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Document and Entity Information
9 Months Ended
Sep. 30, 2013
Nov. 18, 2013
Document And Entity Information
Entity Registrant Name
5Barz International, Inc.
Entity Central Index Key
0001454124
Document Type
10-Q
Document Period End Date
Sep. 30, 2013
Amendment Flag
false
Current Fiscal Year End Date
--12-31
Is Entity a Well-known Seasoned Issuer?
No
Is Entity a Voluntary Filer?
No
Is Entity's Reporting Status Current?
No
Entity Filer Category
Smaller Reporting Company
Entity Common Stock, Shares Outstanding
160,038,990
Document Fiscal Period Focus
Q3
Document Fiscal Year Focus
2013


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Condensed Consolidated Balance Sheets (USD $)
Sep. 30, 2013
Dec. 31, 2012
CURRENT ASSETS:
Cash
$ 143,754 $ 48,308
Prepaid expenses and deposits
61,075 22,156
TOTAL CURRENT ASSETS
204,829 70,464
Equipment, net
7,015 4,406
OTHER ASSETS:
Intangible assets
3,387,406 3,387,406
Goodwill
1,140,246 1,140,246
Total other assets
4,527,652 4,527,652
TOTAL ASSETS
4,739,496 4,602,522
CURRENT LIABILITIES:
Accounts payable and accrued expenses
2,562,262 2,445,410
Due to escrow agent
52,321 52,321
Accrued derivative liabilities
60,772
Notes payable (net of discount)
1,089,882 993,554
TOTAL CURRENT LIABILITIES
3,765,237 3,491,285
Related party loans
472 19,850
TOTAL LIABILITIES
3,765,709 3,511,135
STOCKHOLDERS' EQUITY
Common stock, $.001 par value, 250,000,000 shares authorized; 138,403,772 and 117,418,281 shares issued and outstanding as of September 30, 2013 and December 31, 2012, respectively
138,404 117,418
Capital in excess of par value
5,179,130 3,226,802
Deficit accumulated during the development stage
(4,989,290) (2,971,099)
Accumulated other comprehensive income
27,250 4,272
Non-controlling interest
618,293 713,994
Total stockholders' equity
973,787 1,091,387
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$ 4,739,496 $ 4,602,522


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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
Sep. 30, 2013
Dec. 31, 2012
Statement of Financial Position [Abstract]
Common stock, par value
$ 0.001 $ 0.001
Common stock, authorized
250,000,000 250,000,000
Common stock, issued
138,403,772 117,418,281
Common stock,outstanding
138,403,772 117,418,281


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Condensed Consolidated Statements of Operations (USD $)
3 Months Ended 9 Months Ended 59 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Income Statement [Abstract]
Sales
Cost of Sales
Selling general and administrative expenses:
Amortization and depreciation
495 831 1,623 2,689 6,196
Bank charges and interest
15,889 2,957 44,857 140,881 280,720
Sales and marketing expenses
36,514 7,871 127,882 94,635 472,295
Research & development
201,958 305,958 0 305,958
General and administrative expenses
770,506 332,403 1,753,912 1,507,354 4,388,309
Total operating expenses
1,025,362 344,062 2,234,231 1,745,559 5,453,477
(Loss) from operations
(1,025,362) (344,062) (2,234,231) (1,745,559) (5,453,477)
Other income (expense):
Interest income
(1,128) 1,212 16,666
Currency gains (losses)
(567)
Change in fair value of derivative liability
(1,346) (147,530) (52,594) (75,556) 577,492
Amortization of debt discount on derivative liability
(74,623) (92,288) (132,897)
Loss on termination of finance agreements
(152,676)
Other
86,060 172,933 (1,537) 169,797
Total Other income (expense)
84,715 (225,195) 120,339 (168,169) 477,815
Net (loss) before non-controlling interest
(940,647) (569,258) (2,113,892) (1,915,642) (4,975,662)
Non-controlling interest share of net loss
(4,577) 139 (95,701) 446,013 13,628
Net loss after non-controlling interest
(936,070) (569,397) (2,018,191) (2,361,655) (4,989,290)
Basic (loss) per common share
$ (0.0075) $ (0.0052) $ (0.0178) $ (0.0188)
Weighted average number of shares outstanding
125,414,735 108,607,401 118,545,298 102,081,180
Other comprehensive income
Foreign currency translation gain (loss)
11,227 (2,054) 22,979 (1,735)
Other comprehensive income
11,227 (2,054) 22,979 (1,735)
Comprehensive (loss)
$ (924,843) $ (571,451) $ (1,995,212) $ (2,363,390)


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Condensed Consolidated Statements of Cash Flows (USD $)
9 Months Ended 59 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
$ (2,113,892) $ (1,915,642) $ (4,975,662)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
1,623 2,689 5,612
Stock based compensation
515,123 522,236
Change in fair value of derivative liability
60,772 240,478 (480,678)
Change in debt discount on convertible notes
1,336,129 152,821
Change in warrant liability
5,120 14,968
Common shares issued for services
220,139 452,990 1,064,852
Changes in operating assets and liabilities:
Change in accounts payable and accrued expenses
319,260 506,279 891,747
Change in prepaid expenses and deposits
(38,920) 3,053 (41,700)
Change in unpaid interest and penalties on notes payable
(44,545) 91,507 342,096
Change in amount due to escrow agent
52,322
Net cash from (used in) operating activities
(1,080,440) (479,913) (2,451,387)
CASH FLOWS FROM INVESTING ACTIVITIES:
Deposit on investment in Cellynx
(170,000)
Cash in Cellynx - date of acquisition
3,260
Acquisition of intangible assets
(4,808)
Purchase of furniture and equipment assets
(3,103) (7,756)
Net cash used in investing activities
(3,103) (179,304)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments under line of credit agreement Cellynx
(83,156) (250,152)
Payment of amount due to Cellynx - intellectual property acquisition
(242,865)
Proceeds from issuance of convertible notes
35,000 258,500 442,139
Payments of amounts due to related party
(19,378) (97,612) (463,701)
Proceeds used to settle notes payable
(151,584) (95,942) (219,901)
Proceeds from issuance of common stock
1,196,750 279,628 3,106,597
Proceeds from issuance of common stock by subsidiary - 5BARz AG
95,222 221,615 375,078
Net cash provided by financing activities
1,156,010 483,033 2,747,194
Effect of foreign currency exchange
22,979 (1,735) 27,251
NET INCREASE IN CASH
95,446 1,385 143,754
CASH, BEGINNING OF PERIOD
48,308 49,209
CASH, END OF PERIOD
143,754 50,594 143,754
Supplementary disclosure of cash flow information
Cash paid for interest
13,374 15,534 70,194
NON-CASH INVESTING AND FINANCING ACTIVITIES
Common stock issued upon acquisition of Cellynx Group, Inc.
250,000 250,000
Settlement of prepaid deposit upon acquisition of Cellynx Group, Inc.
170,000 170,000
Fair market value of notes converted upon acquisition of Cellynx Group, Inc.
455,000 521,200
Fair market value of net assets acquired
875,000 875,000
Conversion of notes payable - Cellynx Group,Inc
7,200 81,000 76,200
Investment in Cellynx intellectual property for shares
1,800,000 1,800,000
Replacement of common shares acquired with a convertible note
80,000 80,000
Issuance of convertible note in lieu of accounts payable
147,428 147,428
Shares issued to settle interest on notes payable
7,500 7,500
Settlement of accounts payable with common stock
$ 31,250 $ 31,250


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Organization, Going Concern and Development Stage
9 Months Ended
Sep. 30, 2013
Notes to Financial Statements
Organization, Going Concern and Development Stage

Note 1 – Organization, Going Concern and Development Stage

  

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.

 

On December 29, 2010 the Company changed its name to 5BARz International, Inc. and on December 30, 2010, the Company acquired from CelLynx Group, Inc. the rights to certain intellectual property underlying the 5BARz products, a highly engineered wireless technology referred to as a “cellular network infrastructure device”. 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. On March 29, 2012, 5BARz International, Inc. acquired a 60% controlling interest in CelLynx Group, Inc.

 

On November 6, 2011, the Company incorporated a subsidiary Company in Zurich, Switzerland called 5BARz AG which is a 94.4% held subsidiary at September 30, 2013. This entity has been granted the license for the marketing and distribution rights for 5BARz products in Germany, Austria and Switzerland.

 

These financial statements reflect the financial position for the Company and its subsidiary companies 5BARz AG, CelLynx Group Inc. and its wholly owned subsidiary CelLynx Inc. as at September 30, 2013. Results of operations include those operations for subsidiaries acquired from the date of acquisition.  

 

Going concern

 

The accompanying 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 is a development stage company and has not commenced planned principal operations. As shown in the accompanying consolidated financial statements, the Company has incurred recurring losses for the period from November 14, 2008 (date of inception) through September 30, 2013 of $4,975,662. The Company has negative cash flows from operations since inception of $2,451,387 and has an accumulated deficit of $4,989,290 at September 30, 2013. The Company has made no revenue to date. 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 and commence its planned operations.

 

The Company is in default on certain notes payable. Accordingly, any penalties and interest has been accrued as of September 30, 2013 (see Note 7).

 

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.

 

Development stage

 

The Company is considered to be a development stage entity as defined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 915. The Company has been a development stage entity since November 14, 2008 its inception. The Company has not generated any revenues to date.



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Summary of significant accounting policies
9 Months Ended
Sep. 30, 2013
Accounting Policies [Abstract]
Summary of significant accounting policies

Note 2 - Summary of significant accounting policies

 

Basis of presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2013, are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K filed on May 13, 2013 for the fiscal year ended December 31, 2012.

 

The accompanying consolidated financial statements include the accounts of 5BARz International Inc., and its 94.4% owned subsidiary, 5BARz AG, and it’s 60% owned subsidiary CelLynx Group, Inc. and that Company’s 100% owned subsidiary CelLynx, Inc. All intercompany accounts and transactions have been eliminated in consolidation.

 

Use of estimates

 

The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include impairment analysis for long lived assets, income taxes, litigation and valuation of derivative instruments. Actual results could differ from those estimates.

 

Intangible assets

 

Acquired patented and unpatented technology, licensing rights and trademarks are capitalized at their fair value. The legal costs, patent registration fees, and models and drawings required for filing patent applications are capitalized if they relate to commercially viable technologies. Commercially viable technologies are those technologies that are projected to generate future positive cash flows in the near term. Legal costs associated with applications that are not determined to be commercially viable are expensed as incurred. All research and development costs incurred in developing the patentable idea are expensed as incurred. Legal fees from the costs incurred in successful defense to the extent of an evident increase in the value of the patents are capitalized.

 

Capitalized costs for patents are amortized on a straight-line basis over the remaining twenty-year legal life of each patent after the costs have been incurred. Once each patent or trademark is issued, capitalized costs are amortized on a straight-line basis over a period not to exceed 20 years and 10 years, respectively. All research and development costs incurred in developing the patentable idea are expensed as incurred. The licensing right is amortized on a straight-line basis over a period of 10 years. Based on its review, the Company concluded that as of September 30, 2013 and December 31, 2012 there was no impairment of its intangible assets.

 

Goodwill

 

Generally accepted accounting principles in the United States require the Company to perform a goodwill impairment test annually and more frequently when negative conditions or a triggering event arise. After an assessment of certain qualitative factors, if it is determined to be more likely than not that the fair value of a reporting unit is less than its carrying amount, entities must perform the quantitative analysis of the goodwill impairment test. Based on its review, the Company concluded that as of September 30, 2013 there was no impairment of its goodwill.

 

Foreign currency translation

 

Transactions in foreign currencies have been translated into US dollars using the temporal method. The functional currency of the Company’s subsidiary 5BARz AG, is its local currency (Swiss Franc – CHF). Under this method, monetary assets and liabilities are translated at the year-end exchange rate. Non-monetary assets have been translated at the historical rate of exchange prevailing at the date of the transaction. Expenses have been translated at the exchange rate at the time of the transaction. Realized and unrealized foreign exchange gains and losses are included in operations.

  

 

Fair value of financial instruments

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses and other current liabilities, approximate fair value due to the short-term nature of these instruments.

Fair value is defined as an exit price, representing the amount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction between market participants. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows:

 

  Level 1. Quoted prices in active markets for identical assets or liabilities.

 

  Level 2. Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly.

 

  Level 3. Significant unobservable inputs that cannot be corroborated by market data.

The assets or liability’s fair value measurement within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. The following table provides a summary of the assets that are measured at fair value on a recurring basis.

 

    Consolidated
Balance Sheet
  Quoted Prices in Active Markets for Identical Assets or Liabilities
(Level 1)
  Quoted Prices for Similar Assets or Liabilities in Active Markets
(Level 2)
  Significant
Unobservable
Inputs
(Level 3)
Derivative Liabilities:                
September 30, 2013   $ 60,772     $ —       $ —       $ 60,772  
December 31, 2012   $ —       $ —       $ —       $ —    

 

The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities that are measured at fair value on a recurring basis:

 

    September 30, 2013
Beginning balance   $ —    
Change in fair value of derivative liabilities     60,772  
Ending balance   $ 60,772  

  

The derivative conversion feature liabilities are measured at fair value using the Black-Scholes pricing model and are classified within Level 3 of the valuation hierarchy. The significant assumptions and valuation methods that the Company used to determine fair value and the change in fair value of the Company’s derivative financial instruments are provided below:

 

    September 30, 2013
Stock price   $ 0.14  
Volatility     240 %
Risk-free interest rate     0.04 %
Dividend yield     0 %
Expected life     0.002 years  

 

Level 3 liabilities are valued using unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the derivate liabilities. For fair value measurements categorized within Level 3 of the fair value hierarchy, the Company’s accounting and finance department, which reports to the Chief Financial Officer, determines its valuation policies and procedures. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s accounting and finance department with support from the Company’s consultants and which are approved by the Chief Financial Officer.

 

Level 3 financial liabilities consist of the derivative liabilities for which there is no current market such that the determination of fair value requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate.

  

 

The Company uses the Black-Scholes option valuation model to value Level 3 financial liabilities at inception and on subsequent valuation dates. This model incorporates transaction details such as the Company’s stock price, contractual terms, maturity, risk free rates, as well as, volatility.

 

As of September 30, 2013 there were no transfers in or out of Level 3 from other levels in the fair value hierarchy.

 

Derivative instruments

 

The Company evaluates its convertible instruments, options, warrants or other contracts to determine if those contracts or components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, “Derivatives and Hedging”. The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liability at the fair value of the instrument on the reclassification date.

