1.

I have reviewed this Form 10-Q of Bergio International, Inc.;


2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;


4.

I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:


b)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be  designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)

Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.

I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


b)

Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: August 15, 2016

By: /s/ Berge Abajian

 

Berge Abajian

 

Principal Financial Officer

 

Bergio International, Inc.




EX-32.1 4 brgo_ex321.htm CERTIFICATION ex-32.1




CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002


In connection with this Quarterly Report of Bergio International, Inc. (the “Company”), on Form 10-Q for the quarter ended June 30, 2016, as filed with the U.S. Securities and Exchange Commission on the date hereof, I, Berge Abajian, Principal Executive Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:


(1)

Such Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


(2)

The information contained in such Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, fairly presents, in all material respects, the financial condition and results of operations of the Company.

 


Date: August 15, 2016

By:

/s/ Berge Abajian

 

 

 

Berge Abajian

 

 

 

Principal Executive Officer

Bergio International, Inc.

 


 






EX-32.2 5 brgo_ex322.htm CERTIFICATION ex-32.2



CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002


In connection with this Quarterly Report of Bergio International, Inc. (the “Company”), on Form 10-Q for the quarter ended June 30, 2016 as filed with the U.S. Securities and Exchange Commission on the date hereof, I, Berge Abajian, Principal Financial Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:



(1)

Such Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

  

(2)

The information contained in such Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, fairly presents, in all material respects, the financial condition and results of operations of the Company.

 


Date: August 15, 2016

By:

/s/ Berge Abajian

 

 

 

Berge Abajian

 

 

 

Principal Financial Officer

Bergio International, Inc.

 






