obsidian v, I will try to add some clarity to my post using quotations from 5BARz SEC filings which can be found on their website.
The following quotes are pulled from the Master Global Marketing and Distribution Agreement:
The language concerning "the sellers right,title, and interest" is part of the key to understanding how the sale of the IP later on will affect CelLynx share of income. Obviously, the seller must own what he is selling to be able to receive compensation for it. In other parts of the "Agreement" the compensation is referred to as a royalty. This royalty is for allowing 5BARz to reap the rewards from selling any product that is produced using CelLynx's 100% owned intellectual property. At this point CelLynx is entitled to 50% of net income from sale of 5BARz products arising from the IP.
Then about a year later this was announced:
Pay special attention to the section that I have highlighted in bold letters. This was added specifically to clarify the exact point which seemed kind of "foggy" to you. The outright purchase of 60% of the IP has entitled 5BARz to the proportionate interest in income without sharing any of that income with CelLynx.
Because CelLynx no longer owns all of the IP, they can only collect their 50% royalty on their 40% "right, title and interest" of the IP mentioned near the top of this post. This leaves CelLynx shareholders with 20% of net income at this point.
The most crushing blow to (non 5BARz) CelLynx shareholders will be the massive dilution of their holdings if the defaulted debt owed to 5BARz by CYNX is converted into CelLynx shares. This could reduce the remaining non 5BARz holders of CelLynx stock down to a fraction of 1% share of the income from any sales.
Though I know it is not what you want to hear, I hope this helps in assessing your investment.
P.S. Full disclosure - I am not an accountant. My reference was that "only a forensic accountant" would enjoy this. Not necessarily me. In Aug. of 2015 before I first posted this I vetted my findings thru 5BARz's Investor Relations (Alan Stamper) who in turn spoke with Mark Geoghegan CFO @ 5BARz.
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