 

Net loss per share

 

The Company reports loss per share in accordance with the ASC Topic 260, “Earnings Per Share.”, which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation.  In the accompanying financial statements, basic earnings per share of common stock is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period plus the issuance of common shares, if dilutive, that could result from the exercise of outstanding stock options and warrants. These potentially dilutive securities were not included in the calculation of loss per common share for the three and nine months ended September 30, 2013 or 2012 because their effect would be anti-dilutive. The weighted average number of shares outstanding does not include reciprocal shareholdings, held by the Company’s subsidiary, CelLynx Group, Inc. which is reflected as a reduction in capital in excess of par value on the Company’s balance sheet.

 

Stock Based Compensation

The Company reports stock-based compensation under ASC 718 “Compensation – Stock Compensation”. ASC 718 requires all share-based payments to employees, including grants of employee stock options, warrants to be recognized in the consolidated financial statements based on their fair values. The Company accounts for equity instruments issued to non-employees as compensation in accordance with the provisions of ASC 718, which require that each such equity instrument be recorded at its fair value on the measurement date, which is typically the date the services are performed. The Black-Scholes option valuation model is used to estimate the fair value of the warrants or options granted. The model includes subjective input assumptions that can materially affect the fair value estimates. The model was developed for use in estimating the fair value of traded options or warrants. The expected volatility is estimated based on the most recent historical period of time equal to the weighted average life of the warrants or options granted

 

Reclassifications

 

Certain reclassifications have been made in the financial statements at September 30, 2012 and for the three and nine months then ended to conform to the September 30, 2013 presentation. The reclassifications had no effect on net loss.

 

Recent accounting pronouncements

 

 

FASB, the Emerging Issues Task Force and the SEC have issued certain other accounting standards, updates, and regulations as of September 30, 2013 that will become effective in subsequent periods; however, management does not believe that any of those updates would have significantly affected our financial accounting measures or disclosures had they been in effect during 2013 or 2012, and it does not believe that any of those pronouncements will have a significant impact on our consolidated financial statements at the time they become effective.

 



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Acquisition of CelLynx Group, Inc.
9 Months Ended
Sep. 30, 2013
Notes to Financial Statements
Acquisition of CelLynx Group, Inc.

Note 3 – Acquisition of CelLynx Group, Inc.

 

On January 7, 2011 the Company entered into a stock purchase agreement with two founding shareholders of CelLynx Group, Inc. to acquire in aggregate 63,412,638 shares of the capital stock of CelLynx Group, Inc. for total proceeds of $634,126. At that date the Company had paid $170,000 as a deposit made under that agreement. On March 29, 2012 the Company entered into a securities exchange agreement and settlement agreement with each of the two founding shareholders of CelLynx Group, Inc. whereby in addition to the $170,000 paid, the Company issued 1,250,000 shares of its common stock in exchange for the 63,412,638 shares of CelLynx Group, Inc. and mutual releases were signed between the parties releasing each from any further obligation.

 

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.

 

The purchase price, which was settled in cash, shares, and the settlement of convertible debt was $875,000, as follows:

 

i.   Cash consideration paid   $ 170,000  
ii.   1,250,000 common shares of the registrant issued at a market price of $0.20 per share     250,000  
iii.   Redemption of convertible debt for 350 million shares of CelLynx Group Inc. common stock     455,000 (a)
Fair market value of consideration paid   $ 875,000  

 

  (a) The valuation of the debt instrument with an embedded conversion feature is calculated at the face value of the debt instrument of $73,500 plus the intrinsic value attributable to the conversion of the debt instrument at a 75% discount to market, based upon the lowest 3 closing bid prices of the common stock for a period of 30 days prior to the date of conversions. That intrinsic valuation is calculated to be $ 381,500. The amounts recognized for each class of the acquiree’s assets and liabilities recognized at the acquisition date, March 29, 2012 are as follows:

 

The amounts recognized for each class of the acquiree’s assets and liabilities recognized at the acquisition date, March 29, 2012 are as follows;

 

Description   Net book value of CelLynx Group, Inc. consolidated assets and liabilities   Acquisition
Adjustments (i) (ii)
  Valuation attributed to assets acquired
Current assets   $ 3,260             $ 3,260  
Patented and unpatented technology, trademarks, and license     44,718     $ 1,155,282 (ii)     1,200,000  
Investment in 5BARz   (iii)     1,800,000               1,800,000  
Furniture and equipment     2,113               2,113  
Accounts payable and accruals     (1,752,628 )             (1,752,628 )
Notes payable (net of discount)     (403,076 )             (403,076 )
Accrued interest     (62,250 )             (62,250 )
Derivative liability     (5,495,425 )     5,026,093 (i)     (469,332 )
LOC payable – 5BARz (net)     (586,525 )     586,525 (i)     —    
Fair value non-controlling interest             (583,333 )     (583,333 )
Totals   $ (6,449,813 )   $ 6,184,567       (265,246 )
Goodwill                     1,140,246  
Purchase price                   $ 875,000  

 

  (i) In determining the fair value of assets acquired, the Company eliminated the convertible debt owed to 5BARz and the derivative liability attributed to that debt.
  (ii) Fair value of technology, trademarks and license.
  (iii) Eliminates in consolidation

 

On April 13, 2012 the Company exercised $7,700 under the terms of the convertible line of credit agreement with CelLynx Group, Inc. to acquire a further 51,333,333 shares in the capital stock of CelLynx Group, Inc. On May 15, 2012 the Company exercised a further $58,500 to acquire a further 390,000,000 shares and on May 21, 2013 the Company acquired 375,000,000 shares on the conversion of $9,375 under the convertible line of credit agreement. Each conversion increased the percentage ownership that the Company holds in CelLynx Group, Inc. to a 60% interest, subsequent to dilution arising from 3rd party convertible note conversions. At September 30, 2013 the Company had a 60% equity ownership in CelLynx Group, Inc.



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Investment in 5BARz AG
9 Months Ended
Sep. 30, 2013
Notes to Financial Statements
Investment in 5BARz AG

Note 4 – Investment in 5BARz AG

 

On October 6, 2011, the Company incorporated a subsidiary Company under the laws of Switzerland, in the Canton of Zurich, called 5BARz AG. 5BARz AG issued 10,000,000 common shares of which 5,100,000 are held by the Company, 450,000 are held by officers and a consultant to the Company and 4,450,000 were held in escrow for resale, by an independent escrow agent under the control of the Company. 5BARz AG issued the shares with a stated or par value of CHF 0.01 per share for proceeds of CHF 100,000 (US - $108,752). The net proceeds received on re-sale above the stated or par value of the shares, is paid into 5BARz AG as additional paid in capital. During the period from inception (October 6, 2011) to September 30, 2013, sales of those securities aggregated 122,000 shares sold for proceeds of $366,000 CHF ($372,728 USD). At September 30, 2012 the Company holds a 94.3% controlling interest in 5BARz AG represented by 9,428,000 shares. During the 9 month period ended September 30, 2013 the Company sold 30,000 of the securities that it holds in 5BARz AG and the controlling interest in 5BARz AG was reduced by 0.3% to a 94.3% controlling interest.

 

On October 19, 2011, the registrant, 5BARz International Inc. entered into a Marketing and Distribution agreement with 5BARz AG, through which 5BARz AG holds the exclusive rights for the marketing and distribution of products produced under the 5BARz brand for markets in Switzerland, Austria and Germany. That agreement does not have a royalty payment requirement, and remains effective as long as 5BARz AG is controlled by the Company. 5BARz AG is a consolidated subsidiary of the Company in these financial statements.



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Intangible assets and goodwill
9 Months Ended
Sep. 30, 2013
Notes to Financial Statements
Intangible assets and goodwill

Note 5 – Intangible assets and goodwill

  

Intangible assets are comprised of patented and unpatented technology, trademarks and license rights which are recorded at cost, comprised of legal fees and acquisition costs. Once each patent or trademark is issued, capitalized costs are amortized on a straight-line basis over a period not to exceed 20 years and 10 years, respectively. License rights are amortized over the period of the respective license agreement.

 

      September 30, 2013     December 31, 2012
Patented and unpatented technology   $ 3,015,794   $ 3,015,794
Marketing and distribution agreement     370,000     370,000
Trademarks     264     264
License rights     1,348     1,348
    $ 3,387,406   $ 3,387,406
Accumulated amortization           —  
Patents and other intangibles, net   $ 3,387,406   $ 3,387,406

 

 

During the nine months ended September 30, 2013 and year ended December 31, 2012 no amortization has been recorded on technology and other intangibles. The intangible assets acquired on December 29, 2011 related to the 5BARz technology will commence amortization with the initial commercial production (commercial viability) of products incorporating the related technology. The Company’s estimated patented and unpatented technology amortization over the next five years is expected to be $886,998.

 

Marketing and distribution agreement will commence amortization with the initial commercial production of products. Trademark and license amortization is calculated straight line over a 10 year period. The Company’s estimated amortization on trademarks and licenses over the next five years is expected to be $806 and $806 for the remaining life of those assets.

 



v0.0.0.0
Common Stock
9 Months Ended
Sep. 30, 2013
Notes to Financial Statements
Common Stock

Note 6 – Common Stock

Since its inception, the Company has issued shares of common stock as follows:

On November 14, 2008, the Companies Directors authorized the issuance of 7,100,000 founder shares at par value of $0.001. These shares are restricted under rule 144 of the Securities Exchange Commission.

On various days in December 2008, our Directors authorized the issuance of 1,776,100 shares of common stock at a price of $0.01 per share as fully paid and non-assessable to the subscriber. These shares are not restricted and are free trading.

On November 15, 2010, our Directors initiated a forward stock split of 18:1 and increased the authorized shares from 100,000,000 to 250,000,000

On December 30, 2010, the Directors approved the cancellation of 87,800,000 shares of common stock.

On December 31, 2010, the Directors issued 15,600,000 shares in conjunction with the acquisition of certain assets, more fully described in Note 9. 

 

On January 10, 2011 the Company issued 300,000 shares of common stock at a price of $1.00 per share for aggregate proceeds of $300,000.

 

On January 15, 2011 the Company issued 200,000 shares of common stock at a price of $1.00 per share for aggregate proceeds of $200,000.

 

On March 9, 2011 the Company issued 150,000 shares of common stock at a price of $1.00 per share for aggregate proceeds of $150,000.

 

On April 4, 2011 the Company issued 350,000 shares of common stock at a price of $1.00 per share for aggregate proceeds of $350,000.

 

On April 7, 2011 the Company issued 200,000 shares of common stock at a price of $1.00 per share for aggregate proceeds of $200,000.

 

On June 3, 2011 the Company issued 5,000 shares of common stock at a price of $0.70 per share for aggregate proceeds of $3,500.

 

On July 18, 2011 the Company issued 25,000 shares of common stock at a price of $1.00 per share for aggregate proceeds of $25,000.

 

On July 21, 2011 the Company issued 69,610 shares of common stock at a price of $0.20 per share for aggregate proceeds of $13,922.

 

On July 24, 2011 the Company issued 40,000 shares of common stock at a price of $0.50 per share for aggregate proceeds of $20,000.

 

On October 20, 2011 the Company issued 37,500 shares of common stock at a price of $0.20 per share for aggregate proceeds of $7,500

 

On November 8, 2011 the Company issued 200,000 shares of common stock at a price of $0.15 per share for aggregate proceeds of $30,000.

 

On December 7, 2011 the Company issued 75,000 shares of common stock at a price of $0.10 per share for services provided in the amount of $7,500.

 

On December 15, 2011 the Company issued 455,180 shares of common stock at a price of $0.10 per share for aggregate proceeds of $45,518.

 

On December 1, 2011 the Company issued 355,695 shares of common stock at a price of $0.20 per share for conversion of a Convertible Debenture Agreement, dated August 15,2011 for a principal amount of Fifty Thousand Euros (€50,000), which bears interest at a rate of 8.5%. The aggregate proceeds amounted to $67,513.

   

On December 19, 2011 the Company issued 150,000 shares of common stock at a price of $0.10 per share for aggregate proceeds of $15,000.

 

In December 2011, 5BARz AG sold 21,000 common shares with a par value of 0.01 per share, at a price of CHF 3.00 ($3.26 US) per share, for aggregate proceeds of CHF 63,000 (US – $75,840). The proceeds received have been credited to additional paid in capital in these consolidated financial statements.

 

On January 12, 2012 the Company issued 300,000 shares of common stock at a price of $0.10 per share for services for aggregate proceeds of $30,000.

 

On February 1, 2012 the Company issued 1,500,000 shares of common stock at a price of $0.10 per share for services for aggregate proceeds of $150,000.

 

On February 1, 2012 the Company issued 50,000 shares of common stock at a price of $0.10 per share for services for aggregate proceeds of $5,000.

 

On February 7, 2012 the Company issued 500,000 shares of common stock at a price of $0.10 per share for aggregate proceeds of $50,000.

 

On February 29, 2012 the Company issued 100,000 shares of common stock for services at a price of $0.4799 per share for aggregate proceeds of $47,990.

 

On February 29, 2012 the Company issued 200,000 shares of common stock for services at a price of $0.10 per share for aggregate proceeds of $20,000.

 

On March 6, 2012 the Company issued 433,334 shares of common stock at a price of $0.12 per share for aggregate proceeds of $52,000.

 

On March 7, 2012 the Company issued 150,000 shares of common stock at a price of $0.12 per share for aggregate proceeds of $18,000.

 

On March 20, 2012 the Company issued 333,334 shares of common stock at a price of $0.15 per share for aggregate proceeds of $50,000.

  

On March 22, 2012 the Company issued 170,000 shares of common stock at a price of $0.15 per share for aggregate proceeds of $25,500.

 

On March 26, 2012 the Company issued 50,000 shares of common stock at a price of $0.12 per share for aggregate proceeds of $6,000.

 

On March 29, 2012 the Company issued 9,000,000 shares of common stock at a price of $0.20 per share in payment to CelLynx Group, Inc. for a 60% for aggregate proceeds of $1,800,000. The shares were issued to acquire the 5BARz cellular technology rights. These consolidated financial statements do not reflect the shares as issued.

 

On March 29, 2012 the Company issued 1,250,000 shares of 5BARz common stock at a price of $0.20 per share for aggregate proceeds of $250,000, plus $170,000 cash, in payment to two founders of CelLynx Group Inc. for 63,412,638 common shares of CelLynx Group, Inc.

 

On April 2, 2012 the Company issued 250,000 shares of common stock for services, at a price of $0.12 per share for an aggregate value of $30,270.

  

On April 18, 2012 the Company issued 100,000 shares of common stock at a price of $0.15 per share for aggregate proceeds of $15,000.

 

On April 30, 2012 the Company issued 125,000 shares of common stock at a price of $0.12 per share for services for an aggregate value of $14,977.

 

On April 30, 2012 the Company issued 66,667 shares of common stock at a price of $0.15 per share for services for an aggregate value of $10,000.

