Capstone Companies Reports First Quarter 2021 Performance

By: Capstone Companies, Inc. via Business Wire

May 17, 2021 at 15:30 PM EDT

Capstone Companies, Inc. (OTC: CAPC) (“Capstone” or the “Company”), a designer, manufacturer and marketer of consumer inspired products that simplify daily living through technology reported its first quarter 2021 financial results.

Gerry McClinton, Capstone’s Chief Financial Officer, commented, “With equity funding now in place, we can focus on the Smart Mirror rollout, inventory build and social media expansion.”

Stewart Wallach, Capstone’s Chairman and Chief Executive Officer, added, “While financial performance has improved minimally as revenues increased, we will be updating our shareholder community on the progress of the Company’s Smart Mirror program which is its future core business.”

Webcast and Teleconference to Review Results and Outlook

Tuesday, May 18, 2021

10:30 a.m. Eastern Time

Phone: (201) 689-8562

Internet webcast link available at: www.capstonecompaniesinc.com

A telephonic replay will be available from 1:30 p.m. ET the day of the call until Tuesday, May 25, 2021. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13718602. Alternatively, the archive of the webcast will be available on the Company’s website at www.capstonecompaniesinc.com, along with a transcript once available.

About Capstone Companies, Inc.

Capstone Companies, Inc. is a public holding company that engages, through its wholly owned subsidiaries, Capstone Industries, Inc., Capstone Lighting Technologies, LLC, and Capstone International HK, Ltd., in the development, manufacturing and marketing of consumer products to retail channels throughout North America and certain international markets.

Visit our websites; www.capstonecompaniesinc.com for more information about the Company and www.capstoneindustries.com and www.capstoneconnected.com for information on our current product offerings. Contents of referenced URL’s are not incorporated herein.

Forward Looking Statements. This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this press release regarding strategy, future operations, and plans, including assumptions underlying such statements, are forward-looking statements, and should not be relied upon as representing Company’s views as of any subsequent date. Such forward-looking statements are based on information available to the Company as of the date of this press release and involve a number of risks and uncertainties, some beyond the Company’s control or ability to foresee, that could cause actual results to differ materially from those anticipated by these forward-looking statements, including, including the impact of Coronavirus/COVID-19 pandemic on the Smart Mirror product line, any difficulty in marketing Company products in its target markets, competition in the market, and impact of evolving technologies in Smart Mirrors on Company’s prospects and products. Additional information that could lead to material changes in Company’s performance is contained in its filings with the Securities and Exchange Commission.

Company is under no obligation to, and expressly disclaims any responsibility to, update or alter forward-looking statements contained in this release, whether as a result of current information, future events or otherwise. Any investment in the Company’s common stock, which is a “penny stock,” is highly risky and not suitable for investors who require liquidity and are unable to withstand the loss of their investment. Investors should only rely on public information in our filings with the SEC, especially disclosures of Risk Factors, as a basis for investment decisions about Company common stock. Company’s SEC filings can be accessed through SEC website: www.sec.gov or the corporate website listed below.

FINANCIAL TABLES FOLLOW. THE FOLLOWING SUMMARY FINANCIAL STATEMENT SHOULD BE READ ALONG WITH THE FORM 10K FINANCIAL STATEMENT FILED BY THE COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION.

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,
	2021			2020
Assets:	(Unaudited)
Current Assets:
Cash	$	1,461,968		$	1,223,770
Accounts receivable, net		167,102			120,064
Inventories		8,775			8,775
Prepaid expenses		67,787			75,622
Income tax refundable		285,673			861,318
Total Current Assets		1,991,305			2,289,549

Property and equipment, net		52,388			54,852
Operating lease – right of use asset		143,950			158,504
Deposit		25,560			25,560
Goodwill		1,312,482			1,312,482
Total Assets	$	3,525,685		$	3,840,947

Liabilities and Stockholders’ Equity:
Current Liabilities:
Accounts payable and accrued liabilities	$	971,366		$	825,690
Operating lease – current portion		64,967			63,307
Total Current Liabilities		1,036,333			888,997

