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Monday, 02/01/2016 5:30:13 PM

Monday, February 01, 2016 5:30:13 PM

Post# of 7475
There has been a lot of discussion on the 5BARz message board lately about how income will be shared between 5BARz and CelLynx if the Network Extender product sales take off. Some have argued that CelLynx is entitled to 40%.

My response, documented by the relevant SEC filings, clearly shows that this statement regarding CYNX share of profits equaling 40% is false. For the benefit of the investors who read this message board I am going to re post my rebuttal which appeared on the 5BARz message board. While the news for CelLynx shareholders is not good, it is better to know the facts than not.


From a post of mine made on the 5BARz message board:


CelLynx Group is not entitled to 40% of 5BARz net income. During my first conversation with Mr. Bland over a year ago, I asked him about the CelLynx arrangement. After hearing his answer and studying the SEC filings, I managed to plow through the complexities that only a forensic accountant would love.

Part 1, Jan. 5th, 2011


5Barz International, Inc. has entered into an exclusive, international, marketing and distribution agreement with CelLynx Group Inc, a winner of the International CES Innovations 2010 Design and Engineering Awards for its new, patent pending 5Barz cellular network extenders. 5Barz International, Inc. acquired a 50% interest in that technology and aspires to service an international marketplace of some 4.8 billion mobile phone users.




At this point we have a 50% split under a marketing agreement between 5BARz and CelLynx for which CelLynx was compensated.



Part 2, March 29th, 2012

5BARz International, Inc. acquired a 60% interest in the patents and trademarks held by CelLynx Group Inc., referred to as the “5BARz™” technology. That interest in the technology was acquired for proceeds comprised of 9,000,000 shares of the common stock of the Company, valued at the date of acquisition at $0.20 per share or $1,800,000 USD. The acquisition agreement also clarified that the ownership interest in the intellectual property does represent that proportionate interest in income earned from the intellectual property.




At this point 5BARz now owns 60% of CelLynx's 50% split in Part 1 above, for which CelLynx received additional compensation. So far Cellynx is now entitled to 40% of 50% or 20% of net income.



Part 3, also on March 29th, 2012

On March 29, 2012, the Company acquired a further interest in CelLynx Group, Inc. by conversion of $73,500 of convertible debt in CelLynx Group, Inc for the issuance of 350,000,000 shares in the capital stock of CelLynx Group, Inc. As a result, in combination with the shares acquired from existing shareholders referred to above, the registrant acquired a 60% controlling interest in CelLynx Group, Inc. and has accounted for that acquisition as a consolidated subsidiary of the registrant effective March 29, 2012.




At this point 5BARz now owns 60% of the actual company CelLynx, not just part of the IP or an exclusive marketing agreement for which CelLynx received additional compensation. That means that CelLynx shareholders now have only a 40% claim on the 20% share of net income from Part 2 above equaling 8% of the total.

Part 4 Dec 31st, 2014

At December 31, 2014, the Company holds 1,489,745,971 shares of the capital stock of CelLynx Group, Inc. and has a balance of $ 2,865,032 principle and interest due under the line of credit facility from CelLynx Group, Inc



the note and accrued interest are convertible into common stock at a variable conversion price equal to 51% of the average of the three lowest closing bid prices for CelLynx Group, Inc’s common stock for a period of 10 days prior to the date of notice of conversion. As of March 31, 2015 the note is past due.



In other words, CelLynx owes 5BARz nearly 3 million dollars. This debt is convertible into Cellynx shares at a 51% discount to CelLynx's bid price (today's bid as I re-post this is .0001, which I will use in my calculations). At no additional cost to themselves, 5BARz could convert the $2,865,032 owed to them by CelLynx (currently in default) into roughly 57,306,400,000 shares. If you add the 1,489,745,971 shares of CelLynx already owned by 5BARz to that total it comes to approx. 59 billion shares. Approx. 1 billion shares will be left outstanding (not owned by 5BARz). Because of this massive dilution those 1 billion shares will then represent 1/60 or 1.7% of the total shares outstanding. Collectively they are entitled to 1.7% of the 20% of income from part 2 above or .017 x .2 = .0034 or approx. three eighths of 1% of 5BARz profits. Once 5BARz converts 5BARz shareholders will be entitled to well over 99.5% of the future income.

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