 

On May 3, 2012 the Company issued 80,000 shares of common stock at a price of $0.10 per share for aggregate proceeds of $8,000.

 

On May 14, 2012 the Company issued 20,000 shares of common stock at a price of $0.10 per share for aggregate proceeds of $2,000.

 

On June 12, 2012 the Company issued 95,000 shares of common stock at a price of $0.10 per share for aggregate proceeds of $9,500.

 

On June 21, 2012 the Company issued 2,150,000 shares of common stock at a price of $0.10 per share for services for an aggregate value of $212,685.

 

On June 27, 2012 the Company issued 50,000 shares of common stock at a price of $0.10 per share for aggregate proceeds of $5,000.

 

On July 9, 2012 the Company issued 520,000 shares of common stock at a price of $0.10 per share for aggregate proceeds of $52,000.

 

On July 20, 2012 the Company issued 250,000 shares of common stock at a price of $0.20 per share for services for an aggregate value of $50,000.

 

On August 10, 2012 the Company issued 500,000 shares of common stock at a price of $0.05 per share for aggregate proceeds of $25,000.

 

On August 14, 2012 the Company issued 500,000 shares of common stock at a price of $0.05 per share for aggregate proceeds of $25,000.

 

On August 14, 2012 the Company issued 140,000 units at a price of $0.05 per unit for aggregate proceeds of $7,000. Each unit is comprised of one share and one warrant to acquire a second share at a price of $0.20 per share acquired, with a two year warrant term.

 

On September 5, 2012 the Company issued 100,000 units at a price of $0.05 per unit for aggregate proceeds of $5,000. Each unit is comprised of one share and one warrant to acquire a second share at a price of $0.20 per share acquired, with a two year warrant term.

 

On September 10, 2012 the Company issued 401,338 shares of common stock at a price of $0.0299 per share as partial conversion of a note payable in settlement of $12,000 due under that note.

 

On September 14, 2012 the Company issued 300,000 shares of common stock at a price of $0.05 per share for aggregate proceeds of $15,000.

 

On October 12, 2012 the Company issued 300,000 units at a price of $0.05 per unit for aggregate proceeds of $15,000. Each unit is comprised of one share and one warrant to acquire a second share at a price of $0.20 per share acquired, with a two year warrant term.

 

On October 26, 2012 the Company issued 100,000 shares of common stock at a price of $0.05 per share for aggregate proceeds of $5,000.

 

On December 7, 2012 the Company issued 3,300,824 shares of common stock at a price of $0.05 per share, for services with a total value of $165,041.

 

On December 12, 2012 the Company issued 400,000 units at a price of $0.05 per unit for aggregate proceeds of $20,000. Each unit is comprised of one share and one warrant to acquire a second share at a price of $0.20 per share acquired, with a two year warrant term. On December 17, 2012 the Company issued 1,200,000 units at a price of $0.05 per unit for aggregate proceeds of $60,000. Each unit is comprised of one share and one warrant to acquire a second share at a price of $0.20 per share acquired, with a two year warrant term. During the quarter ended March 31, 2013 the Company entered into an amending agreement with the unit holder and agreed to cancel the shares and warrants in lieu of the issuance of a convertible debenture.

 

On December 31, 2012 the Company issued 2,250,000 shares for services at a price of $0.05 per share, for a total value of $112,500.

 

On January 25, 2013 the Company issued 100,000 shares and warrants in settlement of accounts payable for services rendered in the amount of $5,000.

 

On February 12, 2013 the Company issued 125,000 shares of common stock at a price of $0.06 per share as partial settlement of $7,500 due under a note payable.

 

On February 15, 2013 the Company issued 1,440,000 shares of common stock at a price of $0.05 per share, for services with a total value of $72,000.

 

On February 26, 2013 the Company issued 250,000 shares of common stock at a price of $0.04 per share, for services with a total value of $10,000.

 

On February 26, 2013 the Company issued 91,780 shares of common stock at a price of $0.05 per share, for services with a total value of $4,589.

 

On March 1, 2013 the Company issued 175,000 shares of common stock at a price of $0.05 per share, for services with a total value of $8,750.

 

On March 1, 2013 the Company issued 600,000 shares of common stock at a price of $0.05 per share, for aggregate proceeds of $30,000. 

 

On March 17, 2013 the Company issued 513,827 shares of common stock at a price of $0.05 per share, for services with a total value of $25,691.

 

On March 31, 2013 the Company issued 100,000 shares of common stock at a price of $0.05 per share, for services with a total value of $5,000.

 

On various days during the period from January 1, 2013 to June 30, 2013 the Company issued 11,735,000 units at a price of $0.05 per unit for aggregate proceeds of $586,750. Each unit is comprised of one share and one share purchase warrant to acquire a second share at a price of $0.20 per share acquired, with a two year warrant term.

  

On April 1, 2013 the Company issued 425,000 shares and warrants, with a two year term and $0.20 exercise price, in settlement of accounts payable with a total value of $21,250.

 

On April 10, 2013 the Company issued 600,000 shares of common stock at a price of $0.05 per share, for aggregate proceeds of $30,000.

 

On May 15, 2013 the Company issued 200,000 shares of common stock at a price of $0.05 per share for services with a total value of $10,000.

 

On May 23, 2013 the Company issued 200,000 shares and warrants, with a two year term and $0.20 exercise price, in settlement of accounts payable with a total value of $10,000.

 

On May 28, 2013 the Company issued 100,000 shares of common stock at a price of $0.05 per share, for services with a total value of $5,000.

 

On July 1, 2013 the Company issued 331,200 shares and warrants, with a two year term and $0.20 exercise price, for services with a total value of $66,240.

 

On various days during the period July 25, 2013 to November 18, 2013 the Company issued 27,213,904 units at a price of $0.10 per unit for an aggregate amount of $2,721,390. Of that amount, $2,116,980 was paid in cash and $604,410 was paid by way of settlement of accounts payable and notes payable. Each unit is comprised of one share and one share purchase warrant to acquire a second share at a price of $0.30 per share acquired, with a two year term on the attached warrant. The private placement includes proceeds of $1,566,980 which was raised subsequent to September 30, 2013, and is not included in the balance sheet at September 30, 2013.

 



v0.0.0.0
Convertible Securities
9 Months Ended
Sep. 30, 2013
Notes to Financial Statements
Convertible Securities

Note 7 – Convertible Securities

Convertible Promissory Notes 

 

5BARz International, Inc.
 
Issue Date
  Unpaid
Note Principal
  Note
Terms
  Unpaid
Interest & penalty
  Balance
September 30, 2013
  Balance
December 31, 2012
February 27, 2012  $—     (a)  $2,771   $2,771   $40,832 
May 3, 2012   42,500   (b)   9,380    51,880    67,131 
September 18, 2012   13,500   (c)   2,654    16,154    20,712 
February 3, 2012   30,000   (d)   112,649    142,649    207,500 
June 8, 2012   50,000   (d)   56,658    106,658    100,000 
December 17, 2012   80,000   (e)   5,032    85,032    —   
January 8, 2013   147,428   (f)   8,563    155,991    —   
Notes payable – 5BARz International Inc. $363,428     $197,707   $561,135   $436,175 

 

 

Cellynx Group Inc.
 
Issue Date
  Unpaid
Note Principal
  Note
Terms
  Unpaid
Interest & penalty
  Balance
September 30, 2013
  Balance
December 31, 2012
November. 10, 2007  $262,356   (g)  $61,844   $324,200   $316,693 
April 5, 2011   50,000   (h)   34,962    84,962    98,613 
January 5, 2012   50,000   (i)   31,948    81,948    80,438 
May 24, 2012   19,500   (j)   4,588    24,088    42,433 
September 12, 2012   12,500   (k)   1,049    13,549    19,202 
Notes payable Cellynx Group, Inc.  $394,356     $134,391   $528,747   $557,379 
Total  $757,784     $332,098   $1,089,882   $993,554 

 

 

(a)On February 27, 2012, 5BARz International Inc., completed a transaction pursuant to a Promissory Note agreement (the “February 27, 2012 Note”), through which the Company borrowed $37,500. The Note bears interest at a rate of 8%, and is due on November 29, 2012, (the “Due Date”).  The Company may settle that note within the first 90 days following the issue date by paying to the Lender 140% of the principal amount of the note plus accrued interest. The Company may settle the note during the period which is 91 days from the issue date of the note to 180 days from the issue date of the note by payment of 150% of the principal amount of the note plus accrued interest. In the event that the note is not repaid 180 days from the date of issue, the note and accrued interest are convertible into common stock at a variable conversion price equal to 55% of the average of the three lowest closing bid prices for the Company’s common stock for a period of 10 days prior to the date of notice of conversion. On September 10, 2012, the Company redeemed $12,000 payable on that note, by the issuance of 401,338 common shares at a price of $0.0299 per share. On January 4, 2013 the Company repaid $25,000 leaving a balance due of $2,771. That amount was paid in full on October 11, 2013 and the note was cancelled.
(b)On May 3, 2012, 5BARz International Inc., completed a transaction pursuant to a Promissory Note agreement (the “May 3, 2012 Note”), through which the Company borrowed $42,500. The proceeds were received by the Company on May 24, 2012. The Note bears interest at a rate of 8%, and is due on February 3, 2013, (the “Due Date”).  The Company may settle that note within the first 90 days following the issue date by paying to the Lender 140% of the principal amount of the note plus accrued interest. The Company may settle the note during the period which is 91 days from the issue date of the note to 180 days from the issue date of the note by payment of 150% of the principal amount of the note plus accrued interest. In the event that the note is not repaid 180 days from the date of issue, the note and accrued interest are convertible into common stock at the option of the holder at a variable conversion price equal to 55% of the average of the three lowest closing bid prices for the Company’s common stock for a period of 10 days prior to the date of notice of conversion. The balance due under the note with accrued interest on September 30, 2013 was $51,880. That amount was paid in full on October 11, 2013 and the note was cancelled.

 

(c)On September 18, 2012, the Company completed a transaction pursuant to a Promissory Note agreement (the “September 18, 2012 Note”), through which the Company borrowed $13,500. The Note bears interest at a rate of 8%, and is due on March 17, 2013, (the “Due Date”).  The Company may settle that note within the first 90 days following the issue date by paying to the Lender 140% of the principal amount of the note plus accrued interest. The Company may settle the note during the period which is 91 days from the issue date of the note to 180 days from the issue date of the note by payment of 150% of the principal amount of the note plus accrued interest. In the event that the note is not repaid 180 days from the date of issue, the note and accrued interest are convertible at the option of the holder into common stock at a variable conversion price equal to 55% of the average of the three lowest closing bid prices for the Company’s common stock for a period of 10 days prior to the date of notice of conversion. The amount due under the note agreement along with accrued interest on September 30, 2013 was $16,154. That amount was paid in full on October 11, 2013 and the note was cancelled.

 

  (d) In January 2012, the Company negotiated potential agreements for a convertible debenture and an equity investment agreement with a private investment firm (La Jolla). On February 3, 2012 the investment firm advanced $100,000, and on June 8, 2013 they advanced $50,000 to the Company. As contemplated, the convertible debenture agreement provided that the investor could invest up to $500,000 and convert the principal and unpaid interest into a certain number of shares, 180 days from the date of the agreement. The equity investment agreement provided to Holder the right, from time to time during the term of the Agreement, to invest in the Company through the purchase of up to $5,000,000 of the Company’s Common Stock. Each purchase under this Agreement was to be made at 150% of the “Volume Weighted Average Price” (VWAP) on the day prior to the day the investment is made (the “Purchase Price”). Beginning on the date that is one hundred eighty (180) days following the Issue Date, Holder shall have the right to purchase Common Stock under this Agreement. Provided the VWAP is above $0.06, Holder shall purchase a minimum of $50,000 per month beginning two hundred ten (210) days from the Issue Date.

On August 2, 2012 and August 13, 2012, the Company received conversion notices that materially conflict with the parties’ negotiations and the terms of the agreement. The Company offered to repay the amounts invested along with accrued interest and additional share compensation, but arrived at no settlement.

On October 16, 2012, the investment firm filed a complaint in the federal court for the Northern District of California claiming breach of contract and seeking compensatory damages and alleged loss of profits of in excess of $2,500,000, based upon their $150,000 investment made under the putative agreements. La Jolla Cove Investors, Inc. v. 5BARz International, Inc., 3:12-CV-5333 (N.D. Cal.). On November 8, 2012, the Company filed an answer, affirmative defenses, and counterclaims, against the plaintiff. On January 3, 2013, the Company entered into a settlement agreement requiring payments in the aggregate amount of $300,000 yielding interest at 9%, and the issuance of 125,000 shares of the common stock of the Company. The Company issued the 125,000 shares on February 12, 2013. On March 13, 2013, an order granting entry of stipulated judgment was granted to La Jolla Cove Investors for payment by the Company of the $300,000 plus interest at 9%. The $300,000 along with 9% interest aggregated $319,307 and has been accrued at September 30, 2013. During the nine months ended September 30, 2013 the Company repaid $70,000, leaving a balance of $249,307 payable at September 30, 2013. Subsequent to September 30, 2013 the Company paid $50,000 on October 23, 2013 and $50,000 on November 12, 2013, leaving a residual balance due of $149,307.

(e)In December 2012, a shareholder purchased 1,600,000 common shares for $80,000. The Company included the shares in issued and outstanding shares as of December 31, 2012, but the investor never took possession of the shares. On January17, 2013, the security was amended to a convertible debenture with an 8% per annum yield and may be converted into common stock, 90 days after the inception of the agreement, at a price which is a 20% discount to market, but not less than $0.05 per share.  During the nine month period to September 30, 2013, interest of $5,032 was accrued on the convertible debenture. In connection with the convertible debt, the Company recorded $21,440 of derivative liability as of September 30, 2013.

 

(f)On January 8, 2013 the Company entered into a convertible debenture agreement with a consultant in settlement of $147,428 payable to that consultant for services rendered. The convertible debenture yields interest at 8% per annum and may be converted into common stock, 90 days after the inception of the agreement, at a price which is a 20% discount to market, but not less than $0.05 per share.  During the nine month period to September 30, 2013, interest of $8,563 was accrued on the convertible debenture. In connection with the convertible debt the Company recorded $39,332 of derivative liability as of September 30, 2013.