EX-101.INS 6 brgo-20160630.xml 3998 2893 489692 51100 1204912 1416401 375 1698602 1470769 676544 748087 5828 5828 682372 753915 2380974 2224684 205477 148919 366809 280659 267642 253073 1944998 1856884 1944998 1856884 1437 691 7454746 7445512 -7154792 -7246263 134585 167860 435976 367800 2380974 2224684 0.00001 0.00001 51 51 51 51 51 51 0.00001 0.00001 6000000000 6000000000 143968982 69272518 143968982 69272518 51 7398736 74 7178296 -6089383 1088987 61873782 617 53262 53879 36000 36000 178139 171153 349292 -1156880 -3293 -1160173 51 69272518 691 7445697 -7246263 167860 367800 74696464 746 9234 9980 91471 -33275 58196 51 143968982 1437 7454746 -7154792 134585 435976 72693 61517 7899 40538 1897 456940 7422 -438592 -238859 211489 186300 56626 86150 77467 -19939 -233591 1150 141 -1150 -141 7625 66857 170000 14569 -2170 -5330 22194 240017 1105 6285 2893 3259 3998 9544 3436 10032 9912 28843 548679 353976 803809 618112 250721 302864 395955 411511 297958 51112 407854 206601 152838 311744 369405 463986 152838 311744 369405 463986 145120 -260632 38449 -257385 2630 27 2630 1326 15584 35229 49384 53102 456940 456940 3762 24719 7524 40538 36606 -72086 63470 60046 6768 3659 10930 3659 3952 375 5330 26658 -485010 19747 -490879 171778 -745642 58196 -748264 171778 -745642 58196 -748264 -8786 -4014 -33275 -4014 180564 -741628 91471 -744250 0.00 -0.07 0.00 -0.08 10-Q 2016-06-30 false Bergio International, Inc. 0001431074 brgo --12-31 143968982 Smaller Reporting Company Yes No No 2016 Q2 <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><b><u>Note 1 - Nature of Operations and Basis of Presentation</u></b></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Bergio International, Inc. (the &#147;Company&#148;) was incorporated in the State of Delaware on July 24, 2007 under the name Alba Mineral Exploration, Inc.&#160; On October 21, 2009, as a result of a Share Exchange Agreement, the corporate name was changed to Bergio International, Inc. Effective July 15, 2013, the Company amended its Certificate of Incorporation to increase the Company&#146;s authorized capital from 1,500,000,000 common shares to 3,000,000,000 common shares of stock. On April 3, 2014, the Company filed a Certificate of Amendment of Certificate of Incorporation with the Secretary of State of the State of Delaware to reduce the par value of all shares of common stock and preferred stock from $0.001 to $0.00001 per share.&#160; On February 26, 2014, the Company filed a Certificate of Amendment of Certificate of Incorporation with the Secretary of State of the State of Delaware to increase the number of authorized shares of capital stock of the Company to 6,000,000,000 shares. Effective on October 14, 2014, the Company filed a Certificate of Amendment of Certificate of Incorporation to effectuate a 1-for-1,000 reverse stock split of the Company&#146;s common stock. All share and per share data has been adjusted to reflect such stock splits and change in par value. 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 experiences significant seasonal volatility. The first two quarters of the year typically represent 15% - 35% of annual sales, and the remaining two quarters represent the remaining portion of annual sales. </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Crown Luxe, Inc., a wholly-owned subsidiary, was incorporated in the State of Delaware on March 5, 2014, to operate the Company&#146;s first retail store which was opened in Bergen County, New Jersey in the fourth quarter of 2014. It is our intent to provide another area for growth by establishing a retail outlet for the Company&#146;s products. </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>On June 1, 2015, the Company acquired a 51% interest in R.S. Fisher, Inc., a Delaware corporation (&#147;R.S. Fisher&#148;), in exchange for funding the company&#146;s operations.&#160; The minority shareholder contributed jewelry molds and inventory valued at $349,292.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position of the Company as of June 30, 2016, the results of operations for the three and six months ended June 30, 2016 and 2015, and statements of cash flows for the six months ended June 30, 2016 and 2015.&#160; These results are not necessarily indicative of the results to be expected for the full year.&#160; The financial statements have been prepared in accordance with the requirements of Form 10-Q and consequently do not include disclosures normally made in an Annual Report on Form 10-K.&#160; The December 31, 2015 balance sheet included herein was derived from the audited financial statements included in the Company&#146;s Annual Report on Form 10-K as of that date.&#160; Accordingly, the financial statements included herein should be reviewed in conjunction with the financial statements and notes thereto included in the Company&#146;s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, as filed with the Securities and Exchange Commission (&#147;SEC&#148;) on March 30, 2016 (the &#147;Annual Report&#148;).</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><b><u>Note 2 - Summary of Significant Accounting Policies</u></b></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><b>Principles of Consolidation</b></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, and include the Company and its wholly-owned subsidiary. All significant inter-company accounts and transactions have been eliminated.</p> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left;text-autospace:none'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>During the six months ended June 30, 2016, there have been no other material changes in the Company&#146;s significant accounting policies to those previously disclosed in the Company&#146;s Annual Report.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The Company evaluated subsequent events, which are events or transactions that occurred after June 30, 2016 through the issuance of the accompanying financial statements.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;background:white'><u>Non-controlling Interest</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Non-controlling interest represents third party ownership in the net assets of our consolidated subsidiaries. For financial reporting purposes, the assets and liabilities of our majority owned subsidiaries are consolidated with those of our own, with any third party investor&#146;s interest shown as non-controlling interest.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>On June 1, 2015, the Company acquired a 51% interest in R.S. Fisher, in exchange for funding the company&#146;s operations.&#160; The minority holder contributed jewelry molds and inventory valued at $349,292.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><b><u>Note 3 - Income (Loss) per Share</u></b></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Basic earnings per share includes no dilution and is computed by dividing earnings available to common stockholders by the weighted average number of common shares outstanding for the period. Dilutive earnings per share reflect the potential dilution of securities that could occur through the effect of common shares issuable upon the exercise of stock options, warrants and convertible securities.&#160; Basic net loss per share equaled the diluted loss per share for the three and six months ended June 30, 2015, since the effect of shares potentially issuable upon the exercise or conversion was anti-dilutive. Equity instruments that may dilute earnings per share in the future are listed in Note 6 below. For the three months and six months ended June 30, 2015 issuable upon the conversion of convertible debt were not included in the computation of diluted net loss because their inclusion would be anti-dilutive</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>The following table sets forth the computation of earnings per share:</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" width="100%" style='border-collapse:collapse'> <tr align="left"> <td width="202" valign="bottom" style='width:151.25pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>&nbsp;</p> </td> <td width="222" colspan="5" valign="bottom" style='width:166.45pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'><b>Three Months Ended</b></p> </td> <td width="8" valign="bottom" style='width:6.0pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>&nbsp;</p> </td> <td width="179" colspan="5" valign="bottom" style='width:134.25pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'><b>Six Months Ended</b></p> </td> </tr> <tr align="left"> <td width="202" valign="bottom" style='width:151.25pt;padding:0in 0in 1.5pt 0in'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0in 0in 1.5pt 0in'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>&nbsp;</p> </td> <td width="110" colspan="2" valign="bottom" style='width:1.15in;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'><b>June 30, 2016</b></p> </td> <td width="11" valign="bottom" style='width:8.25pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>&nbsp;</p> </td> <td width="101" colspan="2" valign="bottom" style='width:75.4pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'><b>June 30, 2015</b></p> </td> <td width="8" valign="bottom" style='width:6.0pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>&nbsp;</p> </td> <td width="82" colspan="2" valign="bottom" style='width:61.75pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'><b>June 30, 2016</b></p> </td> <td width="11" valign="bottom" style='width:8.15pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>&nbsp;</p> </td> <td width="86" colspan="2" valign="bottom" style='width:64.35pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'><b>June 30, 2015</b></p> </td> </tr> <tr align="left"> <td width="202" valign="top" style='width:151.25pt;padding:0'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'><b>Basic net income (loss) per share computation:</b></p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="110" colspan="2" valign="bottom" style='width:1.15in;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="11" valign="bottom" style='width:8.25pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="101" colspan="2" valign="bottom" style='width:75.4pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="8" valign="bottom" style='width:6.0pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="82" colspan="2" valign="bottom" style='width:61.75pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="11" valign="bottom" style='width:8.15pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="86" colspan="2" valign="bottom" style='width:64.35pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> </tr> <tr align="left"> <td width="202" valign="top" style='width:151.25pt;background:#DBE5F1;padding:0'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>&#160; Net income (loss)</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="11" valign="bottom" style='width:8.25pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="99" valign="bottom" style='width:74.55pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>180,564</p> </td> <td width="11" valign="bottom" style='width:8.25pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="87" valign="bottom" style='width:65.35pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>(741,628)</p> </td> <td width="8" valign="bottom" style='width:6.0pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="12" valign="bottom" style='width:9.3pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="70" valign="bottom" style='width:52.45pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>91,471</p> </td> <td width="11" valign="bottom" style='width:8.15pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="72" valign="bottom" style='width:54.3pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>(744,250)</p> </td> </tr> <tr align="left"> <td width="202" valign="top" style='width:151.25pt;padding:0'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>&#160; Weighted-average common shares outstanding</p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="11" valign="bottom" style='width:8.25pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="99" valign="bottom" style='width:74.55pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>117,791,761</p> </td> <td width="11" valign="bottom" style='width:8.25pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="87" valign="bottom" style='width:65.35pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>10,372,074</p> </td> <td width="8" valign="bottom" style='width:6.0pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="12" valign="bottom" style='width:9.3pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="70" valign="bottom" style='width:52.45pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>100,931,600</p> </td> <td width="11" valign="bottom" style='width:8.15pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="72" valign="bottom" style='width:54.3pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>9,326,768</p> </td> </tr> <tr align="left"> <td width="202" valign="top" style='width:151.25pt;background:#DBE5F1;padding:0'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>&#160; Basic net income (loss) per share</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="11" valign="bottom" style='width:8.25pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="99" valign="bottom" style='width:74.55pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>0.00</p> </td> <td width="11" valign="bottom" style='width:8.25pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="87" valign="bottom" style='width:65.35pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>(0.07)</p> </td> <td width="8" valign="bottom" style='width:6.0pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="12" valign="bottom" style='width:9.3pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="70" valign="bottom" style='width:52.45pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>0.00</p> </td> <td width="11" valign="bottom" style='width:8.15pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="72" valign="bottom" style='width:54.3pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>(0.08)</p> </td> </tr> <tr align="left"> <td width="202" valign="top" style='width:151.25pt;padding:0'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'><b>Diluted net income (loss) per share computation:</b></p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="11" valign="bottom" style='width:8.25pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="99" valign="bottom" style='width:74.55pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="11" valign="bottom" style='width:8.25pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="87" valign="bottom" style='width:65.35pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="8" valign="bottom" style='width:6.0pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="12" valign="bottom" style='width:9.3pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="70" valign="bottom" style='width:52.45pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="11" valign="bottom" style='width:8.15pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="72" valign="bottom" style='width:54.3pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> </tr> <tr align="left"> <td width="202" valign="top" style='width:151.25pt;background:#DBE5F1;padding:0'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>&#160; Net income (loss)</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="11" valign="bottom" style='width:8.25pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="99" valign="bottom" style='width:74.55pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>180,564</p> </td> <td width="11" valign="bottom" style='width:8.25pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="87" valign="bottom" style='width:65.35pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>(741,628)</p> </td> <td width="8" valign="bottom" style='width:6.0pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="12" valign="bottom" style='width:9.3pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="70" valign="bottom" style='width:52.45pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>91,471</p> </td> <td width="11" valign="bottom" style='width:8.15pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="72" valign="bottom" style='width:54.3pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>(744,250)</p> </td> </tr> <tr align="left"> <td width="202" valign="top" style='width:151.25pt;padding:0'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>&#160; Weighted-average common shares outstanding</p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="11" valign="bottom" style='width:8.25pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="99" valign="bottom" style='width:74.55pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>117,791,761</p> </td> <td width="11" valign="bottom" style='width:8.25pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="87" valign="bottom" style='width:65.35pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>10,372,074</p> </td> <td width="8" valign="bottom" style='width:6.0pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="12" valign="bottom" style='width:9.3pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="70" valign="bottom" style='width:52.45pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>100,931,600</p> </td> <td width="11" valign="bottom" style='width:8.15pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="72" valign="bottom" style='width:54.3pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>9,326,768</p> </td> </tr> <tr align="left"> <td width="202" valign="top" style='width:151.25pt;background:#DBE5F1;padding:0'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>&#160; Incremental shares attributable to the shares&#160; issuable upon conversion of convertible debt</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="11" valign="bottom" style='width:8.25pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="99" valign="bottom" style='width:74.55pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>756,647,080</p> </td> <td width="11" valign="bottom" style='width:8.25pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="87" valign="bottom" style='width:65.35pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>--</p> </td> <td width="8" valign="bottom" style='width:6.0pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="12" valign="bottom" style='width:9.3pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="70" valign="bottom" style='width:52.45pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>756,647,080</p> </td> <td width="11" valign="bottom" style='width:8.15pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="72" valign="bottom" style='width:54.3pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>--</p> </td> </tr> <tr align="left"> <td width="202" valign="top" style='width:151.25pt;padding:0'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>Total adjusted weighted-average shares</p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="11" valign="bottom" style='width:8.25pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="99" valign="bottom" style='width:74.55pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>874,438,841</p> </td> <td width="11" valign="bottom" style='width:8.25pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="87" valign="bottom" style='width:65.35pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>10,372,074</p> </td> <td width="8" valign="bottom" style='width:6.0pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="12" valign="bottom" style='width:9.3pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="70" valign="bottom" style='width:52.45pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>857,578,680</p> </td> <td width="11" valign="bottom" style='width:8.15pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="72" valign="bottom" style='width:54.3pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>9,326,768</p> </td> </tr> <tr align="left"> <td width="202" valign="top" style='width:151.25pt;background:#DBE5F1;padding:0'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>Diluted net income (loss) per share</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="11" valign="bottom" style='width:8.25pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="99" valign="bottom" style='width:74.55pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>0.00</p> </td> <td width="11" valign="bottom" style='width:8.25pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="87" valign="bottom" style='width:65.35pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>(0.07)</p> </td> <td width="8" valign="bottom" style='width:6.0pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="12" valign="bottom" style='width:9.3pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="70" valign="bottom" style='width:52.45pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>0.00</p> </td> <td width="11" valign="bottom" style='width:8.15pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="72" valign="bottom" style='width:54.3pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>(0.08)</p> </td> </tr> </table> </div> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><b><u>4 - New Authoritative Accounting Guidance</u></b></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>In June 2016, the Financial Accounting Standards Board (&quot;FASB&quot;) issued Accounting Standards Update (&quot;ASU&quot;) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new standard requires financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The standard will be effective for the Company beginning January 1, 2020, with early application permitted. We are evaluating the impact that the adoption of this standard will have on our consolidated financial statements.