Note 6 - Bank Lines of Credit
A summary of the Company’s credit facilities is as follows:
June 30,
December 31,
2017
2016
Various unsecured Credit Cards, minimum payment of principal and interest are due monthly at the credit card’s annual interest rate. June 30, 2017 and December 31, 2016, the interest rates ranged from 3.99% to 52.9%.
$
388,999
$
375,292
Current maturities included in current liabilities
$
388,999
$
375,292
The Company’s CEO also serves as a guarantor of the Company’s debt.
Note 7 - 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).
10
BERGIO INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 7 - Convertible Debt (continued)
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. During the six months ended June 30, 2017 principal and interest of $27,336 was converted into 402,000,000 shares of common stock. The outstanding balances at June 30, 2017 and December 31, 2016 was $73,414 and $97,609, respectively, with accrued interest of $1,051 and $653 at June 30, 2017 and December 31, 2016, 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, 2017. The outstanding balances at June 30, 2017 and December 31, 2016 were $329,175, with accrued interest of $54,883 and $39,831 at June 30, 2017 and December 31, 2016, respectively.
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, 2017, principal of $10,345 was converted into 197,876,624 shares of common stock. The outstanding balances at June 30, 2017 and December 31, 2016 were $12,327 and $22,672, respectively, with accrued interest of $11,000 and $9,000 at June 30, 2017 and December 31, 2016, 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, 2017. The outstanding balances at June 30, 2017 and December 31, 2016 were $40,590, with accrued interest of $8,536 and $6,913 at June 30, 2017 and December 31, 2016, respectively.
11
BERGIO INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 7 - Convertible Debt (continued)
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, 2017. The outstanding balances at June 30, 2017 and December 31, 2016 were $38,000 with accrued interest of $7,102 and $5,582 at June 30, 2017 and December 31, 2016, 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, 2017. The outstanding balance at June 30, 2017 and December 31, 2016 was $33,000 with accrued interest of $5,684 and $4,364 at June 30, 2017 and December 31, 2016, 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. . During the six months ended June 30, 2017, principal of $1,096 was converted into 91,000 shares of common stock. The outstanding balance at June 30, 2017 and December 31, 2016 was $12,133 and $13,229, respectively, with accrued interest of $4,290, and $3,761 at June 30, 2017 and December 31, 2016, respectively.
As of June 30, 2017 and December 31, 2016, total convertible debt was $538,639 and $574,275, respectively.
Note 8 - 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 $-0- and $7,524 for the six months ended June 30, 2017 and 2016, respectively. The derivative liability is revalued each reporting period using the Black-Scholes model. As of June 30, 2017 and December 31, 2016, the derivative liability was $27,565 and $46,955, respectively.