 

(g)On August 15, 2006, CelLynx, Inc. issued a secured promissory note (the “August 2006 Note”) for $250,000 to an unrelated entity “Holder”.  On November 10, 2007, the August 2006 Note was amended (the “Amended Note”).  At the date of the amendment, the Company was obligated to pay to the Holder $262,356 which represented the principal and accrued interest. In contemplation of the completion of the reverse merger, the Company and the holder reached an agreement whereby this Amended Note superseded the August 2006 Note.  The principal amount of the Amended Note is $262,356, is unsecured and bears interest at 4% per annum, computed on the basis of the actual number of days elapsed and a year of 365 days.  All unpaid principal, together with any then accrued but unpaid interest, shall be due and payable upon the earlier of (i) November 9, 2010 at the written request of the holder to the Company, or (ii) when, upon or after the occurrence of an event of default. The principal amount is convertible into 4.8% of the Company shares outstanding. On August 2, 2013 the Company entered into a settlement and release agreement with the holder of the unsecured promissory note, which required a payment by the Company on or before September 15, 2013 in the amount of $27,500, for the settlement of the full amount of the note payable in the principal amount of $262,356. On October 24, 2013, the parties agreed to settle the debt by issuance of 275,000 units at a price of $0.10 per unit with each unit comprised of one (1) common share of 5BARz and one share purchase warrant at $0.30, exercisable for a period of two years. At September 30, 2013, the note payable was carried at an amount of $324,200.

 

(h)On April 5, 2011, CelLynx Group, Inc. entered into a Securities Purchase Agreement with a former director of CelLynx Group, Inc., in connection with the purchase of a Convertible Promissory Note. Pursuant to the convertible note agreement the former director loaned to CelLynx Group, Inc. the principal amount of $50,000. The Note bears interest at a rate of 8%, and was due on January 5, 2012. Pursuant to the terms of the note, the principle and accrued interest could have been converted into shares of the Company’s common stock, with the number of shares issuable determined by dividing the amount to be converted by the conversion price which is equal to 63% of the average of the three lowest trading prices of the Company’s common stock over the ten trading days prior to the date of the conversion. On November 8, 2013, the parties agreed to settle the note principle and accrued interest by issuance of 603,780 units at a price of $0.10 per unit with each unit comprised of one (1) common share of 5BARz and one share purchase warrant at $0.30, exercisable for a period of two years. At September 30, 2013, the note payable and accrued interest was carried at an amount of $84,962.

 

(i)On January 5, 2012, CelLynx Group, Inc. issued a note in the amount of $50,000, by way of settlement of certain debts owed by the Company to Holder. The Note bears interest at a rate of 8%, and was due on July 3, 2012. Holder may convert principal and unpaid interest on the note into shares of the Company’s common stock, with the number of shares issuable determined to be the amount obtained by dividing the amount to be converted by the conversion price which is the lesser of $0.0013 per share or 63% of the average of the three lowest trading prices of the Company’s common stock over the ten trading days prior to the date of the conversion. On June 5, 2013 the Company entered into a settlement agreement with the holder of the convertible promissory note whereby it was agreed that provided that the Company made a payment of $35,000 on or before September 15, 2013, that the principal balance and accrued penalties and interest on the note and other accounts payable due to the creditor aggregating $170,000 will be settled in full. That cash payment was not made. On October 25, 2013 the parties agreed to settle the note principle and accrued interest and other payables aggregating by issuance of 440,000 units at a price of $0.10 per unit with each unit comprised of one (1) common share of 5BARz and one share purchase warrant at $0.30, exercisable for a period of two years. At September 30, 2013, the note payable and accrued interest was carried at an amount of $81,948.

 

(j)On May 24, 2012, CelLynx Group, Inc., completed a transaction pursuant to a Promissory Note agreement, through which the Company borrowed $37,500. The Note bears interest at a rate of 8%, and is due on November 24, 2012, (the “Due Date”).  The Company may settle that note within the first 90 days following the issue date by paying to the Lender 140% of the principal amount of the note plus accrued interest. The Company may settle the note during the period which is 91 days from the issue date of the note to 180 days from the issue date of the note by payment of 150% of the principal amount of the note plus accrued interest. In the event that the note is not repaid 180 days from the date of issue, 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. The Company redeemed $18,000 payable on that note, by the issuance of CelLynx Group, Inc. common shares. The note principle and accrued interest outstanding at September 30, 2013 was $24,088.

 

(k)On September 12, 2012, CelLynx Group, Inc., completed a transaction pursuant to a Promissory Note agreement, through which the Company borrowed $12,500. The Note bears interest at a rate of 8%, and is due on March 12, 2013, (the “Due Date”).  The Company may settle that note within the first 90 days following the issue date by paying to the Lender 140% of the principal amount of the note plus accrued interest. The Company may settle the note during the period which is 91 days from the issue date of the note to 180 days from the issue date of the note by payment of 150% of the principal amount of the note plus accrued interest. In the event that the note is not repaid 180 days from the date of issue, 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. The note was carried at $13,549 comprised of principle and interest due at September 30, 2013.

Subsequent to year end, December 31, 2012 the Company had received a notice of default on notes entered into with the lender. Accordingly all notes to the lender had been recorded at the default amount at December 31, 2012 as the result of a cross default provision in the agreements. The Company accrued a default penalty of 50% of the notes payable as well as default interest at 22% per annum from the date of default.

 



v0.0.0.0
Options and Warrants
9 Months Ended
Sep. 30, 2013
Options And Warrants
Options and Warrants

Note 8 – Options and Warrants

Options – 5BARz International Inc.

 

Number of

Options

 

Weighted Average

Exercise Price

 

Average Remaining

Contractual Life

 
Outstanding at December 31, 2012     0   $ 0.0      
Granted   4,000,000     0.10      
Exercised            
Cancelled            
Outstanding at September 30, 2013   4,000,000   $ 0.10     2.63  
Exercisable at September 30, 2013   4,000,000   $ 0.10     2.63  

 

On May 17, 2013 the Company established the 2013 stock incentive plan for the Company. On that date 4,000,000 stock options were issued to officers of the Company to acquire common stock at a price of $0.10 per share. The Company reports stock-based compensation under ASC 718 “Compensation – Stock Compensation”. ASC 718 requires all share-based payments to employees, including grants of employee stock options, warrants to be recognized in the consolidated financial statements based on their fair values. The Company amortizes the fair value of employee stock options on a straight-line basis over the requisite service period of the awards.  The Company accounts for equity instruments issued to non-employees as compensation in accordance with the provisions of ASC 718, which require that each such equity instrument be recorded at its fair value on the measurement date, which is typically the date the services are performed. The Black-Scholes option valuation model is used to estimate the fair value of the warrants or options granted. At May 17, 2013, the Company measured the stock options issued at fair value using the Black-Scholes pricing model and are classified within Level 3 of the valuation hierarchy. The significant assumptions and valuation methods that the Company used to determine fair value and the change in fair value of the Company’s derivative financial instruments are provided below:

 

     
    May 17, 2013
Stock price   $ 0.097  
Volatility     225 %
Risk-free interest rate     0.04 %
Dividend yield     0 %
Expected life     3.0 years  

 

In addition to the stock options issued pursuant to the 2013 stock option plan as provided above, the Company granted 2,000,000 shares (valued at $160,000) to be provided to the CTO of the Company, to be vested over a period which is the sooner of (i) 12 months of engagement with the Company as CTO, or (ii) the successful completion of the beta test unit as specified in working with the Company’s collaborative partner, a multi-national wireless operator.

At May 17, 2013, the fair value of the options were determined to be $367,925 based upon the assumption provided above. The option valuations are being amortized over vesting terms ranging from 1-3 years. The stock commitment is being amortized over a one year vesting term. For the nine months ended September 30, 2013, $135,653 was amortized to expense. 

Warrants – 5BARz International Inc.

 

The following table summarizes the warrant activity to September 30, 2013:

 

Number of

Warrants

 

Weighted Average

Exercise Price

 

Average Remaining

Contractual Life

 
Outstanding at December 31, 2012     2,140,000   $ 0.20      
Granted   21,819,885     0.25      
Exercised            
Cancelled   1,600,000     0.20      
Outstanding at September 30, 2013   22,359,885   $ 0.25     1.71  
Exercisable at September 30, 2013   22,359,885   $ 0.25     1.71  

 

During the nine months ended September 30, 2013 the Company granted 21,819,885 warrants of which 17,194.885 were issued as part of a unit in various equity raises.

On September 1, 2013 the Company issued 4,625,000 warrants to a consultant of the Company to acquire common stock at a price of $0.20 per share. At September 1, 2013, the Company measured the warrants issued at fair value using the Black-Scholes pricing model and are classified within Level 3 of the valuation hierarchy. The significant assumptions and valuation methods that the Company used to determine fair value and the change in fair value of the Company’s derivative financial instruments are provided below:

    September 1, 2013
Stock price   $ 0.092  
Volatility     240 %
Risk-free interest rate     0.04 %
Dividend yield     0 %
Expected life     2.0 years  

 

At September 1, 2013, the fair value of the 4,625,000 warrants were determined to be $370,979 based upon the assumption provided above. For the period ended September 30, 2013, $370,979 was charged as an expense. 

 

Options – CelLynx Group, Inc.

  

At September 30, 2013, CelLynx Group Inc. has the following Options outstanding;

 

The number and weighted average exercise prices of all options and warrants exercisable as of September 30, 2013, are as follows:

 

CelLynx Group, Inc. - Options Exercisable

 

   

 

Options

  Weighted average
exercise price
  Weighted average remaining contract life
Opening at December 31, 2012     6,400,000     $ 0.0008       0  
Granted     65,000,000     $ 0.0002       4.5  
Expired     6,400,000       0.0008        0  
Outstanding at September 30, 2013     65,000,000     $ 0.0002       4.5  

  

On August 28, 2013, the Board of Directors of CelLynx Group, Inc. extended the terms and granted additional options to various former employees and directors. The options were expiring as a result of the termination of term of employment of each option holder. The Company has re-valued those options as a result of the significant change in terms thereof. At August 28, 2013, the Company measured the options issued at fair value using the Black-Scholes pricing model and are classified within Level 3 of the valuation hierarchy. The significant assumptions and valuation methods that the Company used to determine fair value and the change in fair value of the Company’s derivative financial instruments are provided below:

 

     
    August 28, 2013
Stock price   $ 0.0002  
Volatility     479 %
Risk-free interest rate     0.04 %
Dividend yield     0 %
Expected life     4.5 years  

 

The fair value of the options to purchase 65,000,000 shares of CelLynx common stock were determined to be $4,500 based upon the assumption provided above. The option valuations are being fully vesting at the date of issuance. For the period ended September 30, 2013, $4,500 was amortized to expense. 

Warrants – CelLynx Group, Inc.

 

The following table summarizes the warrant activity to September 30, 2013:

    Number of
Warrants
  Weighted Average
Exercise Price
  Average Remaining
Contractual Life
Outstanding at December 31, 2012     5,930,000     $ .79          
Granted                        
Exercised     —         —            
Expired     1,430,000       0.10          
Outstanding at September 30, 2013     4,500,000     $ 0.96       1.4  
Exercisable at September 30, 2013     4,500,000     $ 0.96       1.4  

 



v0.0.0.0
Related Party Transaction
9 Months Ended
Sep. 30, 2013
Notes to Financial Statements
Related Party Transaction

Note 9 - Related party transactions

On December 30, 2010 the Company acquired by way of an assignment agreement all right title and interest in a set of agreements from a Company of which the President and Director is also the President and Director of the reporting Company. The proceeds to be paid for that assignment agreement was comprised of a note payable in the amount of $370,000, and the issuance of 15,600,000 shares of common stock. That amount was paid in full along with interest at a rate of 5% per annum. That note payable was paid in full by June 30, 2012.   At September 30, 2013 the Company had a balance due to the related party in the amount of $472 (December 31, 2012 - $19,850).



v0.0.0.0
Commitments
9 Months Ended
Sep. 30, 2013
Commitments and Contingencies Disclosure [Abstract]
Commitments

Note 10 – Commitments

 

Lease Agreements

 

On  July 1, 2013, the Company entered into an office lease agreement for an office facility in New York, NY. The office lease provides for a monthly payment of $1,371. The lease term is 15 months ending September 30, 2014.

 

On July 24, 2013 the Company entered into a lease agreement in San Diego, which commenced on October 1, 2013. Pursuant to the terms of that lease, the Company s committed over a period of 39 months to minimum lease payments of $281,154.



v0.0.0.0
Litigation
9 Months Ended
Sep. 30, 2013
Commitments and Contingencies Disclosure [Abstract]
Litigation

Note 11 - Litigation

 

Prior to the Company’s investment in CelLynx, on November 8, 2011 CelLynx Group, Inc. was a Defendant in an action brought by Dophinshire L.P., a California Limited Partnership(“the Plaintiff”) regarding its office space in Mission Viejo, CA. That action has since been dismissed. On November 8, 2011, plaintiff brought suit against the Company for unlawful detainer of offices located at 25910 Acero, Suite 370, Mission Viejo, CA 92691 pursuant to a lease agreement, seeking an unspecified amount of damages not to exceed $25,000. The Company has engaged in settlement negotiations with the plaintiff and management expected to settle has since, by agreement, vacated the leased premises and continues to negotiate a payout of past due rent and penalties and has moved the general office to 4014 Calle Isabella, San Clemente, CA 92672. Past due rents have been included in accounts payable at September 31, 2013 and are subject to adjustments based on the outcome of negotiation.

 

 

On August 27, 2012, an action was brought against CelLynx Inc. and Does 1-10, in the Superior Court of California, El Dorado County, Case No. PCL20120700. On August 27, 2012, CSS Properties brought suit against CelLynx, Inc. for unlawful detainer of offices located at 5047 Robert J Matthews Parkway, El Dorado Hills, CA 95762 pursuant to a lease agreement, seeking damages of $24,699, legal fees of $3,000 and late charges of $2,041. The Company had by agreement, vacated the leased premises and continues to negotiate a payout of past due rent and penalties. Past due rents have been included in accounts payable at September 30, 2013 and are subject to adjustments based on the outcome of negotiation.

 

Prior to the Company’s investment in CelLynx, on July 19, 2010 certain claims for unpaid wages were filed against CelLynx. Judgments were obtained commencing in August 2011 for back wages by some of its former employees. Some of those claims have been partially paid and others were expected to be paid in the normal course of business or were to be otherwise defended. Those claims have now been incorporated into California Labor Commission awards in favor of those former employees. Those awards total approximately $263,023 depending on interest charges. It is the intention of Cellynx, Inc. to pay these amounts when proceeds are available.

 

On October 16, 2012, a complaint was filed in the federal court for the Northern District of California against 5BARz International Inc. and Does 1 - 10, claiming breach of contract and seeking compensatory damages and alleged loss of profits of in excess of $2,500,000, based upon a $150,000 investment made by LA Jolla Cove Investors under certain putative agreements. La Jolla Cove Investors Inc. v. 5BARz International, Inc., 3:12-CV-5333 (N.D. Cal.). On January 3, 2013, the Company and La Jolla Cove Investors, Inc. entered into an agreement for the settlement of the lawsuit for proceeds of $300,000 plus accrued interest from the date of the settlement agreement at a rate of 9%, plus the delivery of 125,000 shares of the common stock of the Company.