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>In March 2016, the FASB issued ASU 2016-09 (&quot;Improvements to Employee Share-Based Payment Accounting&quot;) which simplifies several aspects of accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new standard is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years with early adoption permitted. We are evaluating the impact that the adoption of this standard will have on our consolidated financial statements.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>In February 2016, the FASB issued ASU 2016-02 (&quot;Leases&quot;), which introduces the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The new standard establishes a right-of-use (&quot;ROU&quot;) model that requires a lessee to record an ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. The new standard is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years with early adoption permitted. We are evaluating the impact that the adoption of this standard will have on our consolidated financial statements.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>In January 2016, the FASB issued ASU No. 2016-01 (ASC Subtopic 825-10), Financial Instruments- Overall Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this ASU require entities to measure all investments in equity securities at fair value with changes recognized through net income. This requirement does not apply to investments that qualify for the equity method of accounting, to those that result in consolidation of the investee, or for which the entity meets a practicability exception to fair value measurement. Additionally, the amendments eliminate certain disclosure requirements related to financial instruments measured at amortized cost and add disclosures related to the measurement categories of financial assets and financial liabilities. The amendments in this ASU are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted for only certain portions of the ASU. The Company is in the process of assessing the impact, if any, on its consolidated financial statements.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>In November 2015, the FASB issued ASU 2015-17 (ASC Topic 740), Income Taxes Balance Sheet Classification of Deferred Taxes. The amendments in this update are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted by all entities as of the beginning of an interim or annual reporting period. The Company is in the process of assessing the impact, if any, on its consolidated financial statements.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>In September 2015, the FASB issued ASU 2015-16 (ASC Topic 805), Business Combinations Simplifying the Accounting for Measurement-Period Adjustments. The amendments in this update require that an acquirer recognize measurement period adjustments in the period in which the adjustments are determined. The income effects of such measurement period adjustments are to be recorded in the same period&#146;s financial statements but calculated as if the accounting had been completed as of the acquisition date. The impact of measurement period adjustments to earnings that relate to prior period financial statements are to be presented separately on the income statement or disclosed by line item. The amendments in this update are for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted for public business entities for reporting periods for which financial statements have not yet been issued. The adoption of this new guidance is not expected to have a material impact on the Company&#146;s consolidated financial statements and disclosures.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs with Line-of-Credit Arrangements (ASU 2015-15). The previous guidance in ASU 2015-03, as defined below, did not address the presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. Given the absence of authoritative guidance within ASU 2015-03, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. ASU 2015-15 is effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted and entities shall apply the guidance retrospectively to all prior year periods presented. The Company is in the process of assessing the effects of the application of the new guidance.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs (&#147;ASU 2015-03&#148;). To simplify presentation of debt issuance costs, ASU 2015-03 requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. ASU 2015-03 is effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted and entities shall apply the guidance retrospectively to all prior year periods presented. The Company is in the process of assessing the effects of the application of the new guidance.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>In May 2014, the FASB issued ASU 2014-09 that introduces a new five-step revenue recognition model in which an entity should 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. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. This standard is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. The Company is currently evaluating the new guidance to determine the impact, if any, it will have on its consolidated financial statements.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>In August 2014, the FASB issued ASU 2014-15, &#147;Presentation of Financial Statements - Going Concern&#148;, which requires management to evaluate whether conditions or events raise substantial doubt about the entity&#146;s ability to continue as a going concern and, if so, to provide related footnote disclosures. The guidance is effective for annual or interim reporting periods beginning on or after December 15, 2016. Early adoption is permitted. The Company does not expect the adoption of this ASU to have a material impact on the Company&#146;s consolidated Financial Statements.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>In July 2015, the FASB issued ASU 2015-11, &#147;Simplifying the Measurement of Inventory&#148;. This ASU applies to inventory that is measured using first-in, first-out (&#147;FIFO&#148;) or average cost. Under the updated guidance, an entity should measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predicable costs of completion, disposal and transportation. Subsequent measurement is unchanged for inventory that is measured using last-in, last-out (&#147;LILO&#148;). This ASU is effective for annual and interim periods beginning after December 15, 2016, and should be applied prospectively with early adoption permitted at the beginning of an interim and annual reporting period. We are currently evaluating the impact of adopting ASU 2015-11 on our consolidated financial statements and related disclosures.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>No other recently issued accounting pronouncements had or are expected to have a material impact on the Company&#146;s condensed consolidated financial statements.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><b><u>Note 5 - Bank Lines of Credit</u></b></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>A summary of the Company&#146;s credit facilities is as follows:</p> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>&nbsp;</p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" width="99%" style='border-collapse:collapse'> <tr align="left"> <td width="372" valign="top" style='width:279.1pt;padding:0in 0in 1.5pt 0in'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>&nbsp;</p> </td> <td width="102" colspan="2" valign="bottom" style='width:76.15pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'><b>June 30,</b></p> </td> <td width="26" valign="bottom" style='width:19.6pt;padding:0in 0in 1.5pt 0in'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>&nbsp;</p> </td> <td width="118" colspan="2" valign="bottom" style='width:88.45pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'><b>December 31,</b></p> </td> </tr> <tr align="left"> <td width="372" valign="top" style='width:279.1pt;padding:0in 0in 1.5pt 0in'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>&nbsp;</p> </td> <td width="102" colspan="2" valign="bottom" style='width:76.15pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'><b>2016</b></p> </td> <td width="26" valign="bottom" style='width:19.6pt;padding:0in 0in 1.5pt 0in'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>&nbsp;</p> </td> <td width="118" colspan="2" valign="bottom" style='width:88.45pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'><b>2015</b></p> </td> </tr> <tr align="left"> <td width="372" valign="top" style='width:279.1pt;background:#DBE5F1;padding:0'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>Various unsecured Credit Cards, minimum payment of principal and interest are due monthly at the credit card&#146;s annual interest rate. June 30, 2016 and December 31, 2015, the interest rates ranged from 3.99% to 52.9%.</p> </td> <td width="10" valign="bottom" style='width:7.3pt;border:none;border-bottom:solid windowtext 1.0pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="92" valign="bottom" style='width:68.85pt;border:none;border-bottom:solid windowtext 1.0pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>348,247</p> </td> <td width="26" valign="bottom" style='width:19.6pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="17" valign="bottom" style='width:12.6pt;border:none;border-bottom:solid windowtext 1.0pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="101" valign="bottom" style='width:75.85pt;border:none;border-bottom:solid windowtext 1.0pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>340,622</p> </td> </tr> <tr align="left"> <td width="372" valign="top" style='width:279.1pt;padding:0in 0in 3.0pt 0in'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>Current maturities included in current liabilities</p> </td> <td width="10" valign="bottom" style='width:7.3pt;border:none;border-bottom:double black 2.25pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="92" valign="bottom" style='width:68.85pt;border:none;border-bottom:double black 2.25pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>348,247</p> </td> <td width="26" valign="bottom" style='width:19.6pt;padding:0in 0in 3.0pt 0in'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="17" valign="bottom" style='width:12.6pt;border:none;border-bottom:double black 2.25pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="101" valign="bottom" style='width:75.85pt;border:none;border-bottom:double black 2.25pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>340,622</p> </td> </tr> </table> </div> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>&nbsp;</p> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>The Company&#146;s CEO also serves as a guarantor of the Company&#146;s debt.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><b><u>Note 6 - Convertible Debt</u></b></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><u>Fife, Typenex and Iliad</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>In December 2012, the Company entered into a $325,000 convertible note with Fife consisting of three tranches to be drawn down with the first tranche totaling $125,000, including $25,000 in loan costs and an additional two tranches totaling $200,000. The note bears a 5% annual interest rate and matures eighteen months from the date of issuance. The note is convertible into common shares of the Company based on 70% of the average of the three lowest closing prices of the common stock for the proceeding 15 consecutive trading days immediately prior to the conversion. During 2013, the conversion price was fixed at $0.005 per share. As of December 31, 2012, the Company only drew down the first tranche totaling $125,000. On February 11, 2013, April 5, 2013, April 23, 2013, and July 1, 2013, the Company drew down an additional $250,000.&#160; </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>On June 5, 2014, the Company, Fife, Typenex and Iliad Research and Trading, LLP (&#147;Iliad&#148;) entered into an Assignment and Assumption Agreement and Note Purchase Agreement (the &#147;Note Purchase Agreement&#148;) whereby Iliad acquired all of Fife&#146;s and Typenex&#146;s right, title, obligations and interest in, to and arising under the Company Notes (as defined in the Note Purchase Agreement) and the Note Purchase Documents (as defined in the Note Purchase Agreement). </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>On October 17, 2014, the Company entered into a financing arrangement with Iliad to provide additional financing in the amount of up to $450,000 through the issuance of a Secured Convertible Promissory Note (the &#147;Note&#148;). The Company agreed to cover Iliad&#146;s legal, accounting and other related fees in the amount of $5,000, which is included in the principal balance of the Note. The Note will accrue interest at the rate of 8% per annum until the Note is paid in full. Monies are to be drawn in eight tranches with the initial tranche in the amount of $105,000, and the remaining balance of $350,000 in 7 tranches of $50,000 each. The Company drew down the initial tranche on October 17, 2014. The Note has a maturity date of July 17, 2016. The Company is currently negotiating with the lender (see below).</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Beginning six months after October 17, 2014 and on the same day each month thereafter, the Company shall make an installment payment, based upon the unpaid balance. At the option of the Company, payments may be made in cash or by converting the installment amount into shares of the Company&#146;s common stock. The conversion price is equal to the lesser of (i) $0.0005 per share and (ii) 67.5% of the average of the three lowest closing bid prices in the 15 trading days immediately preceding the conversion. The Company has the right to prepay the Note at 135% of the outstanding balance at the time of prepayment. There were no conversions during the six months ended June 30, 2016. The outstanding balance at June 30, 2016 and December 31, 2015 was $100,000, respectively, with accrued interest of $13,158 and $10,630 at June 30, 2016 and December 31, 2015, respectively.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>During the year ended December 31, 2014, the Company drew down an additional $314,703. There were no conversions during the six months ended June 30, 2016. The outstanding balances at June 30, 2016 and December 31, 2015 were $328,470 and $328,470, respectively, with accrued interest of $19,290 and $11,005 at June 30, 2016 and December 31, 2015, respectively.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>During the three months ended June 30, 2016, the Company made a retail sale to a customer in the amount of $497,600. This customer holds convertible debt which the Company is obligated to pay them in the amount of approximately $428,000. The Company is currently negotiating an agreement with this customer to offset the convertible debt against the accounts receivable. </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><u>Third Party Note</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>In November 2014, the Company converted a portion of its outstanding accounts payable for legal services to a third party into two convertible promissory notes in the aggregate amount of $63,275. These are demand notes and accrue interest at the rate of 10% on the outstanding balance.&#160; The notes are convertible into shares of the Company&#146;s common stock based on 65% of the average ten trading days closing bid price during the preceding ten consecutive trading days immediately prior to the conversion. During the six months ended June 30, 2016, principal of $9,159 was converted into 67,852,048 shares of common stock. The outstanding balances at June 30, 2016 and December 31, 2015 were $39,974 and $49,133, respectively, with accrued interest of $6,442 and $4,249 at June 30, 2016 and December 31, 2015, respectively.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>On April 7, 2015, the convertible promissory notes and accrued interest was assigned to Carebourn Capital L.P. (&#147;Carebourn Capital&#148;). All terms and conditions remained the same, except that notes are convertible into shares of the Company&#146;s common stock equal to 50% of the average ten trading days closing bid price during the preceding ten consecutive trading days immediately prior to the conversion.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><u>KBM Worldwide</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>On February 4, 2015, the Company entered into an 8% convertible note in the amount of $54,000 with KBM Worldwide, Inc. (&#147;KBM Worldwide&#148;). The principal and accrued interest is payable on or before November 6, 2015. At the option of the Company, but not before six months from the date of issuance, the holder may elect to convert all or part of such note into the Company&#146;s common stock. The note is convertible into shares of the Company&#146;s common stock at a price of 60% of the average of the three lowest trading prices during the 10 days prior to the date of conversion or $0.00009, whichever is greater. There were no conversions during the six months ended June 30, 2016. The outstanding balance at June 30, 2016 and December 31, 2015 was $41,260 with accrued interest of $5,253 and $3,584 at June 30, 2016 and December 31, 2015, respectively.