Bergio International, Inc. (OTCMKTS:BRGO) Disappoints Investors Once Again

If you are one of the people who base their due diligence on press releases alone, you probably think that things are going along nicely over at Bergio International, Inc. (OTCMKTS:BRGO). Indeed this seems to be the case.

There’s been quite a lot of PR action around the company lately and it’s fair to say that all the announcements seem really rather positive. BRGO initiated a social media campaign which, they say, is going extremely well. In a recent press release, the company CEO, Mr. Berge Abajian, said that the number of likes on their Facebook page has exploded, they have much more followers on Twitter, and, most importantly, they are generating quite a lot more traffic on their website.

It’s not all social media hype either. The company’s products were featured on ShopHQ a couple of times over the past months and the success has been so great, that more airings are being scheduled for the future. Mr. Abajian says that the business is booming in Europe as well. Apparently, some celebrities in Russia and Armenia are big fans of the high-end jewelry offered by BRGO and this is all resulting in what the company CEO likes to call “consistent sales”.

It all sounds good and we can see that a lot of investors reacted to the positive developments. The latest PR went online during the first hours of November 5’s trading session and it resulted in no less than 200% in daily gains. The next three days also ended in the green and on Monday, the ticker even managed to get out of the triple-zero territory. Yesterday’s performance, however, was less impressive. BRGO opened the session at $0.001, muscled its way to a brief intraday high of $0.0011 but then fell hard finishing the day at $0.008. More than 514 million shares changed hands which is ten times the average number for the last three months.

20% in daily losses is something nobody wants to see, but we can’t say that we’re too surprised. Penny stocks, as you probably know, are extremely volatile and tickers that are traded under the $0.01 per share mark are even more prone to sharp movements. Still, the press releases say that everything is going according to plan, so it should be only a matter of time before the price reacts accordingly, right?

Time will tell. The announcements and updates are getting quite a lot of people excited, but we can definitely say that the shareholders are not out of the woods just yet.

Mr. Abajian says in the latest press release that, despite the tough economic climate, the company is in a healthy financial state. People will be happy to see his words confirmed by the future 10-Q’s and 10-K’s and they will also be quite exhilarated by a potential positive bottom line – something that they haven’t seen in a while. BRGO‘s latest quarterly report, for example, contains a relatively solid balance sheet but it also boasts a rather hard-to-swallow net loss. Here’s a summary of the most important figures:

• cash: $12 thousand
• current assets: $2.7 million
• current liabilities: $1.7 million
• quarterly revenues: $378 thousand
• quarterly net loss: $1.2 million

Apart from the rather large expenses, we can also see that the revenues have decreased by as much as 16% year-over-year. The management team say that this is the result of the decreasing prices of gold, but even so, we can’t imagine that it’s going down too well with the stockholders. That, however, isn’t the biggest problem with BRGO.

The shareholders’ worst enemy over the last couple of years has been the absolutely devastating dilution. Between May 13 and August 16, the company issued more than 232 million shares. The number of issued and outstanding stock according to the OTC Markets’ website is 1,078,552,821 which, you would agree, is quite a lot, but you should bear in mind that they recently increased the authorized shares to 3 billion, which provides plenty of room for further issuance.

Mr. Abajian said in the latest press release that they are trying to battle the dilution, that they stopped seeking convertible financing on September 1, and that they have secured funding from Columbia Bank which should be sufficient for the time being. But is it too little, too late? The future should give us the answer but in the meantime, considering the risks carefully is absolutely crucial.