  

On January 13, 2013 a stipulation dismissing action without prejudice and without award of attorney’s fees or costs was entered. The Company issued the 125,000 shares but was unable to meet the payment schedule as provided in the settlement agreement. On March 8, 2013 as a result of the default, La Jolla Cove was awarded a judgment in the amount of $300,000 plus accrued interest at a rate of 9% from the date of the settlement agreement plus 125,000 shares which have been issued. On May 22, 2013 the Company made an initial repayment on the loan in the amount of $10,000. During the quarter ended September 30, 2013 the Company repaid $70,000, leaving a balance of $249,307 payable at September 30, 2013. Subsequent to September 30, 2013 the Company paid $50,000 on October 23, 2013 and $50,000 on November 12, 2013, leaving a residual balance due of $149,307.

 

On March 22, 2013 a complaint was filed in the Supreme Court of the State of New York, County of Nassau against 5BARz International Inc, Daniel Bland and James Vandeberg, by Asher Enterprises, Inc. claiming repayment of three Promissory notes in the principal amount of $81,000, penalties and interest. Asher Enterprises, Inc. vs. 5BARz International Inc., Daniel Bland and James Vandeberg 13-003472(County of Nassau). The claims allege that damages in the amount of the greater of; (i) 200% x $81,000, the remaining outstanding principal amount of the Note, together with accrued and unpaid interest in the unpaid principal amount of the Notes, plus default interest; or (ii) the “parity value” of the “default amount” paid in shares as defined in the terms of the agreements. On October 14, 2013 the lawsuit was settled by payment of $70,805.30, paid by the defendant on October 15, 2013.

 

On March 29, 2011, the Company’s subsidiary CelLynx Group, Inc. received a Cease Trading Order from the British Columbia Securities Commission (BCSC) alleging that the Company is in violation of the British Colombia reporting requirements. The BCSC assumed that since two the Company's Directors were domiciled in BC that the company is controlled out of BC and therefore subject to its reporting requirements. The Company denies that premise and is appealing the issuance of the CTO. The effect of the cease trade order was that Cellynx Group, Inc. shares could not be traded by British Columbia residents. At September 30, 2013, the Company’s sole Director is not domiciled in BC.

 

In addition to the above, the Company may become involved in legal proceedings in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance.



v0.0.0.0
Subsequent Events
9 Months Ended
Sep. 30, 2013
Notes to Financial Statements
Subsequent Events

Note 12 – Subsequent events

 

Issuance of Common Stock

 

During the period from October 1, 2013 to November 12, 2013, the Company sold the following equity securities;

 

On November 18, 2013 the Company completed a private placement in the aggregate amount of $2,721,390 by the issuance of 27,213,904 units at a price of $0.10 per unit for aggregate cash proceeds of $2,116,980 and shares issued to settle accounts payable and notes payable of $604,410. Each unit is comprised of one share and one warrant to acquire a second share at a price of $0.30 per share acquired, with a two year warrant term.  The cash proceeds received on this private placement after September 30, 2013 was $1,566,980 and the debt component settled after September 30, 2013 was $596,541.  

 

Settlement of Debts 

 

On September 30, 2013, the Company entered into an agreement with CelLynx Group, Inc. for the transfer of liabilities and notes payable in the aggregate amount of $1,440,768 to the Company under the Line of Credit agreement established between the Companies. During the period October 1 to November 18, 2013, the Company settled those liabilities by way of the issuance of $511,957 in securities comprised of the issuance of 5,119,574 units, at a price of $0.10 per unit. Each unit is comprised of one share and one share purchase warrant to acquire a share at a price of $0.30 per unit for a period of 2 years. In addition the Company settled accounts payable in the amount of $92,453 for units on the same terms. As a result, the Company incurred a gain of $928,811 on the settlement of debts.

 

Lease Agreement

 

On October 1, 2013 the Company commenced a lease agreement for a 4,337 square foot, Research and Development facility in San Diego, California. The facility lease provides for a monthly payment of $8,023. The lease term is 39 months ending December 31, 2016. The future minimum lease payments are $312,897 over the term of the lease.

 

Line of Credit Agreement

 

On September 30, 2013 5BARz International Inc. extended the terms of the line of credit agreement that had been entered into with CelLynx Group, Inc., prior to the maturity date of that agreement of October 5, 2013. In conjunction with the extension of that agreement, CelLynx transferred liabilities and notes payable in the aggregate amount of $1,440,768 to the Company under the Line of Credit agreement. This resulted in an aggregate funding under the terms of the Line of Credit agreement of $2,504,106 to date. The terms of the revised line of credit agreement remained unchanged except that the conversion rights were amended to be at 51% to market, and that the conversion privileges may be amended when the Company CelLynx Group, Inc. no longer have further 3rd party convertible notes

 

 

Pro-Forma Financial Information

 

The financial results reflected in the balance sheet of the Company at September 30, 2013, do not reflect certain debt settlements or the completion of the private placement which was in process at September 30, 2013 and referred to above. The below pro-forma Balance Sheet, integrates the completion of the private placement and debt settlement agreements which were subsequent to September 30, 2013.

 

 

5BARz INTERNATIONAL INC. AND SUBSIDIARIES          
( A Development Stage Company)          
CONDENSED CONSOLIDATED PRO-FORMA BALANCE SHEETS          
(Unaudited)          
    September 30, Adjustments   September 30,
    2013     2013
ASSETS         Pro-Forma
CURRENT ASSETS:          
Cash   $ 143,754   (i)         1,566,980   $ 1,710,734  
Prepaid expenses and deposits     61,075         61,075  
TOTAL CURRENT ASSETS     204,829         1,771,809  
                   
FIXED ASSETS:                  
   Equipment, net     7,015         7,015  
OTHER ASSETS:                  
Intangible assets     3,387,406         3,387,406  
  Goodwill     1,140,246         1,140,246  
Total other assets     4,527,652         4,527,652  
TOTAL ASSETS   $ 4,739,496       $ 6,306,476  
                   
LIABILITIES AND STOCKHOLDERS' EQUITY                  
                   
CURRENT LIABILITIES:                  
Accounts payable and accrued expenses   $ 2,562,262   (ii)    (1,018,823)   $ 1,543,439  
Due to escrow agent     52,321         52,321  
Accrued derivative liabilities     60,772         60,772  
Notes payable (net of discount)     1,089,882   (iii)       (514,398)     575,484  
TOTAL CURRENT LIABILITIES     3,765,237         2,232,016  
 Related party loans     472         472  
                   
TOTAL LIABILITIES     3,765,709         2,232,488  
                   
STOCKHOLDERS' EQUITY                  
Common stock, $.001 par value, 250,000,000 shares authorized;  160,117,625 shares issued and outstanding as of September 30, 2013 on a pro-forma basis     138,404    21,714     160,118  
Capital in excess of par value     5,179,130    2,149,676     7,328,806  
Deficit accumulated during the development stage     (4,989,290 ) (iv)           928,811     (4,060,479 )
Accumulated Other Comprehensive Income     27,250         27,250  
Non-controlling interest     618,293         618,293  
Total stockholders' equity     973,787         4,073,988  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 4,739,496       $ 6,306,476  

 

(i)Private placement proceeds received subsequent to September 30, 2012 - $1,566,980
(ii)Settlement of accounts payable for units $1,018,823
(iii)Settlement of notes payable for units $514,398
(iv)Gain on settlement of debts - $928,811

 



v0.0.0.0
Summary of significant accounting policies (Policies)
9 Months Ended
Sep. 30, 2013
Accounting Policies [Abstract]
Basis of Presentation

Basis of presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2013, are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K filed on May 13, 2013 for the fiscal year ended December 31, 2012.

 

The accompanying consolidated financial statements include the accounts of 5BARz International Inc., and its 94.4% owned subsidiary, 5BARz AG, and it’s 60% owned subsidiary CelLynx Group, Inc. and that Company’s 100% owned subsidiary CelLynx, Inc. All intercompany accounts and transactions have been eliminated in consolidation.

Use of estimates

Use of estimates

 

The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include impairment analysis for long lived assets, income taxes, litigation and valuation of derivative instruments. Actual results could differ from those estimates.

Intangible assets

Intangible assets

 

Acquired patented and unpatented technology, licensing rights and trademarks are capitalized at their fair value. The legal costs, patent registration fees, and models and drawings required for filing patent applications are capitalized if they relate to commercially viable technologies. Commercially viable technologies are those technologies that are projected to generate future positive cash flows in the near term. Legal costs associated with applications that are not determined to be commercially viable are expensed as incurred. All research and development costs incurred in developing the patentable idea are expensed as incurred. Legal fees from the costs incurred in successful defense to the extent of an evident increase in the value of the patents are capitalized.

 

Capitalized costs for patents are amortized on a straight-line basis over the remaining twenty-year legal life of each patent after the costs have been incurred. Once each patent or trademark is issued, capitalized costs are amortized on a straight-line basis over a period not to exceed 20 years and 10 years, respectively. All research and development costs incurred in developing the patentable idea are expensed as incurred. The licensing right is amortized on a straight-line basis over a period of 10 years. Based on its review, the Company concluded that as of September 30, 2013 and December 31, 2012 there was no impairment of its intangible assets.

Goodwill

Goodwill

 

Generally accepted accounting principles in the United States require the Company to perform a goodwill impairment test annually and more frequently when negative conditions or a triggering event arise. After an assessment of certain qualitative factors, if it is determined to be more likely than not that the fair value of a reporting unit is less than its carrying amount, entities must perform the quantitative analysis of the goodwill impairment test. Based on its review, the Company concluded that as of September 30, 2013 there was no impairment of its goodwill.

Foreign currency translation

Foreign currency translation

 

Transactions in foreign currencies have been translated into US dollars using the temporal method. The functional currency of the Company’s subsidiary 5BARz AG, is its local currency (Swiss Franc – CHF). Under this method, monetary assets and liabilities are translated at the year-end exchange rate. Non-monetary assets have been translated at the historical rate of exchange prevailing at the date of the transaction. Expenses have been translated at the exchange rate at the time of the transaction. Realized and unrealized foreign exchange gains and losses are included in operations.

Fair value of financial instruments

Fair value of financial instruments

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses and other current liabilities, approximate fair value due to the short-term nature of these instruments.

Fair value is defined as an exit price, representing the amount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction between market participants. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows:

 

  Level 1. Quoted prices in active markets for identical assets or liabilities.

 

  Level 2. Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly.

 

  Level 3. Significant unobservable inputs that cannot be corroborated by market data.

The assets or liability’s fair value measurement within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. The following table provides a summary of the assets that are measured at fair value on a recurring basis.

 

    Consolidated
Balance Sheet
  Quoted Prices in Active Markets for Identical Assets or Liabilities
(Level 1)
  Quoted Prices for Similar Assets or Liabilities in Active Markets
(Level 2)
  Significant
Unobservable
Inputs
(Level 3)
Derivative Liabilities:                
September 30, 2013   $ 60,772     $ —       $ —       $ 60,772  
December 31, 2012   $ —       $ —       $ —       $ —    

 

The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities that are measured at fair value on a recurring basis:

 

    September 30, 2013
Beginning balance   $ —    
Change in fair value of derivative liabilities     60,772  
Ending balance   $ 60,772  

  

The derivative conversion feature liabilities are measured at fair value using the Black-Scholes pricing model and are classified within Level 3 of the valuation hierarchy. The significant assumptions and valuation methods that the Company used to determine fair value and the change in fair value of the Company’s derivative financial instruments are provided below:

 

    September 30, 2013
Stock price   $ 0.14  
Volatility     240 %
Risk-free interest rate     0.04 %
Dividend yield     0 %
Expected life     0.002 years  

 

Level 3 liabilities are valued using unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the derivate liabilities. For fair value measurements categorized within Level 3 of the fair value hierarchy, the Company’s accounting and finance department, which reports to the Chief Financial Officer, determines its valuation policies and procedures. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s accounting and finance department with support from the Company’s consultants and which are approved by the Chief Financial Officer.

 

Level 3 financial liabilities consist of the derivative liabilities for which there is no current market such that the determination of fair value requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate.

  

 

The Company uses the Black-Scholes option valuation model to value Level 3 financial liabilities at inception and on subsequent valuation dates. This model incorporates transaction details such as the Company’s stock price, contractual terms, maturity, risk free rates, as well as, volatility.

 

As of September 30, 2013 there were no transfers in or out of Level 3 from other levels in the fair value hierarchy.

Derivative Instruments

Derivative instruments

 

The Company evaluates its convertible instruments, options, warrants or other contracts to determine if those contracts or components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, “Derivatives and Hedging”. The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liability at the fair value of the instrument on the reclassification date.

Net loss per share

Net loss per share

 

The Company reports loss per share in accordance with the ASC Topic 260, “Earnings Per Share.”, which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation.  In the accompanying financial statements, basic earnings per share of common stock is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period plus the issuance of common shares, if dilutive, that could result from the exercise of outstanding stock options and warrants. These potentially dilutive securities were not included in the calculation of loss per common share for the three and nine months ended September 30, 2013 or 2012 because their effect would be anti-dilutive. The weighted average number of shares outstanding does not include reciprocal shareholdings, held by the Company’s subsidiary, CelLynx Group, Inc. which is reflected as a reduction in capital in excess of par value on the Company’s balance sheet.

 

Stock-based Compensation

Stock Based Compensation

The Company reports stock-based compensation under ASC 718 “Compensation – Stock Compensation”. ASC 718 requires all share-based payments to employees, including grants of employee stock options, warrants to be recognized in the consolidated financial statements based on their fair values. The Company accounts for equity instruments issued to non-employees as compensation in accordance with the provisions of ASC 718, which require that each such equity instrument be recorded at its fair value on the measurement date, which is typically the date the services are performed. The Black-Scholes option valuation model is used to estimate the fair value of the warrants or options granted. The model includes subjective input assumptions that can materially affect the fair value estimates. The model was developed for use in estimating the fair value of traded options or warrants. The expected volatility is estimated based on the most recent historical period of time equal to the weighted average life of the warrants or options granted

 

Reclassifications

Reclassifications

 

Certain reclassifications have been made in the financial statements at September 30, 2012 and for the three and nine months then ended to conform to the September 30, 2013 presentation. The reclassifications had no effect on net loss.

Recent accounting pronouncements

Recent accounting pronouncements

 

FASB, the Emerging Issues Task Force and the SEC have issued certain other accounting standards, updates, and regulations as of September 30, 2013 that will become effective in subsequent periods; however, management does not believe that any of those updates would have significantly affected our financial accounting measures or disclosures had they been in effect during 2013 or 2012, and it does not believe that any of those pronouncements will have a significant impact on our consolidated financial statements at the time they become effective.