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><u>Vis Vires Group, Inc.</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>On March 11, 2015, the Company entered into an 8% convertible note in the amount of $38,000 with Vis Vires Group, Inc.&#160; (&#147;Vis Vires&#148;). The principal and accrued interest is payable on or before November 6, 2015. At the option of the Company, but not before six months from the date of issuance, the holder may elect to convert all or part of the convertible into the Company&#146;s common stock. The note is convertible into shares of the Company&#146;s common stock at a price equal to 60% of the average of the three lowest trading prices during the 10 days prior to the date of conversion or $0.00009, whichever is greater. There were no conversions during the six months ended June 30, 2016. The outstanding balance at June 30, 2016 and December 31, 2015 was $38,000 with accrued interest of $4,028 and $3,584 at June 30, 2016 and December 31, 2015, respectively.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>On April 30, 2015, the Company entered into an 8% convertible note in the amount of $33,000 with Vis Vires. The principal and accrued interest is payable on or before November 6, 2015. At the option of the Company, but not before six months from the date of issuance, the holder may elect to convert all or part of the convertible into the Company&#146;s common stock. The note is convertible into shares of the Company&#146;s common stock at a price equal to 60% of the average of the three lowest trading prices during the 10 days prior to the date of conversion or $0.00009, whichever is greater. There were no conversions during the six months ended June 30, 2016. The outstanding balance at March 31, 2016 and December 31, 2015 was $33,000 with accrued interest of $3,029 and $1,695 at June 30, 2016 and December 31, 2015, respectively.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><u>LG Capital Funding, LLC</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>On May 4, 2015, the Company entered into an 8% convertible note in the amount of $36,750 with LG Capital Funding, LLC (&#147;LG Capital&#148;). The principal and accrued interest is payable on or before May 4, 2016. The holder, at its option, may elect to convert all or part ofsuch note the Company&#146;s common stock at a price equal to 60% of the lowest trading prices during the 20 days prior to the date of conversion. During the six months ended June 30, 2016, principal of $753 and interest of $68 was converted into 6,844,416 shares of common stock. The outstanding balances at June 30, 2016 and December 31, 2015 were $35,687 and $36,440, respectively, with accrued interest of $3,442 and $1,968 at June 30, 2016 and December 31, 2015, respectively.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><u>JMJ Financial</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>On April 15 2015, the Company entered into a $250,000 convertible note with JMJ Financial. The consideration was $225,000 and $25,000 original issue discount.&#160; The principal and accrued interest is payable on or before May 4, 2016. On April 15, 2015, the Company borrowed $25,000 of this amount. The holder, at its option, may elect to convert all or part of the convertible into the Company&#146;s common stock at a price equal to the lesser of $0.018 per share or 60% of the lowest trading price during the 25 days prior to the date of conversion. There were no conversions during the six months ended June 30, 2016. The outstanding balance at June 30, 2016 and December 31, 2015 was $27,778 with accrued interest of $2,625 and $1,501 at June 30, 2016 and December 31, 2015, respectively.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>As of June 30, 2016 and December 31, 2015, total convertible debt was $642,204 and $644,592, respectively, net of debt discount of $1,965 and $9,489, respectively.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><b><u>Note 7 - Derivative Liability</u></b></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>The Company accounts for the fair value of the conversion features of its convertible debt in accordance with ASC Topic No. 815-15 &#147;Derivatives and Hedging; Embedded Derivatives&#148; (&#147;Topic No. 815-15&#148;). Topic No. 815-15 requires the Company to bifurcate and separately account for the conversion features as an embedded derivative contained in the Company&#146;s convertible debt. The Company is required to carry the embedded derivative on its balance sheet at fair value and account for any unrealized change in fair value as a component of results of operations. The Company values the embedded derivatives using the Black-Scholes pricing model. Amortization of debt discount amounted to $3,762 and $7,524 for the three and six months ended June 30, 2016, respectively, as compared to $24,719 and $40,538 for the three and six months ended June 30, 2015, respectively. The derivative liability is revalued each reporting period using the Black-Scholes model. As of June 30, 2016 and December 31, 2015, the derivative liability was $114,619 and $189,019, respectively.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>The Black-Scholes model utilized the following inputs to value the derivative liability at the date of issuance of the convertible note at March 31, 2016:</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><b><i>Stock Price</i></b> - The stock price was based closing price of the Company&#146;s stock as of the valuation date, which was $0.0002 at June 30, 2016.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><b><i>Variable Conversion Prices</i></b> - The conversion price was based on: (i) 50% of the average closing bid price during the preceding ten consecutive trading days immediately prior to the conversion at June 30, 2016 for Carebourn Capital; (ii) 60% of the lowest trading prices during the 20 days prior to the date of conversion at June 30,2016 for LG Capital; (iii)&#160; the lower of $0.018 per share or 60% of the lowest trading price during the 25 days prior to the date of conversion at June 30, 2016 for JMJ Financial.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><b><i>Time to Maturity</i></b> - The time to maturity was determined based on the length of time between the valuation date and the maturity of the debt. Time to maturity ranged from 34 to 289 days at June 30, 2016.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><b><i>Risk Free Rate</i></b> - The risk free rate was based on the Treasury Note rate as of the valuation dates with a term commensurate with the remaining term of the debt. The risk free rate at June 30, 2016 ranged from 0.20% to 0.45%, based on the term of the note.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><b><i>Volatility</i></b> - The volatility was based on the historical volatility of the Company. The average volatility was 415.12% at June 30, 2016.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><b><u>Note 8 - Related Party Transactions</u></b></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>The Company receives periodic advances from its principal executive officer based upon the Company&#146;s cash flow needs. At June 30, 2016 and December 31, 2015, $267,642 and $253,073, respectively, was due to the principal executive officer, including accrued interest.&#160; Interest expense is accrued at an average annual market rate of interest which was 3.15% at June 30, 2016 and December 31, 2015, respectively.&#160; Interest expense associated with this loan was $4,101 and $8,106 for the three and six months ended June 30, 2016 as compared to $1,453 and $3,038 for the three and six months ended June 30, 2015, respectively. No terms for repayment have been established. As a result, the amount is classified as a Current Liability.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Effective September 1, 2011, the Company and CEO entered into an Amended and Restated Employment Agreement (the &#147;Amended Agreement&#148;) which primarily retains the term and compensation of the original agreement. The Amended Agreement, however, removes the section which previously provided for the issuance of Company common stock to the CEO, from time to time, when the Company is unable to pay the CEO the full amount of his Base Salary (as defined in the Amended Agreement) which would allow the CEO to maintain a fifty-one percent (51%) share of the Company&#146;s outstanding common stock.&#160; However, the CEO does have the right to request all or a portion of his unpaid Base Salary be paid with the Company&#146;s restricted common stock. In addition, the Amended Agreement provides for the issuance of 51 shares of newly authorized Series A Preferred Stock to be issued to the CEO. As defined in the Certificate of Designations, Preferences and Rights of the Series A Preferred Stock, each share of Series A Preferred Stock has voting rights such that the holder of 51 shares of Series A Preferred Stock will effectively maintain majority voting control of the Company. Effective November 3, 2011, the CEO notified the Company that for the one year period, retroactive from April 1, 2011, through December 31, 2012, he would reduce his Base Salary to $100,000. The reduction in base compensation was subsequently extended to December 31, 2013. The CEO is currently deferring a portion of his salary to conserve cash. Deferred wages due to the CEO amounted to $366,809 and $280,659 for the periods ended June 30, 2016 and December 31, 2015, respectively.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>The Company is in process of extending this agreement.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><b><u>Note 9 - Litigation</u></b></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries&#146; officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><b>Principles of Consolidation</b></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, and include the Company and its wholly-owned subsidiary. All significant inter-company accounts and transactions have been eliminated.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" width="100%" style='border-collapse:collapse'> <tr align="left"> <td width="202" valign="bottom" style='width:151.25pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>&nbsp;</p> </td> <td width="222" colspan="5" valign="bottom" style='width:166.45pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'><b>Three Months Ended</b></p> </td> <td width="8" valign="bottom" style='width:6.0pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>&nbsp;</p> </td> <td width="179" colspan="5" valign="bottom" style='width:134.25pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'><b>Six Months Ended</b></p> </td> </tr> <tr align="left"> <td width="202" valign="bottom" style='width:151.25pt;padding:0in 0in 1.5pt 0in'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0in 0in 1.5pt 0in'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>&nbsp;</p> </td> <td width="110" colspan="2" valign="bottom" style='width:1.15in;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'><b>June 30, 2016</b></p> </td> <td width="11" valign="bottom" style='width:8.25pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>&nbsp;</p> </td> <td width="101" colspan="2" valign="bottom" style='width:75.4pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'><b>June 30, 2015</b></p> </td> <td width="8" valign="bottom" style='width:6.0pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>&nbsp;</p> </td> <td width="82" colspan="2" valign="bottom" style='width:61.75pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'><b>June 30, 2016</b></p> </td> <td width="11" valign="bottom" style='width:8.15pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>&nbsp;</p> </td> <td width="86" colspan="2" valign="bottom" style='width:64.35pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'><b>June 30, 2015</b></p> </td> </tr> <tr align="left"> <td width="202" valign="top" style='width:151.25pt;padding:0'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'><b>Basic net income (loss) per share computation:</b></p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="110" colspan="2" valign="bottom" style='width:1.15in;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="11" valign="bottom" style='width:8.25pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="101" colspan="2" valign="bottom" style='width:75.4pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="8" valign="bottom" style='width:6.0pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="82" colspan="2" valign="bottom" style='width:61.75pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="11" valign="bottom" style='width:8.15pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="86" colspan="2" valign="bottom" style='width:64.35pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> </tr> <tr align="left"> <td width="202" valign="top" style='width:151.25pt;background:#DBE5F1;padding:0'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>&#160; Net income (loss)</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="11" valign="bottom" style='width:8.25pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="99" valign="bottom" style='width:74.55pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>180,564</p> </td> <td width="11" valign="bottom" style='width:8.25pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="87" valign="bottom" style='width:65.35pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>(741,628)</p> </td> <td width="8" valign="bottom" style='width:6.0pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="12" valign="bottom" style='width:9.3pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="70" valign="bottom" style='width:52.45pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>91,471</p> </td> <td width="11" valign="bottom" style='width:8.15pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="72" valign="bottom" style='width:54.3pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>(744,250)</p> </td> </tr> <tr align="left"> <td width="202" valign="top" style='width:151.25pt;padding:0'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>&#160; Weighted-average common shares outstanding</p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="11" valign="bottom" style='width:8.25pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="99" valign="bottom" style='width:74.55pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>117,791,761</p> </td> <td width="11" valign="bottom" style='width:8.25pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="87" valign="bottom" style='width:65.35pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>10,372,074</p> </td> <td width="8" valign="bottom" style='width:6.0pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="12" valign="bottom" style='width:9.3pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="70" valign="bottom" style='width:52.45pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>100,931,600</p> </td> <td width="11" valign="bottom" style='width:8.15pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="72" valign="bottom" style='width:54.3pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>9,326,768</p> </td> </tr> <tr align="left"> <td width="202" valign="top" style='width:151.25pt;background:#DBE5F1;padding:0'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>&#160; Basic net income (loss) per share</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="11" valign="bottom" style='width:8.25pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="99" valign="bottom" style='width:74.55pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>0.00</p> </td> <td width="11" valign="bottom" style='width:8.25pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="87" valign="bottom" style='width:65.35pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>(0.07)</p> </td> <td width="8" valign="bottom" style='width:6.0pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="12" valign="bottom" style='width:9.3pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="70" valign="bottom" style='width:52.45pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>0.00</p> </td> <td width="11" valign="bottom" style='width:8.15pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="72" valign="bottom" style='width:54.3pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>(0.08)</p> </td> </tr> <tr align="left"> <td width="202" valign="top" style='width:151.25pt;padding:0'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'><b>Diluted net income (loss) per share computation:</b></p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="11" valign="bottom" style='width:8.25pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="99" valign="bottom" style='width:74.55pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="11" valign="bottom" style='width:8.25pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="87" valign="bottom" style='width:65.35pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="8" valign="bottom" style='width:6.0pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="12" valign="bottom" style='width:9.3pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="70" valign="bottom" style='width:52.45pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="11" valign="bottom" style='width:8.15pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="72" valign="bottom" style='width:54.3pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> </tr> <tr align="left"> <td width="202" valign="top" style='width:151.25pt;background:#DBE5F1;padding:0'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>&#160; Net income (loss)</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="11" valign="bottom" style='width:8.25pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="99" valign="bottom" style='width:74.55pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>180,564</p> </td> <td width="11" valign="bottom" style='width:8.25pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="87" valign="bottom" style='width:65.35pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>(741,628)</p> </td> <td width="8" valign="bottom" style='width:6.0pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="12" valign="bottom" style='width:9.3pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="70" valign="bottom" style='width:52.45pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>91,471</p> </td> <td width="11" valign="bottom" style='width:8.15pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="72" valign="bottom" style='width:54.3pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>(744,250)</p> </td> </tr> <tr align="left"> <td width="202" valign="top" style='width:151.25pt;padding:0'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>&#160; Weighted-average common shares outstanding</p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="11" valign="bottom" style='width:8.25pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="99" valign="bottom" style='width:74.55pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>117,791,761</p> </td> <td width="11" valign="bottom" style='width:8.25pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="87" valign="bottom" style='width:65.35pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>10,372,074</p> </td> <td