Bergio International, Inc. (OTCMKTS:BRGO) Tanks on Fear of Further Dilution

Bergio International, Inc. (OTCMKTS:BRGO)’s latest 10-Q covers the third quarter of 2013 and it came out on November 19. Just a quick look at it will show you that it brings some bad news. Between August and November, BRGO‘s management team printed a whopping 954 million shares of common stock. Take a closer look, and you’ll see that the majority of them were issued as a conversion of debt and were valued at quite a discount.

There are some other issues as well. BRGO has been generating revenues for quite some time, but the 10-Q shows that the sales during the third quarter of 2013 have dropped by around 9.7% when compared to the same period of 2012. The operating expenses were bigger than the revenues as well and as of September 30, BRGO‘s bank account had less than $10 thousand in it. On the whole, the report is less than impressive and it prompted a lot of investors to hit the panic button. In just three sessions, BRGO lost half of its value.

Hardly the performance everyone wants to see, but even so, some people decided to stick with the ticker. A few days before the issuance of the 10-Q, BRGO‘s CEO, Berge Abajian, said that his company will no longer use convertible notes as financing methods. He seemed determined to stop the dilution and finally bring some value to the shareholders.

The press releases that followed suggested that he might actually be onto something. The DTC Chill was lifted on November 25 and with the start of the new year, Mr. Abajian made several updates about negotiations and events that could boost sales and raise awareness around the company and its products.

On January 30, BRGO filed an 8-K informing the shareholders that the number of authorized shares has been increased to 4 billion. We saw some high volumes, but, surprisingly or not, the ticker avoided a drop. In fact, it remained quite stable which means that investors showed some understanding towards the management team and realized that some notes still need to be converted before BRGO is finally set free from the toxic financing mess.

A couple of hours after Friday’s opening bell, an update hit the wire which suggested that the end might actually be quite near. BRGO said that there are still some notes outstanding, but insisted that most of the conversion has already been done. The effects on the stock performance were quite profound.

A couple of hours were enough for the ticker to jump up by 25% while shifting around $1.18 million worth of shares. Apparently, shareholders and investors thought that BRGO has managed to free itself from the chains of the convertible notes and they imagined a bright future for the company.

Yesterday, the market’s sentiment changed. A couple of hours after the opening bell, BRGO filed another 8-K form informing us about one more change to the articles of incorporation. Apparently, the number of authorized shares now stands at 6 billion. Investors didn’t like that.

When the closing bell rang, BRGO was sitting at $0.0009 per share (40% under last week’s close). Some traders are quite angry about the raise in the A/S count and this is evident from early trading today as well. About an hour after the opening bell, BRGO is hovering around $0.0007 per share – another 22% down.

It is quite clear that BRGO are trying to do something about the horrific dilution. And although they issued quite a lot of shares, they did manage to strengthen their balance sheet a little bit during the third quarter of 2013 (more than $1.6 million worth of liabilities were satisfied). Investors, however, seem to have had enough.

The management team will now need to convince them that there is a light at the end of the tunnel after all and it’s quite clear that this will be a tall order to fill. That’s why, carefully evaluating the risks before putting any money on the line is absolutely essential.