 



v0.0.0.0
Summary of Accounting Policies (Tables)
9 Months Ended
Sep. 30, 2013
Summary Of Accounting Policies Tables
Fair Value of Financial instruments Assets and Liabilities
    Consolidated
Balance Sheet
  Quoted Prices in Active Markets for Identical Assets or Liabilities
(Level 1)
  Quoted Prices for Similar Assets or Liabilities in Active Markets
(Level 2)
  Significant
Unobservable
Inputs
(Level 3)
Derivative Liabilities:                
September 30, 2013   $ 60,772     $ —       $ —       $ 60,772  
December 31, 2012   $ —       $ —       $ —       $ —    
Level 3 financial liabilities that are measured at fair value on a recurring basis
    September 30, 2013
Beginning balance   $ —    
Change in fair value of derivative liabilities     60,772  
Ending balance   $ 60,772  
Fair Value of Financial instruments Black-Scholes option pricing models
    September 30, 2013
Stock price   $ 0.14  
Volatility     240 %
Risk-free interest rate     0.04 %
Dividend yield     0 %
Expected life     0.002 years  


v0.0.0.0
Acquisition of CelLynx Group, Inc. (Tables)
9 Months Ended
Sep. 30, 2013
Notes to Financial Statements
Acquistion of Cellynx Group, Inc.
i.   Cash consideration paid   $ 170,000  
ii.   1,250,000 common shares of the registrant issued at a market price of $0.20 per share     250,000  
iii.   Redemption of convertible debt for 350 million shares of CelLynx Group Inc. common stock     455,000 (a)
Fair market value of consideration paid   $ 875,000  
Assets and Liabilities recognized at acquisition date
Description   Net book value of CelLynx Group, Inc. consolidated assets and liabilities   Acquisition
Adjustments (i) (ii)
  Valuation attributed to assets acquired
Current assets   $ 3,260             $ 3,260  
Patented and unpatented technology, trademarks, and license     44,718     $ 1,155,282 (ii)     1,200,000  
Investment in 5BARz   (iii)     1,800,000               1,800,000  
Furniture and equipment     2,113               2,113  
Accounts payable and accruals     (1,752,628 )             (1,752,628 )
Notes payable (net of discount)     (403,076 )             (403,076 )
Accrued interest     (62,250 )             (62,250 )
Derivative liability     (5,495,425 )     5,026,093 (i)     (469,332 )
LOC payable – 5BARz (net)     (586,525 )     586,525 (i)     —    
Fair value non-controlling interest             (583,333 )     (583,333 )
Totals   $ (6,449,813 )   $ 6,184,567       (265,246 )
Goodwill                     1,140,246  
Purchase price                   $ 875,000  


v0.0.0.0
Convertible Securities (Tables)
9 Months Ended
Sep. 30, 2013
Convertible Securities Tables
Convertible Promissory Note

Convertible Promissory Notes 

 

5BARz International, Inc.
 
Issue Date
  Unpaid
Note Principal
  Note
Terms
  Unpaid
Interest & penalty
  Balance
September 30, 2013
  Balance
December 31, 2012
February 27, 2012  $—     (a)  $2,771   $2,771   $40,832 
May 3, 2012   42,500   (b)   9,380    51,880    67,131 
September 18, 2012   13,500   (c)   2,654    16,154    20,712 
February 3, 2012   30,000   (d)   112,649    142,649    207,500 
June 8, 2012   50,000   (d)   56,658    106,658    100,000 
December 17, 2012   80,000   (e)   5,032    85,032    —   
January 8, 2013   147,428   (f)   8,563    155,991    —   
Notes payable – 5BARz International Inc. $363,428     $197,707   $561,135   $436,175 

 

 

Cellynx Group Inc.
 
Issue Date
  Unpaid
Note Principal
  Note
Terms
  Unpaid
Interest & penalty
  Balance
September 30, 2013
  Balance
December 31, 2012
November. 10, 2007  $262,356   (g)  $61,844   $324,200   $316,693 
April 5, 2011   50,000   (h)   34,962    84,962    98,613 
January 5, 2012   50,000   (i)   31,948    81,948    80,438 
May 24, 2012   19,500   (j)   4,588    24,088    42,433 
September 12, 2012   12,500   (k)   1,049    13,549    19,202 
Notes payable Cellynx Group, Inc.  $394,356     $134,391   $528,747   $557,379 
Total  $757,784     $332,098   $1,089,882   $993,554 

 



v0.0.0.0
Options and Warrants (Tables)
9 Months Ended
Sep. 30, 2013
Options And Warrants Tables
Options- 5BARz International Inc.
 

Number of

Options

 

Weighted Average

Exercise Price

 

Average Remaining

Contractual Life

 
Outstanding at December 31, 2012     0   $ 0.0      
Granted   4,000,000     0.10      
Exercised            
Cancelled            
Outstanding at September 30, 2013   4,000,000   $ 0.10     2.63  
Exercisable at September 30, 2013   4,000,000   $ 0.10     2.63  
Weighted Average Exercise Price of all Options
     
    May 17, 2013
Stock price   $ 0.097  
Volatility     225 %
Risk-free interest rate     0.04 %
Dividend yield     0 %
Expected life     3.0 years  
Warrants - 5BARz International Inc.
 

Number of

Warrants

 

Weighted Average

Exercise Price

 

Average Remaining

Contractual Life

 
Outstanding at December 31, 2012     2,140,000   $ 0.20      
Granted   21,819,885     0.25      
Exercised            
Cancelled   1,600,000     0.20      
Outstanding at September 30, 2013   22,359,885   $ 0.25     1.71  
Exercisable at September 30, 2013   22,359,885   $ 0.25     1.71  
Significant Assumptions and valuation methods - 5BARz International Inc.
    September 1, 2013
Stock price   $ 0.092  
Volatility     240 %
Risk-free interest rate     0.04 %
Dividend yield     0 %
Expected life     2.0 years  
Options-CelLynx Group, Inc.
   

 

Options

  Weighted average
exercise price
  Weighted average remaining contract life
Opening at December 31, 2012     6,400,000     $ 0.0008       0  
Granted     65,000,000     $ 0.0002       4.5  
Expired     6,400,000       0.0008        0  
Outstanding at September 30, 2013     65,000,000     $ 0.0002       4.5  
Significant Assumptions and valuation methods - CelLynx Group, Inc.
     
    August 28, 2013
Stock price   $ 0.0002  
Volatility     479 %
Risk-free interest rate     0.04 %
Dividend yield     0 %
Expected life     4.5 years  
Warrants - CelLynx Group, Inc.
    Number of
Warrants
  Weighted Average
Exercise Price
  Average Remaining
Contractual Life
Outstanding at December 31, 2012     5,930,000     $ .79          
Granted                        
Exercised     —         —            
Expired     1,430,000       0.10          
Outstanding at September 30, 2013     4,500,000     $ 0.96       1.4  
Exercisable at September 30, 2013     4,500,000     $ 0.96       1.4  


v0.0.0.0
Subsequent Events (Tables) (USD $)
9 Months Ended
Sep. 30, 2013
Subsequent Events Tables Usd
Pro-forma Financial Information

 

5BARz INTERNATIONAL INC. AND SUBSIDIARIES          
( A Development Stage Company)          
CONDENSED CONSOLIDATED PRO-FORMA BALANCE SHEETS          
(Unaudited)          
    September 30, Adjustments   September 30,
    2013     2013
ASSETS         Pro-Forma
CURRENT ASSETS:          
Cash   $ 143,754   (i)         1,566,980   $ 1,710,734  
Prepaid expenses and deposits     61,075         61,075  
TOTAL CURRENT ASSETS     204,829         1,771,809  
                   
FIXED ASSETS:                  
   Equipment, net     7,015         7,015  
OTHER ASSETS:                  
Intangible assets     3,387,406         3,387,406  
  Goodwill     1,140,246         1,140,246  
Total other assets     4,527,652         4,527,652  
TOTAL ASSETS   $ 4,739,496       $ 6,306,476  
                   
LIABILITIES AND STOCKHOLDERS' EQUITY                  
                   
CURRENT LIABILITIES:                  
Accounts payable and accrued expenses   $ 2,562,262   (ii)    (1,018,823)   $ 1,543,439  
Due to escrow agent     52,321         52,321  
Accrued derivative liabilities     60,772         60,772  
Notes payable (net of discount)     1,089,882   (iii)       (514,398)     575,484  
TOTAL CURRENT LIABILITIES     3,765,237         2,232,016  
 Related party loans     472         472  
                   
TOTAL LIABILITIES     3,765,709         2,232,488  
                   
STOCKHOLDERS' EQUITY                  
Common stock, $.001 par value, 250,000,000 shares authorized;  160,117,625 shares issued and outstanding as of September 30, 2013 on a pro-forma basis     138,404    21,714     160,118  
Capital in excess of par value     5,179,130    2,149,676     7,328,806  
Deficit accumulated during the development stage     (4,989,290 ) (iv)           928,811     (4,060,479 )
Accumulated Other Comprehensive Income     27,250         27,250  
Non-controlling interest     618,293         618,293  
Total stockholders' equity     973,787         4,073,988  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 4,739,496       $ 6,306,476  



v0.0.0.0
Organization and Basis of Reporting (Details)
9 Months Ended
Sep. 30, 2013
5BARz AG
Sep. 30, 2012
CelLynx Group, Inc.
Business Acquisition [Line Items]
Agreement date
Nov. 06, 2011 Mar. 29, 2012
Acquired interest
94.30%
Ownership in Entity
CeLlynx Inc.
Percentage Owned
60.00% 100.00%


v0.0.0.0
Going concern (Details) (USD $)
59 Months Ended
Sep. 30, 2013
Going Concern Details
Net loss
$ 4,975,662
Negative Cash Flows
2,451,387
Accumulated Deficit
$ 4,989,290


v0.0.0.0
Summary of Accounting Policies (Details) (USD $)
9 Months Ended
Sep. 30, 2013
Derivative Liabilities
$ 60,772
Level 3
Level 3 Valuation Methodolgy
Stock Price
$ 0.14
Expected volatility
240.00%
Risk-free Interest
0.04%
Annual Dividend Yield
0.00%
Exepected Life (years)
2 days


v0.0.0.0
Acquisition of CelLynx Group, Inc.Description (Details Narrative) (USD $)
1 Months Ended 0 Months Ended 3 Months Ended
Mar. 29, 2012
Jan. 07, 2011
CelLynx Group, Inc.
Mar. 29, 2012
CelLynx Group, Inc.
Common Stock recieved from CelLynx Group, Inc.
63,412,638
Purchase Price for common stok of CelLynx Group, Inc.
$ 634,126
Cash consideration paid
170,000 170,000
Common Share of the registrant issued
1,250,000
Amount of credit facility converted to capital stock of CelLynx Group, Inc.
$ 73,500
Amount of Shares of CelLynx Group, Inc. resulting from conversion of credit facility
350,000,000


v0.0.0.0
Investment in CelLynx Group, Inc. (Details) (USD $)
1 Months Ended
Mar. 29, 2012
Business Combinations [Abstract]
Cash consideration paid
$ 170,000
1,250,000 common shares of the registrant issued at a market price of $0.20 per share
250,000
Redemption of convertible debt for 350 million shares of Cellynx Group Inc. common stock
455,000
Fair market value of consideration paid
$ 875,000


v0.0.0.0
Investment in CelLynx Group, Inc. (Details) (Parenthetical) (USD $)
1 Months Ended
Mar. 29, 2012
Common Stock For Cellynx
Common Share of the registrant issued
1,250,000
Common Stock recieved from Cellynx Group, Inc.
63,412,638
Common Stock
Price Per Unit
$ 0.20


v0.0.0.0
Investment in CelLynx Group, Inc. - Assets and Liabilites recognized (Details) (USD $)
Sep. 30, 2013
Dec. 31, 2012
Mar. 29, 2012
Net book Value of Cellynx
Mar. 29, 2012
Adjustments
Mar. 29, 2012
Valuation attributed to assets acquired
Current assets
$ 3,260 $ 3,260
Patents, trademarks, and license
44,718 1,155,282 1,200,000
Investment in 5BARz
1,800,000 1,800,000
Furniture and equipment
2,113 2,113
Accounts payable and accruals
(1,756,628) (1,756,628)
Notes payable (net of discount)
(403,076) (403,076)
Accrued Interest
(62,250) (62,250)
Derivative liability
(5,495,425) (5,026,093) (469,332)
LOC payable-5BARz (net)
(586,525) (586,525) 0
Fair value non-controlling interest
(583,333) (583,333)
Totals
(6,449,813) 6,184,567 (265,246)
Goodwill
1,140,246 1,140,246 1,140,246
Purchase price
$ 875,000


v0.0.0.0
Acquisition of CelLynx Group, Inc. (Details Narrative) (CelLynx Group, Inc., USD $)
0 Months Ended
May 21, 2013
May 15, 2012
Apr. 13, 2012
CelLynx Group, Inc.
Conversion of debt
$ 9,375 $ 58,500 $ 7,700
Common Stock Recieved, share
375,000,000 390,000,000 51,333,333


v0.0.0.0
Investment in 5BARz AG (Details Narrative) (5BARz AG, USD $)
0 Months Ended 9 Months Ended
Oct. 06, 2011
Sep. 30, 2013
5BARz AG
Subsidiary or Equity Method Investee [Line Items]
5BARz AG Common stock issued, shares
10,000,000
5BARz AG Common stock issued held by company, shares
5,100,000 9,458,000
5BARz AG Common stock issued held by officers and a consultant, shares
450,000
5BARz AG Common stock in escrow, shares
4,450,000
5BARz AG Common stock, Par Value
0.01 CHF 0.01 CHF
Common Stock Sold, in shares
122,000
Proceeds of Common Stock
$ 108,752 $ 372,728
Acquired interest
94.30%


v0.0.0.0
Intangible Assets (Details) (USD $)
Sep. 30, 2013
Dec. 31, 2012
Intangible Assets, Gross
$ 3,387,406 $ 3,387,406
Accumulated amortization
Intangibles Assets, net
3,387,406 3,387,406
Patented and unpatented technology
Intangible Assets, Gross
3,015,794 3,015,794
Marketing and distribution agreement
Intangible Assets, Gross
370,000 370,000
Trademarks
Intangible Assets, Gross
264 264
License rights
Intangible Assets, Gross
$ 1,348 $ 1,348


v0.0.0.0
Intangible Assets (Details Narrative) (USD $)
12 Months Ended
Dec. 31, 2013
Patented and unpatented technology
Life of amortization
5 years
Amortization over the next five years
$ 866,998
Trademarks
Life of amortization
5 years
Amortization over the next five years
806
Amortization thereafter
$ 806
Maximum
Life of amortization
20 years
Minimum
Life of amortization
10 years