width="8" valign="bottom" style='width:6.0pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="12" valign="bottom" style='width:9.3pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="70" valign="bottom" style='width:52.45pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>100,931,600</p> </td> <td width="11" valign="bottom" style='width:8.15pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="72" valign="bottom" style='width:54.3pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>9,326,768</p> </td> </tr> <tr align="left"> <td width="202" valign="top" style='width:151.25pt;background:#DBE5F1;padding:0'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>&#160; Incremental shares attributable to the shares&#160; issuable upon conversion of convertible debt</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="11" valign="bottom" style='width:8.25pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="99" valign="bottom" style='width:74.55pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>756,647,080</p> </td> <td width="11" valign="bottom" style='width:8.25pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="87" valign="bottom" style='width:65.35pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>--</p> </td> <td width="8" valign="bottom" style='width:6.0pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="12" valign="bottom" style='width:9.3pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="70" valign="bottom" style='width:52.45pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>756,647,080</p> </td> <td width="11" valign="bottom" style='width:8.15pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="72" valign="bottom" style='width:54.3pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>--</p> </td> </tr> <tr align="left"> <td width="202" valign="top" style='width:151.25pt;padding:0'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>Total adjusted weighted-average shares</p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="11" valign="bottom" style='width:8.25pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="99" valign="bottom" style='width:74.55pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>874,438,841</p> </td> <td width="11" valign="bottom" style='width:8.25pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="87" valign="bottom" style='width:65.35pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>10,372,074</p> </td> <td width="8" valign="bottom" style='width:6.0pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="12" valign="bottom" style='width:9.3pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="70" valign="bottom" style='width:52.45pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>857,578,680</p> </td> <td width="11" valign="bottom" style='width:8.15pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="72" valign="bottom" style='width:54.3pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>9,326,768</p> </td> </tr> <tr align="left"> <td width="202" valign="top" style='width:151.25pt;background:#DBE5F1;padding:0'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>Diluted net income (loss) per share</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="11" valign="bottom" style='width:8.25pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="99" valign="bottom" style='width:74.55pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>0.00</p> </td> <td width="11" valign="bottom" style='width:8.25pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="87" valign="bottom" style='width:65.35pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>(0.07)</p> </td> <td width="8" valign="bottom" style='width:6.0pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="12" valign="bottom" style='width:9.3pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="70" valign="bottom" style='width:52.45pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>0.00</p> </td> <td width="11" valign="bottom" style='width:8.15pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="13" valign="bottom" style='width:10.05pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="72" valign="bottom" style='width:54.3pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>(0.08)</p> </td> </tr> </table> </div> <!--egx--><p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>&nbsp;</p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" width="99%" style='border-collapse:collapse'> <tr align="left"> <td width="372" valign="top" style='width:279.1pt;padding:0in 0in 1.5pt 0in'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>&nbsp;</p> </td> <td width="102" colspan="2" valign="bottom" style='width:76.15pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'><b>June 30,</b></p> </td> <td width="26" valign="bottom" style='width:19.6pt;padding:0in 0in 1.5pt 0in'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>&nbsp;</p> </td> <td width="118" colspan="2" valign="bottom" style='width:88.45pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'><b>December 31,</b></p> </td> </tr> <tr align="left"> <td width="372" valign="top" style='width:279.1pt;padding:0in 0in 1.5pt 0in'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>&nbsp;</p> </td> <td width="102" colspan="2" valign="bottom" style='width:76.15pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'><b>2016</b></p> </td> <td width="26" valign="bottom" style='width:19.6pt;padding:0in 0in 1.5pt 0in'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>&nbsp;</p> </td> <td width="118" colspan="2" valign="bottom" style='width:88.45pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'><b>2015</b></p> </td> </tr> <tr align="left"> <td width="372" valign="top" style='width:279.1pt;background:#DBE5F1;padding:0'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>Various unsecured Credit Cards, minimum payment of principal and interest are due monthly at the credit card&#146;s annual interest rate. June 30, 2016 and December 31, 2015, the interest rates ranged from 3.99% to 52.9%.</p> </td> <td width="10" valign="bottom" style='width:7.3pt;border:none;border-bottom:solid windowtext 1.0pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="92" valign="bottom" style='width:68.85pt;border:none;border-bottom:solid windowtext 1.0pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>348,247</p> </td> <td width="26" valign="bottom" style='width:19.6pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="17" valign="bottom" style='width:12.6pt;border:none;border-bottom:solid windowtext 1.0pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="101" valign="bottom" style='width:75.85pt;border:none;border-bottom:solid windowtext 1.0pt;background:#DBE5F1;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>340,622</p> </td> </tr> <tr align="left"> <td width="372" valign="top" style='width:279.1pt;padding:0in 0in 3.0pt 0in'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>Current maturities included in current liabilities</p> </td> <td width="10" valign="bottom" style='width:7.3pt;border:none;border-bottom:double black 2.25pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="92" valign="bottom" style='width:68.85pt;border:none;border-bottom:double black 2.25pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>348,247</p> </td> <td width="26" valign="bottom" style='width:19.6pt;padding:0in 0in 3.0pt 0in'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>&nbsp;</p> </td> <td width="17" valign="bottom" style='width:12.6pt;border:none;border-bottom:double black 2.25pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$</p> </td> <td width="101" valign="bottom" style='width:75.85pt;border:none;border-bottom:double black 2.25pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>340,622</p> </td> </tr> </table> </div> 1-for-1,000 reverse stock split 0.5100 349292 180564 -741628 91471 -744250 117791761 10372074 100931600 9326768 0.00 -0.07 0.00 -0.08 180564 -741628 91471 -744250 756647080 756647080 874438841 10372074 857578680 9326768 0.00 -0.07 0.00 -0.08 348247 340622 325000 450000 100000 10630 328470 328470 19290 11005 9159 67852048 39974 49133 6442 4249 41260 5253 3584 38000 4028 3584 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Convertible note Derivative Instrument [Axis] Incremental shares attributable to the assumed exercise of outstanding stock options and warrants Incremental shares attributable to the assumed exercise of outstanding stock options and warrants Net change in cash Advances from (payments to) stockholder, net Increase (decrease) in accounts payable and accrued liabilities Adjustments to reconcile net loss to net cash used in operating activities: Intrinsic value associated with convertible notes Statement [Line Items] Total long-term liabilities Total long-term liabilities Entity Registrant Name JMJ Financial Note Interest acquired in R.S Fisher, Inc. Policies Amortization of debt discount and deferred financing costs Statement [Table] Change in fair value of derivative Series A Preferred stock, par value Accounts payable and accrued liabilities Current Fiscal Year End Date Amount of debt converted into common stock Fife December 12, 2012 Note 21 Schedule of Earnings Per Share, Basic and Diluted Advances (repayments) of bank lines of credit, net Derivative expense {1} Derivative expense Interest expense associated with conversions Issuance of common stock for debt conversion, value Common stock, shares outstanding Current Liabilities: Entity Current Reporting Status Deferred wages due to the CEO Base salary, per year, CEO (reduced) Effective as of this date, the CEO notified the Company that for the one year period, retroactive from April 1, 2011, through December 31, 2012, he would reduce his Base Compensation to $100,000. Vis Vires Group Note March 11, 2015 Contributed value from acquisition received Cash paid for interest Acquisition of property and equipment Statement of Cash Flows Weighted average number of shares outstanding - basic Weighted average number of shares outstanding, basic Convertible debt, noncurrent Notes payable, noncurrent Accounts receivable - net Equity Component [Domain] Shares of common stock issued for debt conversion Tables/Schedules Cash paid for income taxes Net income (loss) Net loss for the period Gain on extinguishment of debt Amortization of debt discount Cost of sales Long-term liabilities Deferred compensation Property and equipment, net Due to related party, interest rate Average annual Interest accrued Illiad October 17, 2014 Note Supplemental disclosures of non-cash investing and financing activities: Net cash provided by financing activities Net cash provided by financing activities Cash flows from financing activities: Cash flows from investing activities: Net cash used in operating activities Recorded ownership interest in non-controlling interest Statement, Equity Components [Axis] Income Statement Commitments and Contingencies Liabilities {1} Liabilities Deferred financing costs Inventories Entity Central Index Key Document Period End Date Document Type Fife, Typenex and Iliad Accumulated Deficit Series A Preferred stock, shares outstanding Liabilities and Stockholders' Equity: Investment in unconsolidated affiliate Cash Amendment Flag Advances from Stockholder and Accrued Interest Related Party Net income (loss), diluted Net income (loss), diluted Basic earnings (loss) per share Basic earnings (loss) per share Cash - beginning of periods Cash - beginning of periods Cash - end of periods Provision for bad debts Depreciation and amortization Preferred Stock Weighted average number of shares outstanding - diluted Weighted average number of shares outstanding, diluted Net income (loss) attributable to Bergio International Net income (loss) Derivative liability Other Assets: Entity Filer Category Vis Vires Group Note April 30, 2015 New Authoritative Accounting Guidance Total Stockholders' Equity Common stock, shares issued Balance Sheet Common stock value Stockholders' Equity Total Liabilities Total Liabilities Document Fiscal Year Focus Entity Common Stock, Shares Outstanding EX-101.PRE 11 brgo-20160630_pre.xml XML 12 R1.htm IDEA: XBRL DOCUMENT v3.5.0.2
Document and Entity Information
6 Months Ended
Jun. 30, 2016
shares
Document and Entity Information  
Entity Registrant Name Bergio International, Inc.
Document Type 10-Q
Document Period End Date Jun. 30, 2016
Amendment Flag false
Entity Central Index Key 0001431074
Current Fiscal Year End Date --12-31
Entity Common Stock, Shares Outstanding 143,968,982
Entity Filer Category Smaller Reporting Company
Entity Current Reporting Status Yes
Entity Voluntary Filers No
Entity Well-known Seasoned Issuer No
Document Fiscal Year Focus 2016
Document Fiscal Period Focus Q2
Trading Symbol brgo
XML 13 R2.htm IDEA: XBRL DOCUMENT v3.5.0.2
BALANCE SHEETS - USD ($)
Jun. 30, 2016
Dec. 31, 2015
Current Assets:    
Cash $ 3,998 $ 2,893
Accounts receivable - net 489,692 51,100
Inventories 1,204,912 1,416,401
Deferred financing costs   375
Total current assets 1,698,602 1,470,769
Other Assets:    
Property and equipment, net 676,544 748,087
Investment in unconsolidated affiliate 5,828 5,828
Total Other Assets 682,372 753,915
Total Assets 2,380,974 2,224,684
Current Liabilities:    
Accounts payable and accrued liabilities 205,477 148,919
Deferred compensation 366,809 280,659
Bank lines of credit, net 348,247 340,622
Convertible debt, net 642,204 644,592
Advances from stockholder and accrued interest 267,642 253,073
Derivative liability 114,619 189,019
Total current liabilities 1,944,998 1,856,884
Long-term liabilities    
Total Liabilities 1,944,998 1,856,884
Commitments and Contingencies
Stockholders' Equity    
Series A preferred stock value
Common stock value 1,437 691
Additional paid-in capital 7,454,746 7,445,512
Accumulated deficit (7,154,792) (7,246,263)
Non-controlling interest 134,585 167,860
Total stockholders' equity 435,976 367,800
Total Liabilities and Stockholders' Equity $ 2,380,974 $ 2,224,684
XML 14 R3.htm IDEA: XBRL DOCUMENT v3.5.0.2
BALANCE SHEETS (PARENTHETICAL) - USD ($)
Jun. 30, 2016
Dec. 31, 2015
Balance Sheet    
Debt discount on convertible debt $ 1,965 $ 9,489
Series A Preferred stock, par value $ 0.00001 $ 0.00001
Series A Preferred stock, shares authorized 51 51
Series A Preferred stock, shares issued 51 51
Series A Preferred stock, shares outstanding 51 51
Common stock, par value $ 0.00001 $ 0.00001
Common stock, shares authorized 6,000,000,000 6,000,000,000
Common stock, shares issued 143,968,982 69,272,518
Common stock, shares outstanding 143,968,982 69,272,518
XML 15 R4.htm IDEA: XBRL DOCUMENT v3.5.0.2
STATEMENTS OF OPERATIONS - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Income Statement        
Sales - Net $ 548,679 $ 353,976 $ 803,809 $ 618,112
Cost of sales 250,721 302,864 395,955 411,511
Gross profit 297,958 51,112 407,854 206,601
Operating expenses        
Selling, general and administrative 152,838 311,744 369,405 463,986
Total operating expenses 152,838 311,744 369,405 463,986
Income (loss) from operations 145,120 (260,632) 38,449 (257,385)
Other income (expense)        
Other income 2,630 27 2,630 1,326
Interest expense 15,584 35,229 49,384 53,102
Derivative expense   456,940   456,940
Amortization of debt discount 3,762 24,719 7,524 40,538
Change in fair value of derivative 36,606 (72,086) 63,470 60,046
Gain on extinguishment of debt 6,768 3,659 10,930 3,659
Amortization of deferred financing costs   3,952 375 5,330
Total other income (expense) 26,658 (485,010) 19,747 (490,879)
Income (loss) before provision for income taxes 171,778 (745,642) 58,196 (748,264)
Provision for income taxes
Net income (loss) 171,778 (745,642) 58,196 (748,264)
Net income (loss) attributable to non-controlling interest (8,786) (4,014) (33,275) (4,014)
Net income (loss) attributable to Bergio International $ 180,564 $ (741,628) $ 91,471 $ (744,250)
Net loss per common share - basic and diluted $ 0.00 $ (0.07) $ 0.00 $ (0.08)
Weighted average number of shares outstanding - basic 117,791,761 10,372,074 100,931,600 9,326,768
Weighted average number of shares outstanding - diluted 874,438,841 10,372,074 857,578,680 9,326,768
XML 16 R5.htm IDEA: XBRL DOCUMENT v3.5.0.2
STATEMENT OF STOCKHOLDERS' EQUITY - USD ($)
Preferred Stock
Common Stock
Additional Paid-in Capital
Accumulated Deficit
Non-controlling ownership interest
Total Stockholders' Equity
Beginning Balance, shares at Dec. 31, 2014 51 7,398,736        
Beginning Balance, amount at Dec. 31, 2014   $ 74 $ 7,178,296 $ (6,089,383)   $ 1,088,987
Issuance of common stock for debt conversion, shares   61,873,782        
Issuance of common stock for debt conversion, value   $ 617 53,262     53,879
Intrinsic value associated with convertible notes     36,000     36,000
Recorded ownership interest in non-controlling interest     178,139   $ 171,153 349,292
Net loss for the period       (1,156,880) (3,293) (1,160,173)
Ending Balance, shares at Dec. 31, 2015 51 69,272,518        
Ending Balance, amount at Dec. 31, 2015   $ 691 7,445,697 (7,246,263) 167,860 367,800
Issuance of common stock for debt conversion, shares   74,696,464        
Issuance of common stock for debt conversion, value   $ 746 9,234     9,980
Net loss for the period       91,471 (33,275) 58,196
Ending Balance, shares at Jun. 30, 2016 51 143,968,982        
Ending Balance, amount at Jun. 30, 2016   $ 1,437 $ 7,454,746 $ (7,154,792) $ 134,585 $ 435,976
XML 17 R6.htm IDEA: XBRL DOCUMENT v3.5.0.2
STATEMENTS OF CASH FLOWS - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Operating Activities        
Net income (loss) $ 180,564 $ (741,628) $ 91,471 $ (744,250)
Adjustments to reconcile net loss to net cash used in operating activities:        
Non-controlling interest (8,786) (4,014) (33,275) (4,014)
Depreciation and amortization     72,693 61,517
Amortization of debt discount and deferred financing costs     7,899 40,538
Interest expense associated with conversions       1,897
Gain on extinguishment of debt 6,768 3,659 10,930 3,659
Derivative expense       456,940
Change in fair value of derivative 36,606 (72,086) 63,470 60,046
Provision for bad debts       7,422
Changes in operating assets and liabilities        
(Increase) decrease in accounts receivable     (438,592) (238,859)
(Increase) decrease in inventories     211,489 186,300
Increase (decrease) in accounts payable and accrued liabilities     56,626  
Increase (decrease) in deferred compensation     86,150 77,467
Net cash used in operating activities     (19,939) (233,591)
Cash flows from investing activities:        
Acquisition of property and equipment     1,150 141
Net cash used in investing activities     (1,150) (141)
Cash flows from financing activities:        
Advances (repayments) of bank lines of credit, net     7,625 66,857
Proceeds from convertible debt       170,000
Advances from (payments to) stockholder, net     14,569 (2,170)
Deferred offering costs       (5,330)
Net cash provided by financing activities     22,194 240,017
Net change in cash     1,105 6,285
Cash - beginning of periods     2,893 3,259
Cash - end of periods $ 3,998 $ 9,544 3,998 9,544
Supplemental disclosures of cash flow information:        
Cash paid for interest     3,436 10,032
Cash paid for income taxes    
Supplemental disclosures of non-cash investing and financing activities:        
Issuance of common stock for convertible debt and accrued interest     $ 9,912 $ 28,843
XML 18 R7.htm IDEA: XBRL DOCUMENT v3.5.0.2
Nature of Operations and Basis of Presentation
6 Months Ended
Jun. 30, 2016
Notes  
Nature of Operations and Basis of Presentation

