Annual report pursuant to Section 13 and 15(d)

Organization and Going Concern

v3.10.0.1
Organization and Going Concern
9 Months Ended 12 Months Ended
Sep. 30, 2017
Dec. 31, 2017
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™ products, and marketing rights. The 5BARz products are highly engineered wireless units referred to as “cellular network extenders”. The initial 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. 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™ cellular network extender products. During 2016, the Company developed a next generation Wifi router and smart home hub, the ROVR, equipped with the 5BARz Smart Experience connectivity software and applications. 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 June 27, 2016, the Company incorporated 5BARz Pte. Ltd. in Singapore a 100% owned subsidiary. On January 18, 2017, the Company incorporated 5BARz Global

Technology in Grand Cayman a 100% owned subsidiary.

 

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related disclosures of the Company included in the Company’s Annual Report on Form 10-K for the years ended December 31, 2017, 2016 and 2015, included elsewhere in this filing. The Company’s accounting policies are more fully described in the Notes to the consolidated financial statements in its Annual Report on Form 10-K for the years ended December 31, 2017, 2016 and 2015. These condensed consolidated 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%) and 5BARz Pte. Ltd. (100%) in Singapore. Results of operations for subsidiary Companies are reflected only from the date of acquisition 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 settlement of liabilities and commitments in the normal course of business. The Company has sales of $2,325 and $56,071 for the nine months ended September 30, 2017 and September 30, 2016, respectively. The Company incurred losses of $2,588,545 and $4,908,237 during the nine months ended September 30, 2017 and 2016, respectively. Cash used in operating activities was $1,093,949 and $3,797,544 for the nine months ended September 30, 2017 and 2016, 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. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance date of this report. The Company is seeking to raise capital through additional debt and/or equity financings to fund its operations in the future. Management cannot provide assurance that we will ultimately achieve profitable operations or become cash flow positive or raise additional debt and/or equity capital. Although we have historically raised capital from sales of common stock, there is no assurance that we will be able to continue to do so. If we are unable to raise additional capital or secure additional lending in the near future, management expects that we will need to curtail our operations. 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. Our condensed financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

 

Management’s assessment of the significant factors includes several quantitative and qualitative conditions.

 

  ·

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. The Company’s gross proceeds from warrants exercise and private placements for the nine months ended September 30, 2017 was $234,820 compared to $3,856,083 in 2016.  Further during the nine months ended September 30,2017 the Company raised $614,271 through the issuance of convertible debt securities in Canada (2016 – nil). Further, the availability of capital markets for the Company have facilitated the Company’s ability to pay for services and settle debt by way of the issuance of common shares. During the nine months ended September 30, 2017, the Company settled debt and paid for services by the issuance of $833,137 in common shares, compared to $1,875,269 during the nine months ended September 30, 2016.

 

  · Product Commercialization – In August 2015, the Company became an approved vendor and received its first purchase orders for the Company’s patented “Cellular Network Extender” from a Tier 1 cellular network operator in India. Since that time the Company has received follow on orders from that customer. In March 2016 the Company became an approved vendor and received its first purchase orders for product from a second Tier 1 cellular network operator in India for Cellular Network Extenders.

   

  · Broadband Diversification Opportunity - In conjunction with the work by the Company has commenced delivery of a new product the 5BARz ROVR, a smart WIFI device, pursuant to an agreement with a tier one broadband Company in India.

  

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.

 

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™ products, and marketing rights. The 5BARz products are highly engineered wireless units referred to as “cellular network extenders”. The initial 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. 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™ cellular network extender products. During 2016, the Company developed a next generation Wifi router and smart home hub, the ROVR, equipped with the 5BARz Smart Experience connectivity software and applications. 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 June 27, 2016, the Company incorporated 5BARz Pte. Ltd. in Singapore a 100% owned subsidiary. On January 18, 2017, the Company incorporated 5BARz Global Technology in Grand Cayman a 100% owned subsidiary.

 

These consolidated 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 Pte. Ltd. (100%) in Singapore and 5BARz Global Technology in Grand Cayman (100%). Results of operations for subsidiary Companies are reflected only from the date of acquisition of that subsidiary for the period indicated in the respective statement.  

 

Going concern

 

These consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in our financial statements, the Company has sales of $2,329 for the year ended December 31, 2017 (2016 - $71,374, 2015 - $2,350). The Company incurred losses of $4,081,129 during the year ended December 31, 2017 (2016 - $4,331,216, 2015 - $10,428,766). Cash used in operating activities was $1,583,955, (2016 - $4,499,689, 2015 - $4,042,141). The Company has recurring net losses since inception with an accumulated deficit of $33,876,475 as of December 31, 2017. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance date of this report. The Company is seeking to raise capital through additional debt and/or equity financings to fund its operations in the future. Management cannot provide assurance that we will ultimately achieve profitable operations or become cash flow positive or raise additional debt and/or equity capital. Although we have historically raised capital from sales of common stock, there is no assurance that we will be able to continue to do so. If we are unable to raise additional capital or secure additional lending in the near future, management expects that we will need to curtail our operations. 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. Our financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

 

Management’s assessment of the significant factors includes several quantitative and qualitative conditions.

  ·

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. The Company’s gross proceeds warrants exercise, from private placements and convertible debt for the year ended December 31, 2017 was $1,444,546 compared to $4,568,083 in 2016 and $5,436,918 in 2015. Further, the availability of capital markets for the Company have facilitated the Company’s ability to pay for services and settle debt by way of the issuance of common shares.  During 2017 the Company settled debt, paid for services by the issuance of $866,479 in common shares, compared to $2,411,947 in 2016 and $1,803,173 in 2015.

     
  ·

Product Commercialization – In August 2015, the Company became an approved vendor and received its first purchase orders for the Company’s patented “Cellular Network Extender” from a Tier 1 cellular network operator in India. Since that time the Company has received follow on orders from that customer. In March 2016, the Company became an approved vendor and received its first purchase orders for product from a second Tier 1 cellular network operator in India for Cellular Network Extenders. 

 

     
  ·

Broadband Diversification Opportunity – In conjunction with the work by the Company with Cellular Network operators in India, the Company has commenced delivery of a new product the 5BARz ROVR, a smart WIFI device, pursuant to an agreement with a tier one broadband Company in India.

 

 

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.