Quarterly report pursuant to Section 13 or 15(d)

Organization and Going Concern

v3.5.0.2
Organization and Going Concern
9 Months Ended
Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Going Concern

Note 1 – Organization and Going Concern

  

The Company was incorporated under the laws of the State of Nevada on November 14, 2008. The Company was originally named “Bio-Stuff” and was a designated shell corporation from inception to the date of acquisition of the 5BARz assets.

 

In 2010 the Company changed its name to 5BARz International, Inc. and the Company acquired a set of agreements for a 50% interest in certain intellectual property underlying the 5BARz™ RF products, and marketing rights. The 5BARz initial products are highly engineered wireless units referred to as “cellular network extenders”. The 5BARz™ device captures cell signal and provides a smart amplification and resend of that cell signal giving the user improved cellular reception in their home, office or while mobile. During the quarter, the Company developed an advanced Wifi product entitled the 5BARz Fuji Broadband Router. The initial deployment of this product was announced August 31, 2016, through a strategic alliance agreement with a top internet service provider in India.

 

On March 29, 2012, 5BARz International, Inc. acquired a 60% controlling interest in CelLynx Group, Inc. (the founder of the 5BARz technology) and a 60% interest in the intellectual property underlying the 5BARz™ products. On January 12, 2015 the Company incorporated two new subsidiaries, 5BARz International SA de CV (99%) in Mexico, and 5BARz India Private Limited (99.9%) in India. On March 7, 2016 the Company incorporated a wholly owned subsidiary 5BARz Technology Holdings, Inc. (100%) in the State of Nevada and on May 26, 2016 the Company incorporated a wholly owned subsidiary, 5BARz Pte. Ltd. (100%) in Singapore.

 

These financial statements reflect the financial position for the Company and its subsidiary companies, CelLynx Group Inc. (60%) and its wholly owned subsidiary CelLynx Inc. (100%), 5BARz International SA de CV (99%), 5BARz India Private Limited (99.9%), 5BARz Technology Holdings, Inc. (100%), and 5BARz Pte. Ltd. (100%). Results of operations for subsidiary Companies are reflected only from the date of acquisition or formation of that subsidiary for the period indicated in the respective statement.

 

Going concern

 

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has commenced the commercial sale of product at limited production volumes. The Company incurred losses of $4,908,237 and $8,141,431 during the nine months ended September 30, 2016 and 2015 respectively. Cash used in operating activities was $3,797,544 and $3,027,498 for the nine months ended September 30, 2016 and 2015 respectively. The Company is seeking additional sources of equity or debt financing, and there is no assurance these activities will be successful. These factors raise substantial doubt about the Company’s ability to continue as a going concern and the Company’s continued existence is dependent upon adequate additional financing being raised to develop its sales and marketing program for the sales of 5BARz product, to expand the Company’s product base and commence its planned operations.

 

Management’s assessment of the significant mitigating factors includes several quantitative and qualitative conditions which support the Company’s ability to continue as a going concern as follows;

 

  · Continued ability to generate proceeds from private placements – since inception of the business in 2008, the Company has financed operations through private placements and debt, with increased volumes in the recent years. The Company’s gross proceeds from private placements, exercise of warrants, and debt for the nine months ended September 30, 2016 was $3,856,083 compared to $3,634,219 in 2015. The Company paid for services and settled debt by the issue of shares in the amount of $1,875,269 during the nine months ended September 30, 2016 compared to $1,021,527 in 2015.
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Product Commercialization – The Company became an approved vendor and received several purchase orders for Cellular Network Extenders from two Tier 1 cellular network operators in India. These opportunities and expansion of products by the Company represent significant steps forward in the Company’s commercialization process. However, there is no assurance that this profitability will be accomplished.

 

The accompanying consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result, should the Company be unable to continue as a going concern.