Note 1 - Nature of Operations and Basis of Presentation

 

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 corporate name was changed to Bergio International, Inc. Effective July 15, 2013, the Company amended its Certificate of Incorporation to increase the Company’s authorized capital from 1,500,000,000 common shares to 3,000,000,000 common shares of stock. On April 3, 2014, the Company filed a Certificate of Amendment of Certificate of Incorporation with the Secretary of State of the State of Delaware to reduce the par value of all shares of common stock and preferred stock from $0.001 to $0.00001 per share.  On February 26, 2014, the Company filed a Certificate of Amendment of Certificate of Incorporation with the Secretary of State of the State of Delaware to increase the number of authorized shares of capital stock of the Company to 6,000,000,000 shares. Effective on October 14, 2014, the Company filed a Certificate of Amendment of Certificate of Incorporation to effectuate a 1-for-1,000 reverse stock split of the Company’s common stock. All share and per share data has been adjusted to reflect such stock splits and change in par value. 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 experiences significant seasonal volatility. The first two quarters of the year typically represent 15% - 35% of annual sales, and the remaining two quarters represent the remaining portion of annual sales.

 

Crown Luxe, Inc., a wholly-owned subsidiary, was incorporated in the State of Delaware on March 5, 2014, to operate the Company’s first retail store which was opened in Bergen County, New Jersey in the fourth quarter of 2014. It is our intent to provide another area for growth by establishing a retail outlet for the Company’s products.

 

On June 1, 2015, the Company acquired a 51% interest in R.S. Fisher, Inc., a Delaware corporation (“R.S. Fisher”), in exchange for funding the company’s operations.  The minority shareholder contributed jewelry molds and inventory valued at $349,292.

 

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position of the Company as of June 30, 2016, the results of operations for the three and six months ended June 30, 2016 and 2015, and statements of cash flows for the six months ended June 30, 2016 and 2015.  These results are not necessarily indicative of the results to be expected for the full year.  The financial statements have been prepared in accordance with the requirements of Form 10-Q and consequently do not include disclosures normally made in an Annual Report on Form 10-K.  The December 31, 2015 balance sheet included herein was derived from the audited financial statements included in the Company’s Annual Report on Form 10-K as of that date.  Accordingly, the financial statements included herein should be reviewed in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, as filed with the Securities and Exchange Commission (“SEC”) on March 30, 2016 (the “Annual Report”).

XML 19 R8.htm IDEA: XBRL DOCUMENT v3.5.0.2
Summary of Significant Accounting Policies
6 Months Ended
Jun. 30, 2016
Notes  
Summary of Significant Accounting Policies

Note 2 - Summary of Significant Accounting Policies

 

Principles of Consolidation

 

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

 

During the six months ended June 30, 2016, there have been no other material changes in the Company’s significant accounting policies to those previously disclosed in the Company’s Annual Report.

 

The Company evaluated subsequent events, which are events or transactions that occurred after June 30, 2016 through the issuance of the accompanying financial statements.

 

Non-controlling Interest

 

Non-controlling interest represents third party ownership in the net assets of our consolidated subsidiaries. For financial reporting purposes, the assets and liabilities of our majority owned subsidiaries are consolidated with those of our own, with any third party investor’s interest shown as non-controlling interest.

 

On June 1, 2015, the Company acquired a 51% interest in R.S. Fisher, in exchange for funding the company’s operations.  The minority holder contributed jewelry molds and inventory valued at $349,292.

XML 20 R9.htm IDEA: XBRL DOCUMENT v3.5.0.2
Income (loss) Per Share Disclosure
6 Months Ended
Jun. 30, 2016
Notes  
Income (loss) Per Share Disclosure

Note 3 - Income (Loss) per Share

 

Basic earnings per share includes no dilution and is computed by dividing earnings available to common stockholders by the weighted average number of common shares outstanding for the period. Dilutive earnings per share reflect the potential dilution of securities that could occur through the effect of common shares issuable upon the exercise of stock options, warrants and convertible securities.  Basic net loss per share equaled the diluted loss per share for the three and six months ended June 30, 2015, since the effect of shares potentially issuable upon the exercise or conversion was anti-dilutive. Equity instruments that may dilute earnings per share in the future are listed in Note 6 below. For the three months and six months ended June 30, 2015 issuable upon the conversion of convertible debt were not included in the computation of diluted net loss because their inclusion would be anti-dilutive

 

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

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30, 2016

 

June 30, 2015

 

June 30, 2016

 

June 30, 2015

Basic net income (loss) per share computation:

 

 

 

 

 

 

 

 

  Net income (loss)

 

$

180,564

 

$

(741,628)

 

$

91,471

 

$

(744,250)

  Weighted-average common shares outstanding

 

 

117,791,761

 

 

10,372,074

 

 

100,931,600

 

 

9,326,768

  Basic net income (loss) per share

 

$

0.00

 

$

(0.07)

 

$

0.00

 

$

(0.08)

Diluted net income (loss) per share computation:

 

 

 

 

 

 

 

 

 

 

 

 

  Net income (loss)

 

$

180,564

 

$

(741,628)

 

$

91,471

 

$

(744,250)

  Weighted-average common shares outstanding

 

 

117,791,761

 

 

10,372,074

 

 

100,931,600

 

 

9,326,768

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

 

 

756,647,080

 

 

--

 

 

756,647,080

 

 

--

Total adjusted weighted-average shares

 

 

874,438,841

 

 

10,372,074

 

 

857,578,680

 

 

9,326,768

Diluted net income (loss) per share

 

$

0.00

 

$

(0.07)

 

$

0.00

 

$

(0.08)

XML 21 R10.htm IDEA: XBRL DOCUMENT v3.5.0.2
New Authoritative Accounting Guidance
6 Months Ended
Jun. 30, 2016
Notes  
New Authoritative Accounting Guidance

4 - New Authoritative Accounting Guidance

 

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new standard requires financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The standard will be effective for the Company beginning January 1, 2020, with early application permitted. We are evaluating the impact that the adoption of this standard will have on our consolidated financial statements.

 

In March 2016, the FASB issued ASU 2016-09 ("Improvements to Employee Share-Based Payment Accounting") which simplifies several aspects of accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new standard is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years with early adoption permitted. We are evaluating the impact that the adoption of this standard will have on our consolidated financial statements.

 

In February 2016, the FASB issued ASU 2016-02 ("Leases"), which introduces the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The new standard establishes a right-of-use ("ROU") model that requires a lessee to record an ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. The new standard is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years with early adoption permitted. We are evaluating the impact that the adoption of this standard will have on our consolidated financial statements.

 

In January 2016, the FASB issued ASU No. 2016-01 (ASC Subtopic 825-10), Financial Instruments- Overall Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this ASU require entities to measure all investments in equity securities at fair value with changes recognized through net income. This requirement does not apply to investments that qualify for the equity method of accounting, to those that result in consolidation of the investee, or for which the entity meets a practicability exception to fair value measurement. Additionally, the amendments eliminate certain disclosure requirements related to financial instruments measured at amortized cost and add disclosures related to the measurement categories of financial assets and financial liabilities. The amendments in this ASU are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted for only certain portions of the ASU. The Company is in the process of assessing the impact, if any, on its consolidated financial statements.