v0.0.0.0
Cumulative Sales of Stock 2008-2010 (Details)
1 Months Ended 1 Months Ended
Nov. 13, 2008
Founders Shares
Dec. 31, 2010
Common Stock
Dec. 31, 2008
Common Stock
Nov. 30, 2010
Stock Split
Issuance of restricted common stock/founders shares
7,100,000 1,776,100
Forward stock split
18
Authorized Shares-before stock split
100,000,000
Authorized Shares-After Stock split
250,000,000
Cancellation of Common Stock, shares
87,800,000
Common stock issued forAcquistions (in shares)
15,600,000


v0.0.0.0
Cumulative Sales of Stock 2011 (Details) (USD $)
3 Months Ended 0 Months Ended 1 Months Ended
Dec. 31, 2011
Conversion Of Convertible Debenture
Dec. 19, 2011
Common Stock
Dec. 15, 2011
Common Stock
Dec. 07, 2011
Common Stock
Nov. 08, 2011
Common Stock
Oct. 20, 2011
Common Stock
Jul. 24, 2011
Common Stock
Jul. 21, 2011
Common Stock
Jul. 18, 2011
Common Stock
Jun. 03, 2011
Common Stock
Apr. 07, 2011
Common Stock
Apr. 04, 2011
Common Stock
Mar. 09, 2011
Common Stock
Jan. 15, 2011
Common Stock
Jan. 10, 2011
Common Stock
Dec. 31, 2011
5BARz
Sep. 30, 2013
5BARz
Issuance of common stock (in shares)
150,000 455,180 75,000 200,000 37,500 40,000 69,610 25,000 5,000 200,000 350,000 150,000 200,000 300,000 21,000
Issuance of common stock
$ 15,000 $ 45,581 $ 7,500 $ 30,000 $ 7,500 $ 20,000 $ 14,000 $ 25,000 $ 3,000 $ 200,000 $ 350,000 $ 150,000 $ 200,000 $ 300,000 $ 75,840
Conversion of Convertible Debenture Agreement (in shares)
335,695
Conversion of Convertible Debenture Agreement (Euro's)
$ 67,513
Price Per Unit
$ 0.10 $ 0.10 $ 0.10 $ 0.15 $ 0.20 $ 0.50 $ 0.20 $ 1.00 $ 0.70 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 3.26


v0.0.0.0
Cumulative Sales of Stock 2012 -2013 (Details) (USD $)
0 Months Ended 4 Months Ended 9 Months Ended
Jul. 03, 2013
Jun. 30, 2013
May 23, 2013
May 15, 2013
Apr. 10, 2013
Apr. 02, 2013
Mar. 31, 2013
Mar. 17, 2013
Mar. 01, 2013
Feb. 26, 2013
Feb. 15, 2013
Feb. 12, 2013
Jan. 25, 2013
Dec. 31, 2012
Dec. 17, 2012
Dec. 12, 2012
Dec. 07, 2012
Oct. 26, 2012
Oct. 12, 2012
Sep. 14, 2012
Sep. 10, 2012
Sep. 05, 2012
Aug. 14, 2012
Aug. 10, 2012
Jul. 20, 2012
Jul. 09, 2012
Jun. 27, 2012
Jun. 21, 2012
Jun. 12, 2012
May 14, 2012
May 03, 2012
Apr. 30, 2012
Apr. 18, 2012
Apr. 02, 2012
Mar. 26, 2012
Mar. 22, 2012
Mar. 20, 2012
Mar. 07, 2012
Mar. 05, 2012
Feb. 29, 2012
Feb. 07, 2012
Feb. 01, 2012
Jan. 12, 2012
Nov. 18, 2013
Sep. 30, 2013
Common Stock
Issuance of common stock (in shares)
200,000 600,000 600,000 100,000 401,338 500,000 500,000 250,000 200,000 50,000 95,000 20,000 80,000 100,000 50,000 170,000 333,334 150,000 433,334 200,000 500,000 4,540,000
Units Issued (in shares)
200,000 425,000 400,000 1,200,000 400,000 300,000 300,000 100,000 27,213,904 [1] 11,735,000 [1]
Issuance of common stock
$ 586,750 $ 10,000 $ 10,000 $ 30,000 $ 21,250 $ 30,000 $ 20,000 $ 60,000 $ 20,000 $ 5,000 $ 15,000 $ 15,000 $ 12,000 $ 5,000 $ 25,000 $ 25,000 $ 52,000 $ 52,000 $ 5,000 $ 9,500 $ 2,000 $ 8,000 $ 15,000 $ 6,000 $ 25,500 $ 50,000 $ 18,000 $ 52,000 $ 20,000 $ 50,000 $ 2,721,390 $ 227,000
Common stock issued for services (in shares)
331,200 100,000 513,827 175,000 250,000 14,400,000 100,000 2,250,000 3,300,824 2,150,000 125,000 250,000 100,000 1,500,000 300,000
Common stock issued for services
66,240 5,000 25,691 8,750 10,000 72,000 5,000 112,500 165,041 212,620 14,977 30,000 47,990 150,000 30,000
Stock Issued During Period, Shares
125,000
Stock Issued During Period
7,500 1,566,980
Price Per Unit
$ 0.20 $ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.04 $ 0.05 $ 0.06 $ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.0299 $ 0.20 $ 0.05 $ 0.05 $ 0.20 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.12 $ 0.15 $ 0.12 $ 0.12 $ 0.15 $ 0.15 $ 0.12 $ 0.12 $ 0.4799 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.05
Warrant price
0.20 0.20 0.20 0.30 0.20
Cash received for issuance of stock
2,116,980
Settlement of debt for common stock
604,410
Common Stock Additional
Units Issued (in shares)
140,000
Issuance of common stock
7,000
Common stock issued for services (in shares)
91,780 66,667 50,000
Common stock issued for services
$ 4,589 $ 10,000 $ 5,000
Price Per Unit
$ 0.05 $ 0.05 $ 0.15 $ 0.10
[1] Each unit is comprised of one share and one warrant to acquire a second share, with a two year warrant term.


v0.0.0.0
Cumulative Sales of Stock Prices (Details) (USD $)
Nov. 18, 2013
Common Stock
Sep. 30, 2013
Common Stock
Jul. 03, 2013
Common Stock
May 15, 2013
Common Stock
Apr. 10, 2013
Common Stock
Mar. 31, 2013
Common Stock
Mar. 17, 2013
Common Stock
Mar. 01, 2013
Common Stock
Feb. 26, 2013
Common Stock
Feb. 15, 2013
Common Stock
Feb. 12, 2013
Common Stock
Dec. 31, 2012
Common Stock
Dec. 17, 2012
Common Stock
Dec. 12, 2012
Common Stock
Dec. 07, 2012
Common Stock
Oct. 26, 2012
Common Stock
Oct. 12, 2012
Common Stock
Sep. 14, 2012
Common Stock
Sep. 10, 2012
Common Stock
Sep. 05, 2012
Common Stock
Aug. 14, 2012
Common Stock
Aug. 10, 2012
Common Stock
Jul. 20, 2012
Common Stock
Jul. 09, 2012
Common Stock
Jun. 27, 2012
Common Stock
Jun. 21, 2012
Common Stock
Jun. 12, 2012
Common Stock
May 14, 2012
Common Stock
May 03, 2012
Common Stock
Apr. 30, 2012
Common Stock
Apr. 18, 2012
Common Stock
Apr. 02, 2012
Common Stock
Mar. 26, 2012
Common Stock
Mar. 22, 2012
Common Stock
Mar. 20, 2012
Common Stock
Mar. 07, 2012
Common Stock
Mar. 05, 2012
Common Stock
Feb. 29, 2012
Common Stock
Feb. 07, 2012
Common Stock
Feb. 01, 2012
Common Stock
Jan. 12, 2012
Common Stock
Sep. 30, 2013
Conversion Of Convertible Debenture
Mar. 31, 2012
Common Stock for Services
Mar. 31, 2012
Excess of Par Value
Sep. 30, 2013
Minimum
Sep. 30, 2013
Minimum
Common Stock
Dec. 31, 2012
Minimum
Common Stock
Sep. 30, 2012
Minimum
Common Stock
Jun. 30, 2012
Minimum
Common Stock
Mar. 31, 2012
Minimum
Common Stock
Sep. 30, 2011
Minimum
Common Stock
Jun. 30, 2011
Minimum
Common Stock
Mar. 30, 2011
Minimum
Common Stock
Sep. 30, 2013
Maximum
Sep. 30, 2013
Maximum
Common Stock
Dec. 31, 2012
Maximum
Common Stock
Sep. 30, 2012
Maximum
Common Stock
Jun. 30, 2012
Maximum
Common Stock
Mar. 31, 2012
Maximum
Common Stock
Sep. 30, 2011
Maximum
Common Stock
Jun. 30, 2011
Maximum
Common Stock
Mar. 30, 2011
Maximum
Common Stock
Price Per Unit
$ 0.10 $ 0.05 $ 0.20 $ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.04 $ 0.05 $ 0.06 $ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.0299 $ 0.20 $ 0.05 $ 0.05 $ 0.20 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.12 $ 0.15 $ 0.12 $ 0.12 $ 0.15 $ 0.15 $ 0.12 $ 0.12 $ 0.4799 $ 0.10 $ 0.10 $ 0.10 $ 0.20 $ 0.10 $ 3.26 $ 0.10 $ 0.10 $ 0.05 $ 0.5 $ 0.10 $ 0.10 $ 0.20 $ 0.70 $ 1.00 $ 0.20 $ 0.20 $ 0.05 $ 0.20 $ 0.15 $ 0.15 $ 1.00 $ 1.00 $ 1.00


v0.0.0.0
Convertible Promissory Notes (Details) (USD $) (USD $)
9 Months Ended
Sep. 30, 2013
Dec. 31, 2012
Unpaid Note Principal
$ 757,784
Unpaid Interest & penalty
332,098
Notes Payable
1,089,882 993,554
Note a
Issue Date
Feb. 27, 2012
Unpaid Note Principal
37,500
Unpaid Interest & penalty
2,771
Notes Payable
2,771 40,832
Note b
Issue Date
May 03, 2012
Unpaid Note Principal
42,500
Unpaid Interest & penalty
9,380
Notes Payable
51,880 67,131
Note c
Issue Date
Sep. 18, 2012
Unpaid Note Principal
13,500
Unpaid Interest & penalty
2,654
Notes Payable
16,154 20,712
Note d
Issue Date
Feb. 03, 2012
Unpaid Note Principal
30,000
Unpaid Interest & penalty
112,649
Notes Payable
142,649 207,500
Note d-2
Issue Date
Jun. 08, 2012
Unpaid Note Principal
50,000
Unpaid Interest & penalty
56,658
Notes Payable
106,658 100,000
Note e
Issue Date
Dec. 17, 2012
Unpaid Note Principal
80,000
Unpaid Interest & penalty
5,032
Notes Payable
85,032
Note f
Issue Date
Jan. 08, 2013
Unpaid Note Principal
147,428
Unpaid Interest & penalty
8,563
Notes Payable
155,991
5BARz
Unpaid Note Principal
363,428
Unpaid Interest & penalty
197,707
Notes Payable
$ 561,135 $ 436,175


v0.0.0.0
Convertible Promissory Notes (Details Narrative) (USD $)
9 Months Ended
Sep. 30, 2013
Dec. 31, 2012
Principal Amount
$ 757,784
Note Payable
1,089,882 993,554
Note a
Issue Date
Feb. 27, 2012
Principal Amount
37,500
Date of Maturity
Nov. 29, 2012
Interest Rate per annum
8.00%
Date
Sep. 10, 2012
Note paid off
12,000.00
Common stock issued for debt
401,338
Date of arrangement
Sep. 28, 2012
Date Due
Dec. 31, 2012
Aggregate payments
25,000
Price per share
$ 0.0299
Note Payable
2,771 40,832
Note b
Issue Date
May 03, 2012
Principal Amount
42,500
Date of Maturity
Feb. 03, 2013
Interest Rate per annum
8.00%
Note Payable
51,880 67,131
Note c
Issue Date
Sep. 18, 2012
Principal Amount
13,500
Date of Maturity
Mar. 17, 2013
Interest Rate per annum
8.00%
Accrued interest
16,154
Note Payable
16,154 20,712
Note d
Issue Date
Feb. 03, 2012
Principal Amount
30,000
Note Payable
142,649 207,500
Convertible Debenture Agreement
500,000
Convertible Debenture issued to investor
150,000
Note Receivable exchange for convertible debenture
400,000
Interest Rate
8.00%
Alleged damages
2,500,000
Note d-2
Issue Date
Jun. 08, 2012
Principal Amount
50,000
Note Payable
106,658 100,000
Note e
Issue Date
Dec. 17, 2012
Principal Amount
80,000
Interest Rate per annum
8.00%
Common stock issued for debt
1,600,000
Accrued interest
5,032
Note Payable
85,032
Derivative Liability
21,440
Note f
Issue Date
Jan. 08, 2013
Principal Amount
147,428
Price per share
$ 0.05
Accrued interest
8,563
Note Payable
155,991
Derivative Liability
$ 39,332


v0.0.0.0
Convertible Promissory Notes (Details Narrative) (Parenthetical)
9 Months Ended
Sep. 30, 2013
Note payments
Terms of note

The Company may settle that note within the first 90 days following the issue date by paying to the Lender 140% of the principle amount of the note plus accrued interest. The Company may settle the note during the period which is 91 days from the issue date of the note to 180 days from the issue date of the note by payment of 150% of the principle amount of the note plus accrued interest. In the event that the note is not repaid 180 days from the date of issue, the note is convertible into common stock.

