5BARz International Inc. (fka BARZ)

[As I See It]

More fun with numbers. At the present time 5BARz has approx. 400 million fully diluted shares. The market price per share is approx. $0.08 resulting in a fully diluted market cap of approx. $32 million.

Recently 5BARz received a 5 million unit order, to be filled over the next 5 years, for its new WiFi product. To keep the math simple, let's assume that 1 million units are sold in the next year. If the net profit was a mere $32 per unit, 5BARz would earn $32 million, equaling its total market capitalization.

In other words 5BARz stock would be selling at 1 times earnings. How ridiculous is that???

Bear in mind, those numbers are for one order, from one company, of one product, in one country.

In my opinion, the only remaining hurdle for 5BARz is completion of the financing through Axis Capital. Based on the quote below it would seem to be a low hurdle.

Vasan Paulraj, Managing Director and Business Head – Financial Sponsors Group at Axis Capital, which serves as 5BARZ India’s Investment Banker, commented on today’s news, “This is one of the most significant deals in the Indian telecom industry in the last several years and the way that 5BARz India’s last mile connectivity is monetized is extremely innovative. The creativity of 5BARz management in structuring this deal exemplifies the qualities we look for in the executive teams of those technology companies with which we partner, and was the key to successfully closing this transaction. We are in the process of raising the capital required for this rollout and fully support 5BARz India in this endeavor.”

We don't know what the price of the WiFi units will be. We don't know what the net profit margins will be. We can make a guess though, based on what has been said about the Network Extender which is a very similar technology. Those are supposed to sell for $200 per unit with a large scale manufacturing cost of $50 yielding gross profit margins of 75%. Net profit margins could be in the 30% plus range or $60+. Based on that, the $32 net profit per unit for the WiFi product that I used above should be conservatively low.