 

In November 2015, the FASB issued ASU 2015-17 (ASC Topic 740), Income Taxes Balance Sheet Classification of Deferred Taxes. The amendments in this update are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted by all entities as of the beginning of an interim or annual reporting period. The Company is in the process of assessing the impact, if any, on its consolidated financial statements.

 

In September 2015, the FASB issued ASU 2015-16 (ASC Topic 805), Business Combinations Simplifying the Accounting for Measurement-Period Adjustments. The amendments in this update require that an acquirer recognize measurement period adjustments in the period in which the adjustments are determined. The income effects of such measurement period adjustments are to be recorded in the same period’s financial statements but calculated as if the accounting had been completed as of the acquisition date. The impact of measurement period adjustments to earnings that relate to prior period financial statements are to be presented separately on the income statement or disclosed by line item. The amendments in this update are for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted for public business entities for reporting periods for which financial statements have not yet been issued. The adoption of this new guidance is not expected to have a material impact on the Company’s consolidated financial statements and disclosures.

 

In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs with Line-of-Credit Arrangements (ASU 2015-15). The previous guidance in ASU 2015-03, as defined below, did not address the presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. Given the absence of authoritative guidance within ASU 2015-03, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. ASU 2015-15 is effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted and entities shall apply the guidance retrospectively to all prior year periods presented. The Company is in the process of assessing the effects of the application of the new guidance.

 

In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). To simplify presentation of debt issuance costs, ASU 2015-03 requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. ASU 2015-03 is effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted and entities shall apply the guidance retrospectively to all prior year periods presented. The Company is in the process of assessing the effects of the application of the new guidance.

 

In May 2014, the FASB issued ASU 2014-09 that introduces a new five-step revenue recognition model in which an entity should 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. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. This standard is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. The Company is currently evaluating the new guidance to determine the impact, if any, it will have on its consolidated financial statements.

 

In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements - Going Concern”, which requires management to evaluate whether conditions or events raise substantial doubt about the entity’s ability to continue as a going concern and, if so, to provide related footnote disclosures. The guidance is effective for annual or interim reporting periods beginning on or after December 15, 2016. Early adoption is permitted. The Company does not expect the adoption of this ASU to have a material impact on the Company’s consolidated Financial Statements.

 

In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory”. This ASU applies to inventory that is measured using first-in, first-out (“FIFO”) or average cost. Under the updated guidance, an entity should measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predicable costs of completion, disposal and transportation. Subsequent measurement is unchanged for inventory that is measured using last-in, last-out (“LILO”). This ASU is effective for annual and interim periods beginning after December 15, 2016, and should be applied prospectively with early adoption permitted at the beginning of an interim and annual reporting period. We are currently evaluating the impact of adopting ASU 2015-11 on our consolidated financial statements and related disclosures.

 

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

XML 22 R11.htm IDEA: XBRL DOCUMENT v3.5.0.2
Bank Lines of Credit Disclosure
6 Months Ended
Jun. 30, 2016
Notes  
Bank Lines of Credit Disclosure

Note 5 - Bank Lines of Credit

 

A summary of the Company’s credit facilities is as follows:

 

 

June 30,

 

December 31,

 

2016

 

2015

Various unsecured Credit Cards, minimum payment of principal and interest are due monthly at the credit card’s annual interest rate. June 30, 2016 and December 31, 2015, the interest rates ranged from 3.99% to 52.9%.

$

348,247

 

$

340,622

Current maturities included in current liabilities

$

348,247

 

$

340,622

 

The Company’s CEO also serves as a guarantor of the Company’s debt.

XML 23 R12.htm IDEA: XBRL DOCUMENT v3.5.0.2
Convertible Debt Disclosure
6 Months Ended
Jun. 30, 2016
Notes  
Convertible Debt Disclosure

Note 6 - Convertible Debt

 

Fife, Typenex and Iliad

 

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

 

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

 

On October 17, 2014, the Company entered into a financing arrangement with Iliad to provide additional financing in the amount of up to $450,000 through the issuance of a Secured Convertible Promissory Note (the “Note”). The Company agreed to cover Iliad’s legal, accounting and other related fees in the amount of $5,000, which is included in the principal balance of the Note. The Note will accrue interest at the rate of 8% per annum until the Note is paid in full. Monies are to be drawn in eight tranches with the initial tranche in the amount of $105,000, and the remaining balance of $350,000 in 7 tranches of $50,000 each. The Company drew down the initial tranche on October 17, 2014. The Note has a maturity date of July 17, 2016. The Company is currently negotiating with the lender (see below).

 

Beginning six months after October 17, 2014 and on the same day each month thereafter, the Company shall make an installment payment, based upon the unpaid balance. At the option of the Company, payments may be made in cash or by converting the installment amount into shares of the Company’s common stock. The conversion price is equal to the lesser of (i) $0.0005 per share and (ii) 67.5% of the average of the three lowest closing bid prices in the 15 trading days immediately preceding the conversion. The Company has the right to prepay the Note at 135% of the outstanding balance at the time of prepayment. There were no conversions during the six months ended June 30, 2016. The outstanding balance at June 30, 2016 and December 31, 2015 was $100,000, respectively, with accrued interest of $13,158 and $10,630 at June 30, 2016 and December 31, 2015, respectively.

 

During the year ended December 31, 2014, the Company drew down an additional $314,703. There were no conversions during the six months ended June 30, 2016. The outstanding balances at June 30, 2016 and December 31, 2015 were $328,470 and $328,470, respectively, with accrued interest of $19,290 and $11,005 at June 30, 2016 and December 31, 2015, respectively.

 

During the three months ended June 30, 2016, the Company made a retail sale to a customer in the amount of $497,600. This customer holds convertible debt which the Company is obligated to pay them in the amount of approximately $428,000. The Company is currently negotiating an agreement with this customer to offset the convertible debt against the accounts receivable.

 

Third Party Note

 

In November 2014, the Company converted a portion of its outstanding accounts payable for legal services to a third party into two convertible promissory notes in the aggregate amount of $63,275. These are demand notes and accrue interest at the rate of 10% on the outstanding balance.  The notes are convertible into shares of the Company’s common stock based on 65% of the average ten trading days closing bid price during the preceding ten consecutive trading days immediately prior to the conversion. During the six months ended June 30, 2016, principal of $9,159 was converted into 67,852,048 shares of common stock. The outstanding balances at June 30, 2016 and December 31, 2015 were $39,974 and $49,133, respectively, with accrued interest of $6,442 and $4,249 at June 30, 2016 and December 31, 2015, respectively.

 

On April 7, 2015, the convertible promissory notes and accrued interest was assigned to Carebourn Capital L.P. (“Carebourn Capital”). All terms and conditions remained the same, except that notes are convertible into shares of the Company’s common stock equal to 50% of the average ten trading days closing bid price during the preceding ten consecutive trading days immediately prior to the conversion.

 

KBM Worldwide

 

On February 4, 2015, the Company entered into an 8% convertible note in the amount of $54,000 with KBM Worldwide, Inc. (“KBM Worldwide”). The principal and accrued interest is payable on or before November 6, 2015. At the option of the Company, but not before six months from the date of issuance, the holder may elect to convert all or part of such note into the Company’s common stock. The note is convertible into shares of the Company’s common stock at a price of 60% of the average of the three lowest trading prices during the 10 days prior to the date of conversion or $0.00009, whichever is greater. There were no conversions during the six months ended June 30, 2016. The outstanding balance at June 30, 2016 and December 31, 2015 was $41,260 with accrued interest of $5,253 and $3,584 at June 30, 2016 and December 31, 2015, respectively.

 

Vis Vires Group, Inc.

 

On March 11, 2015, the Company entered into an 8% convertible note in the amount of $38,000 with Vis Vires Group, Inc.  (“Vis Vires”). The principal and accrued interest is payable on or before November 6, 2015. At the option of the Company, but not before six months from the date of issuance, the holder may elect to convert all or part of the convertible into the Company’s common stock. The note is convertible into shares of the Company’s common stock at a price equal to 60% of the average of the three lowest trading prices during the 10 days prior to the date of conversion or $0.00009, whichever is greater. There were no conversions during the six months ended June 30, 2016. The outstanding balance at June 30, 2016 and December 31, 2015 was $38,000 with accrued interest of $4,028 and $3,584 at June 30, 2016 and December 31, 2015, respectively.

 

On April 30, 2015, the Company entered into an 8% convertible note in the amount of $33,000 with Vis Vires. The principal and accrued interest is payable on or before November 6, 2015. At the option of the Company, but not before six months from the date of issuance, the holder may elect to convert all or part of the convertible into the Company’s common stock. The note is convertible into shares of the Company’s common stock at a price equal to 60% of the average of the three lowest trading prices during the 10 days prior to the date of conversion or $0.00009, whichever is greater. There were no conversions during the six months ended June 30, 2016. The outstanding balance at March 31, 2016 and December 31, 2015 was $33,000 with accrued interest of $3,029 and $1,695 at June 30, 2016 and December 31, 2015, respectively.

 

LG Capital Funding, LLC

 

On May 4, 2015, the Company entered into an 8% convertible note in the amount of $36,750 with LG Capital Funding, LLC (“LG Capital”). The principal and accrued interest is payable on or before May 4, 2016. The holder, at its option, may elect to convert all or part ofsuch note the Company’s common stock at a price equal to 60% of the lowest trading prices during the 20 days prior to the date of conversion. During the six months ended June 30, 2016, principal of $753 and interest of $68 was converted into 6,844,416 shares of common stock. The outstanding balances at June 30, 2016 and December 31, 2015 were $35,687 and $36,440, respectively, with accrued interest of $3,442 and $1,968 at June 30, 2016 and December 31, 2015, respectively.

 

JMJ Financial

 

On April 15 2015, the Company entered into a $250,000 convertible note with JMJ Financial. The consideration was $225,000 and $25,000 original issue discount.  The principal and accrued interest is payable on or before May 4, 2016. On April 15, 2015, the Company borrowed $25,000 of this amount. The holder, at its option, may elect to convert all or part of the convertible into the Company’s common stock at a price equal to the lesser of $0.018 per share or 60% of the lowest trading price during the 25 days prior to the date of conversion. There were no conversions during the six months ended June 30, 2016. The outstanding balance at June 30, 2016 and December 31, 2015 was $27,778 with accrued interest of $2,625 and $1,501 at June 30, 2016 and December 31, 2015, respectively.

 

As of June 30, 2016 and December 31, 2015, total convertible debt was $642,204 and $644,592, respectively, net of debt discount of $1,965 and $9,489, respectively.