Note d
Terms of note
On November 8, 2012, the Company filed an answer, affirmative defenses, and counterclaims, against the plaintiff. On January 3, 2013, the Company entered into a settlement agreement requiring payments in the aggregate amount of $300,000 yielding interest at 9%, and the issuance of 125,000 shares of the common stock of the Company. The Company issued the 125,000 shares on February 12, 2013. On March 13, 2013, an order granting entry of stipulated judgment was granted to La Jolla Cove Investors for payment by the Company of the $300,000 plus interest at 9%. The $300,000 along with 9% interest aggregated $319,307 and has been accrued at September 30, 2013. During the quarter ended September 30, 2013 the Company repaid $70,000, leaving a balance of $249,307 payable at September 30, 2013. Subsequent to September 30, 2013 the Company paid $50,000 on October 23, 2013 and $50,000 on November 12, 2013, leaving a residual balance due of $149,307.


v0.0.0.0
Cellynx Group, Inc. - Convertibles Promissory Notes (Details) (USD $)
9 Months Ended
Sep. 30, 2013
Dec. 31, 2012
Unpaid Note Principal
$ 757,784
UnpaidInterestPenalty
33209800.00%
Notes Payable
1,089,882 993,554
Note g
Issue Date
Nov. 10, 2007
Unpaid Note Principal
262,356
UnpaidInterestPenalty
6184400.00%
Notes Payable
324,200 316,693
Note h
Issue Date
Apr. 05, 2011
Unpaid Note Principal
50,000
UnpaidInterestPenalty
3496200.00%
Notes Payable
84,962 98,613
Note i
Issue Date
Jan. 05, 2012
Unpaid Note Principal
50,000
UnpaidInterestPenalty
3194800.00%
Notes Payable
81,948 80,438
Note j
Issue Date
May 24, 2012
Unpaid Note Principal
19,500
UnpaidInterestPenalty
458800.00%
Notes Payable
24,088 42,433
Note k
Issue Date
Sep. 12, 2012
Unpaid Note Principal
12,500
UnpaidInterestPenalty
104900.00%
Notes Payable
13,549 19,202
CelLnyx
Unpaid Note Principal
394,356
UnpaidInterestPenalty
13439100.00%
Notes Payable
$ 528,747 $ 557,379


v0.0.0.0
Cellynx Group, Inc. - Convertibles Promissory Notes (Details Narrative) (USD $)
9 Months Ended
Sep. 30, 2013
Dec. 31, 2012
Face Amount
$ 757,784
Note Payable
1,089,882 993,554
Note g
Issue Date
Nov. 10, 2007
Promissory Note
250,000
Face Amount
262,356
Interest Rate per annum
4.00%
Settlement of debt
27,500
Common stock issued for debt, shares
275,000
Price per share
$ 0.10
Note Payable
324,200 316,693
Note h
Issue Date
Apr. 05, 2011
Face Amount
50,000
Interest Rate per annum
8.00%
Common stock issued for debt, shares
603,780
Price per share
$ 0.10
Note Payable
84,962 98,613
Note i
Issue Date
Jan. 05, 2012
Face Amount
50,000
Interest Rate per annum
8.00%
Settlement of debt
170,000
Common stock issued for debt, shares
440,000
Price per share
$ 0.10
Note Payable
81,948 80,438
Note j
Issue Date
May 24, 2012
Promissory Note
37,500
Face Amount
19,500
Interest Rate per annum
8.00%
Settlement of debt
18,000
Note Payable
24,088 42,433
Note k
Issue Date
Sep. 12, 2012
Face Amount
12,500
Interest Rate per annum
8.00%
Note Payable
$ 13,549 $ 19,202


v0.0.0.0
Cellynx Group, Inc. - Convertibles Promissory Notes (Details Narrative) (Parenthetical)
9 Months Ended
Sep. 30, 2013
Note g
Terms
All unpaid principal, together with any then accrued but unpaid interest, shall be due and payable upon the earlier of (i) November 9, 2010 at the written request of the holder to the Company, or (ii) when, upon or after the occurrence of an event of default. The principal amount is convertible into 4.8% of the Company shares outstanding.
Note h
Terms
convert principal and unpaid interest on the note into shares of the Company’s common stock, with the number of shares issuable determined by dividing the amount to be converted by the conversion price which is equal to 63% of the average of the three lowest trading prices of the Company’s common stock over the ten trading days prior to the date of the conversion.
Note i
Terms
Holder may convert principal and unpaid interest on the note into shares of the Company’s common stock, with the number of shares issuable determined to be the amount obtained by dividing the amount to be converted by the conversion price which is the lesser of $0.0013 per share or 63% of the average of the three lowest trading prices of the Company’s common stock over the ten trading days prior to the date of the conversion.


v0.0.0.0
Options Exercisable 5BARz (Details) (USD $) (5BARz, USD $)
9 Months Ended
Sep. 30, 2013
5BARz
Options exercisable [Abstract]
Beginning, Number of Options
0
Options, Granted
4,000,000
Options, Exercised
Options, Cancelled
Ending,Number of Options, outstanding and exercisable
4,000,000
Weighted Average Exercise Price
Weighted Average Exercise Price
$ 0
Weighted Average Exercise Price, Granted
$ 0.10
Weighted Average Exercise Price, Exercised
Weighted Average Exercise Price, Cancelled
$ 0
Weighted Average Exercise Price
$ 0.10
Weighted Average Remaining Contractual Life
2 years 6 months 3 days


v0.0.0.0
Options and Warrants 5BARz (Details) (5BARz, USD $)
0 Months Ended 1 Months Ended
Sep. 01, 2013
May 17, 2013
5BARz
Stock Price
$ 0.092 $ 0.097
Expected volatility
240.00% 225.00%
Risk-free Interest
0.04% 0.04%
Annual Dividend Yield
0.00% 0.00%
Exepected Life (years)
2 years 3 years
Stock commitment, shares
4,625,000 2,000,000
Fair value of stock options
$ 370,979 $ 367,925
Share price
$ 0.20 $ 0.08
Stock options commitment expense
$ 370,979 $ 135,653


v0.0.0.0
Warrant Activity - 5BARz International Inc. (Details) (USD $) (5BARz, USD $)
9 Months Ended
Sep. 30, 2013
5BARz
Warrant Activity
Outstanding at December 31, 2012, Number of Warrants
2,140,000
Granted, Number of shares
21,819,885
Cancelled, Number of shares
1,600,000
Outstanding and exercisable, Number of Warrants
22,359,885
Weighted Average Exericse Price
Outstanding at December31, 2012
$ 0.20
Granted, Weighted average exercise price
$ 0.25
Cancelled, Weighted average exercise price
$ 0.20
Outstanding and exercisable, Weighted average exercise price
$ 0.25
Outstanding, Average Remaining Contractual Life
1 year 7 months 1 day


v0.0.0.0
Options Exercisable CelLynx (Details) (CelLynx, USD $)
9 Months Ended
Sep. 30, 2013
CelLynx
Options exercisable [Abstract]
Beginning, Number of Options
6,400,000
Options, Granted
65,000,000
Options, Cancelled
6,400,000
Ending,Number of Options, outstanding and exercisable
65,000,000
Weighted Average Exercise Price
Weighted Average Exercise Price
$ 0.0008
Weighted Average Exercise Price, Granted
$ 0.0002
Weighted Average Exercise Price, Cancelled
$ 0.0008
Weighted Average Exercise Price
$ 0.0002
Weighted Average Remaining Contractual Life
4 years 5 months 0 days


v0.0.0.0
Options Assumptions CelLynx (Details) (CelLynx, USD $) (CelLynx, USD $)
1 Months Ended
Aug. 28, 2013
CelLynx
Stock Price
$ 0.0002
Expected volatility
479.00%
Risk-free Interest
0.04%
Annual Dividend Yield
0.00%
Exepected Life (years)
4 years 5 months
Stock commitment, shares
5,000,000
Fair value of stock options
$ 4,500
Stock options commitment expense
$ 4,500


v0.0.0.0
Warrant Activity - CelLynx Group, Inc. (Details) (USD $) (CelLynx Group, Inc., USD $)
9 Months Ended
Sep. 30, 2013
CelLynx Group, Inc.
Warrant Activity
Outstanding at December 31, 2012, Number of Warrants
5,930,000
Granted, Number of shares
Exercised, Number of shares
Expired, Number of shares
1,430,000
Outstanding and exercisable, Number of Warrants
4,500,000
Weighted Average Exericse Price
Outstanding at December31, 2012
$ 0.79
Granted, Weighted average exercise price
Exercised, Weighted average exercise price
Expired, Weighted average exercise price
$ 0.10
Outstanding and exercisable, Weighted average exercise price
$ 0.96
Outstanding, Average Remaining Contractual Life
1 year 4 months 0 days


v0.0.0.0
Related Party transactions (Details) (USD $)
9 Months Ended 59 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Dec. 31, 2012
Related Party Transactions [Abstract]
Date of Agreement
Dec. 30, 2010
Proceeds from Note Payable
$ 370,000
Issuance of Common Stock
15,600,000
Payment on Note
19,378 97,612 463,701
Payment due to Related Party
$ 472 $ 472 $ 19,850


v0.0.0.0
Commitments (Details Narrative) (USD $)
Jul. 24, 2013
Commitments and Contingencies Disclosure [Abstract]
Lease montlhly payments
$ 1,371
Minimum lease payments
$ 281,154


v0.0.0.0
Litigation (Details Narrative) (USD $)
9 Months Ended
Sep. 30, 2013
CSS Properties #1
Date
10/21/2010
Allegations
Past due rent
Alleged Damages
$ 25,000
CSS Properties #2
Date
8/27/2012
Allegations
Past due rent
Alleged Damages
24,699
Legal Fees
3,000
Late Charges
2,041
Labor Commission
Date
7/19/2010
Allegations
Unpaid Wages
Alleged Damages
263,023
LaJolla Cove Investors Inc.
Date
10/16/2012
Allegations
Breach of contract
Alleged Damages
2,500,000
Legal Fees
300,000
La Jolla Cove Dimissal
Date
1/13/2013
Allegations
Dimssing Action
Alleged Damages
300,000
Late Charges
302,796
Interest Rate per annum
9.00%
Stock Issued During Period, Shares
125,000
Payment on Loan
10,000
Asher Enterprises, Inc.
Date
3/22/2013
Allegations
Repayment of notes
Alleged Damages
$ 81,000


v0.0.0.0
Litigation (Details Narrative) (Parenthetical)
9 Months Ended
Sep. 30, 2013
LaJolla Cove Investors Inc.
Damages Sought

Seeking compensatory damages and alleged loss of profits of in excess of $2,500,000, based upon a $150,000 investment made by LA Jolla Cove Investors under certain putative agreements. La Jolla Cove Investors Inc. v. 5Barz International, Inc., 3:12-CV-5333 (N.D. Cal.). On January 3, 2013, the Company and La Jolla Cove Investors, Inc. entered into an agreement for the settlement of the lawsuit for proceeds of $300,000 plus accrued interest from the date of the settlement agreement at a rate of 9%, plus the delivery of 125,000 shares of the common stock of the Company. On January 13, 2013 a stipulation dismissing action without prejudice and without award of attorney’s fees or costs was entered. The Company issued the 125,000 shares but was unable to meet the payment schedule as provided in the settlement agreement. On March 8, 2013 as a result of the default, La Jolla Cove was awarded a judgment in the amount of $300,000 plus accrued interest at a rate of 9% from the date of the settlement agreement. The Company intends to pay the balance due once funded. 

Asher Enterprises, Inc.
Damages Sought
The claims allege that damages in the amount of the greater of; (i) 200% x $81,000, the remaining outstanding principle amount of the Note, together with accrued and unpaid interest in the unpaid principle amount of the Notes, plus default interest; or (ii) the “parity value” of the “default amount” paid in shares as defined in the terms of the agreements. The Company intends to file an appearance and defend against the law suit.


v0.0.0.0
Subsequent Events (Details Narrative) (USD $)
0 Months Ended 9 Months Ended
Nov. 18, 2013
Subsequent Event
Sep. 30, 2013
Office Lease
Units Issued
27,213,904
Proceeds from Sale of Warrants
$ 2,721,390
Aggregate Proceeds
2,116,980
Line of credit
1,440,768
Aggregate funding of line of credit
2,504,106
Common stock issued for debt
5,119,574
Account payable settlement
92,453
Gain on settlement of debt
928,811
Price of Stock
$ 0.30
Price per share
$ 0.10 [1]
Monthly Lease Expense
8,023
Future minimum lease payments
312,897
Stock Issued During Period
1,566,980
Settlement of debt for common stock
$ 596,541
[1] Each unit is comprised of one share and one warrant to acquire a second share, with a two year warrant term.


v0.0.0.0
Subsequent Events (Details) (USD $)
Sep. 30, 2013
Dec. 31, 2012
CURRENT ASSETS:
Cash
$ 143,754 $ 48,308
Prepaid expenses and deposits
61,075 22,156
TOTAL CURRENT ASSETS
204,829 70,464
Equipment, net
7,015 4,406
OTHER ASSETS:
Intangible assets
3,387,406 3,387,406
Goodwill
1,140,246 1,140,246
Total other assets
4,527,652 4,527,652
TOTAL ASSETS
4,739,496 4,602,522
CURRENT LIABILITIES:
Accounts payable and accrued expenses
2,562,262 2,445,410
Due to escrow agent
52,321 52,321
Accrued derivative liabilities
60,772
Notes payable (net of discount)
1,089,882 993,554
TOTAL CURRENT LIABILITIES
3,765,237 3,491,285
Related party loans
472 19,850
TOTAL LIABILITIES
3,765,709 3,511,135
STOCKHOLDERS' EQUITY
Common stock, $.001 par value, 250,000,000 shares authorized; 160,117,625 shares issued and outstanding as of September 30, 2013 on a pro-forma basis
138,404 117,418
Capital in excess of par value
5,179,130 3,226,802
Deficit accumulated during the development stage
(4,989,290) (2,971,099)
Accumulated other comprehensive income
27,250 4,272
Non-controlling interest
618,293 713,994
Total stockholders' equity
973,787 1,091,387
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
4,739,496 4,602,522
Adjustments
CURRENT ASSETS:
Cash
(1,566,980)
CURRENT LIABILITIES:
Accounts payable and accrued expenses
(1,018,823)
Notes payable (net of discount)
(514,398)
STOCKHOLDERS' EQUITY
Common stock, $.001 par value, 250,000,000 shares authorized; 160,117,625 shares issued and outstanding as of September 30, 2013 on a pro-forma basis
21,714
Capital in excess of par value
2,149,676
Deficit accumulated during the development stage
928,811
Pro-Forma
CURRENT ASSETS:
Cash
1,710,734
Prepaid expenses and deposits
61,075
TOTAL CURRENT ASSETS
1,771,809
Equipment, net
7,015
OTHER ASSETS:
Intangible assets
3,387,406
Goodwill
1,140,246
Total other assets
4,527,652
TOTAL ASSETS
6,306,476
CURRENT LIABILITIES:
Accounts payable and accrued expenses
1,543,439
Due to escrow agent
52,321
Accrued derivative liabilities
60,772
Notes payable (net of discount)
575,484
TOTAL CURRENT LIABILITIES
2,232,016
Related party loans
472
TOTAL LIABILITIES
2,232,488
STOCKHOLDERS' EQUITY
Common stock, $.001 par value, 250,000,000 shares authorized; 160,117,625 shares issued and outstanding as of September 30, 2013 on a pro-forma basis
160,118
Capital in excess of par value
7,328,806
Deficit accumulated during the development stage
(4,060,479)
Accumulated other comprehensive income
27,250
Non-controlling interest
618,293
Total stockholders' equity
4,073,988
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$ 6,306,476