XML 24 R13.htm IDEA: XBRL DOCUMENT v3.5.0.2
Derivative Liability Disclosure
6 Months Ended
Jun. 30, 2016
Notes  
Derivative Liability Disclosure

Note 7 - Derivative Liability

 

The Company accounts for the fair value of the conversion features of its convertible debt in accordance with ASC Topic No. 815-15 “Derivatives and Hedging; Embedded Derivatives” (“Topic No. 815-15”). Topic No. 815-15 requires the Company to bifurcate and separately account for the conversion features as an embedded derivative contained in the Company’s convertible debt. The Company is required to carry the embedded derivative on its balance sheet at fair value and account for any unrealized change in fair value as a component of results of operations. The Company values the embedded derivatives using the Black-Scholes pricing model. Amortization of debt discount amounted to $3,762 and $7,524 for the three and six months ended June 30, 2016, respectively, as compared to $24,719 and $40,538 for the three and six months ended June 30, 2015, respectively. The derivative liability is revalued each reporting period using the Black-Scholes model. As of June 30, 2016 and December 31, 2015, the derivative liability was $114,619 and $189,019, respectively.

 

The Black-Scholes model utilized the following inputs to value the derivative liability at the date of issuance of the convertible note at March 31, 2016:

 

Stock Price - The stock price was based closing price of the Company’s stock as of the valuation date, which was $0.0002 at June 30, 2016.

 

Variable Conversion Prices - The conversion price was based on: (i) 50% of the average closing bid price during the preceding ten consecutive trading days immediately prior to the conversion at June 30, 2016 for Carebourn Capital; (ii) 60% of the lowest trading prices during the 20 days prior to the date of conversion at June 30,2016 for LG Capital; (iii)  the lower of $0.018 per share or 60% of the lowest trading price during the 25 days prior to the date of conversion at June 30, 2016 for JMJ Financial.

 

Time to Maturity - The time to maturity was determined based on the length of time between the valuation date and the maturity of the debt. Time to maturity ranged from 34 to 289 days at June 30, 2016.

 

Risk Free Rate - The risk free rate was based on the Treasury Note rate as of the valuation dates with a term commensurate with the remaining term of the debt. The risk free rate at June 30, 2016 ranged from 0.20% to 0.45%, based on the term of the note.

 

Volatility - The volatility was based on the historical volatility of the Company. The average volatility was 415.12% at June 30, 2016.

XML 25 R14.htm IDEA: XBRL DOCUMENT v3.5.0.2
Related Party Transactions Disclosure
6 Months Ended
Jun. 30, 2016
Notes  
Related Party Transactions Disclosure

Note 8 - Related Party Transactions

 

The Company receives periodic advances from its principal executive officer based upon the Company’s cash flow needs. At June 30, 2016 and December 31, 2015, $267,642 and $253,073, respectively, was due to the principal executive officer, including accrued interest.  Interest expense is accrued at an average annual market rate of interest which was 3.15% at June 30, 2016 and December 31, 2015, respectively.  Interest expense associated with this loan was $4,101 and $8,106 for the three and six months ended June 30, 2016 as compared to $1,453 and $3,038 for the three and six months ended June 30, 2015, respectively. No terms for repayment have been established. As a result, the amount is classified as a Current Liability.

 

Effective September 1, 2011, the Company and CEO entered into an Amended and Restated Employment Agreement (the “Amended Agreement”) which primarily retains the term and compensation of the original agreement. The Amended Agreement, however, removes the section which previously provided for the issuance of Company common stock to the CEO, from time to time, when the Company is unable to pay the CEO the full amount of his Base Salary (as defined in the Amended Agreement) which would allow the CEO to maintain a fifty-one percent (51%) share of the Company’s outstanding common stock.  However, the CEO does have the right to request all or a portion of his unpaid Base Salary be paid with the Company’s restricted common stock. In addition, the Amended Agreement provides for the issuance of 51 shares of newly authorized Series A Preferred Stock to be issued to the CEO. As defined in the Certificate of Designations, Preferences and Rights of the Series A Preferred Stock, each share of Series A Preferred Stock has voting rights such that the holder of 51 shares of Series A Preferred Stock will effectively maintain majority voting control of the Company. Effective November 3, 2011, the CEO notified the Company that for the one year period, retroactive from April 1, 2011, through December 31, 2012, he would reduce his Base Salary to $100,000. The reduction in base compensation was subsequently extended to December 31, 2013. The CEO is currently deferring a portion of his salary to conserve cash. Deferred wages due to the CEO amounted to $366,809 and $280,659 for the periods ended June 30, 2016 and December 31, 2015, respectively.

 

The Company is in process of extending this agreement.

XML 26 R15.htm IDEA: XBRL DOCUMENT v3.5.0.2
Litigation Disclosure
6 Months Ended
Jun. 30, 2016
Notes  
Litigation Disclosure

Note 9 - Litigation

 

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

XML 27 R16.htm IDEA: XBRL DOCUMENT v3.5.0.2
Summary of Significant Accounting Policies: Principles of Consolidation (Policies)
6 Months Ended
Jun. 30, 2016
Policies  
Principles of Consolidation

Principles of Consolidation

 

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

XML 28 R17.htm IDEA: XBRL DOCUMENT v3.5.0.2
Income (loss) Per Share Disclosure: Schedule of Earnings Per Share, Basic and Diluted (Tables)
6 Months Ended
Jun. 30, 2016
Tables/Schedules  
Schedule of Earnings Per Share, Basic and Diluted

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30, 2016

 

June 30, 2015

 

June 30, 2016

 

June 30, 2015

Basic net income (loss) per share computation:

 

 

 

 

 

 

 

 

  Net income (loss)

 

$

180,564

 

$

(741,628)

 

$

91,471

 

$

(744,250)

  Weighted-average common shares outstanding

 

 

117,791,761

 

 

10,372,074

 

 

100,931,600

 

 

9,326,768

  Basic net income (loss) per share

 

$

0.00

 

$

(0.07)

 

$

0.00

 

$

(0.08)

Diluted net income (loss) per share computation:

 

 

 

 

 

 

 

 

 

 

 

 

  Net income (loss)

 

$

180,564

 

$

(741,628)

 

$

91,471

 

$

(744,250)

  Weighted-average common shares outstanding

 

 

117,791,761

 

 

10,372,074

 

 

100,931,600

 

 

9,326,768

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

 

 

756,647,080

 

 

--

 

 

756,647,080

 

 

--

Total adjusted weighted-average shares

 

 

874,438,841

 

 

10,372,074

 

 

857,578,680

 

 

9,326,768

Diluted net income (loss) per share

 

$

0.00

 

$

(0.07)

 

$

0.00

 

$

(0.08)

XML 29 R18.htm IDEA: XBRL DOCUMENT v3.5.0.2
Bank Lines of Credit Disclosure: Schedule of Line of Credit Facilities (Tables)
6 Months Ended
Jun. 30, 2016
Tables/Schedules  
Schedule of Line of Credit Facilities

 

 

June 30,

 

December 31,

 

2016

 

2015

Various unsecured Credit Cards, minimum payment of principal and interest are due monthly at the credit card’s annual interest rate. June 30, 2016 and December 31, 2015, the interest rates ranged from 3.99% to 52.9%.

$

348,247

 

$

340,622

Current maturities included in current liabilities

$

348,247

 

$

340,622

XML 30 R19.htm IDEA: XBRL DOCUMENT v3.5.0.2
Nature of Operations and Basis of Presentation (Details) - USD ($)
Oct. 14, 2014
Jun. 01, 2015
Details    
Reverse split of common stock 1-for-1,000 reverse stock split  
Interest acquired in R.S Fisher, Inc.   51.00%
Contributed value from acquisition received   $ 349,292
XML 31 R20.htm IDEA: XBRL DOCUMENT v3.5.0.2
Summary of Significant Accounting Policies (Details)
Jun. 01, 2015
USD ($)
Details  
Interest acquired in R.S Fisher, Inc. 51.00%
Contributed value from acquisition received $ 349,292
XML 32 R21.htm IDEA: XBRL DOCUMENT v3.5.0.2
Income (loss) Per Share Disclosure: Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Details        
Net income (loss), basic $ 180,564 $ (741,628) $ 91,471 $ (744,250)
Weighted average number of shares outstanding, basic 117,791,761 10,372,074 100,931,600 9,326,768
Basic earnings (loss) per share $ 0.00 $ (0.07) $ 0.00 $ (0.08)
Net income (loss), diluted $ 180,564 $ (741,628) $ 91,471 $ (744,250)
Incremental shares attributable to the assumed exercise of outstanding stock options and warrants 756,647,080   756,647,080  
Weighted average number of shares outstanding, diluted 874,438,841 10,372,074 857,578,680 9,326,768
Diluted earnings (loss) per share $ 0.00 $ (0.07) $ 0.00 $ (0.08)
XML 33 R22.htm IDEA: XBRL DOCUMENT v3.5.0.2
Bank Lines of Credit Disclosure: Schedule of Line of Credit Facilities (Details) - USD ($)
Jun. 30, 2016
Dec. 31, 2015
Details    
Bank lines of credit, net $ 348,247 $ 340,622
XML 34 R23.htm IDEA: XBRL DOCUMENT v3.5.0.2
Convertible Debt Disclosure (Details) - USD ($)
6 Months Ended
Jun. 30, 2016
Dec. 31, 2015
Oct. 17, 2014
Dec. 12, 2012
Convertible debt, net $ 642,204 $ 644,592    
Debt discount 1,965 9,489    
Fife December 12, 2012 Note 21        
Convertible note       $ 325,000
Illiad October 17, 2014 Note        
Convertible note 100,000   $ 450,000  
Accrued interest on note 10,630      
Fife, Typenex and Iliad        
Convertible note 328,470 328,470    
Accrued interest on note 19,290 11,005    
Third Party Note - Assigned to Carebourn Capital        
Convertible note 39,974 49,133    
Accrued interest on note 6,442 4,249    
Amount of debt converted into common stock $ 9,159      
Shares of common stock issued for debt conversion 67,852,048      
KBM Worldwide Note        
Convertible note $ 41,260      
Accrued interest on note 5,253 3,584    
Vis Vires Group Note March 11, 2015        
Convertible note 38,000      
Accrued interest on note 4,028 3,584    
Vis Vires Group Note April 30, 2015        
Convertible note 33,000      
Accrued interest on note 3,029 1,695    
LG Capital Funding Note        
Convertible note 35,687 36,440    
Accrued interest on note 3,442 1,968    
Amount of debt converted into common stock $ 753      
Shares of common stock issued for debt conversion 6,844,416      
JMJ Financial Note        
Convertible note $ 27,778      
Accrued interest on note $ 2,625 $ 1,501    
XML 35 R24.htm IDEA: XBRL DOCUMENT v3.5.0.2
Derivative Liability Disclosure (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Dec. 31, 2015
Details          
Amortization of debt discount amount $ 3,762 $ 24,719 $ 7,524 $ 40,538  
Derivative liability $ 114,619   $ 114,619   $ 189,019
XML 36 R25.htm IDEA: XBRL DOCUMENT v3.5.0.2
Related Party Transactions Disclosure (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Dec. 31, 2015
Nov. 03, 2011
Base salary, per year, CEO (reduced)           $ 100,000
Deferred wages due to the CEO $ 366,809   $ 366,809   $ 280,659  
Advances from Stockholder and Accrued Interest            
Due to related party $ 267,642   $ 267,642   $ 253,073  
Due to related party, interest rate 3.15%   3.15%      
Interest expense, related party debt $ 4,101 $ 1,453 $ 8,106 $ 3,038    
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