Long-Term Liabilities:
Operating lease – long-term portion		90,882			107,690
Deferred tax liabilities-long-term		259,699			259,699
Total Long-Term Liabilities		350,581			367,389
Total Liabilities		1,386,914			1,256,386

Commitments and Contingencies (Note 5)
Stockholders' Equity:
Preferred Stock, Series A, par value $.001 per share, authorized 6,666,667 shares, issued -0- shares		-			-
Preferred Stock, Series B-1, par value $.0001 per share, authorized 3,333,333 shares, issued 15,000 shares at March 31, 2021		2			-
Preferred Stock, Series C, par value $1.00 per share, authorized 67 shares, issued -0- shares		-			-
Common Stock, par value $.0001 per share, authorized 56,666,667 shares, `outstanding 46,296,364 shares at March 31, 2021 and 46,296,364 shares at December 31, 2020		4,630			4,630
Additional paid-in capital		7,106,522			7,053,328
Accumulated deficit		(4,972,383	)		(4,473,397)
Total Stockholders' Equity		2,138,771			2,584,561
Total Liabilities and Stockholders’ Equity	$	3,525,685		$	3,840,947

The accompanying notes are an integral part of these condensed consolidated financial statements.

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	For the Three Months Ended
	March 31,
	2021			2020

Revenues, net	$	438,423		$	148,977
Cost of sales		(309,776	)		(114,821	)
Gross Profit		128,647			34,156

Operating Expenses:
Sales and marketing		4,180			211,973
Compensation		352,079			376,675
Professional fees		127,224			130,530
Product development		26,892			51,614
Other general and administrative		103,122			144,366
Goodwill impairment charge		-			290,059
Total Operating Expenses		613,497			1,205,217

Operating Loss		(484,850	)		(1,171,061	)

Other Income (Expense):
Other income		10,362			-
Other expense		(24,498	)		-
Net Other Income (Expense)		(14,136	)		-

Loss Before Tax Benefit		(498,986	)		(1,171,061	)

Benefit for Income Tax		-			(573,685	)

Net Loss	$	(498,986)		$	(597,376)

Net Loss per Common Share
Basic and Diluted	$	(0.01)		$	(0.01)

Weighted Average Shares Outstanding
Basic and Diluted		46,296,364			46,463,365

The accompanying notes are an integral part of these condensed consolidated financial statements.

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND MARCH 31, 2020
(Unaudited)

	Preferred Stock				Preferred Stock					Preferred Stock											Additional
	Series A				Series B					Series C					Common Stock						Paid-In			Accumulated			Total
	Shares		Par Value		Shares		Par Value			Shares		Par Value			Shares			Par Value			Capital			Deficit			Equity

Balance at December 31, 2020		-	$	-		-		$	-		-		$	-		46,296,364			$4,630			$7,053,328			$(4,473,397)			$2,584,561

Stock options for compensation		-		-		-			-		-			-		-			-			4,200			-			4,200
Stock issued to Director’s for loan		-		-		15,000			2		-			-		-			-			48,994			-			48,996
Net Loss		-		-		-			-		-			-		-			-			-			(498,986	)		(498,986	)
Balance at March 31, 2021		-	$	-		15,000		$	2		-		$	-		46,296,364			$4,630			$7,106,522			$(4,972,383)			$2,138,771


Balance at December 31, 2019		-	$	-		-		$	-		-		$	-		46,579,747			$4,658			$7,061,565			$(2,089,581)			$4,967,642
Stock options for compensation		-		-		-			-		-			-		-			-			8,925						8,925
Repurchase of shares		-		-		-			-		-			-		(283,383	)		(28	)		(36,305	)		-			(36,333	)
Net Loss		-		-		-			-		-			-		-			-			-			(597,376	)		(597,376	)
Balance at March 31, 2020		-	$	-		-		$	-		-		$	-		46,296,364			$4,630			$7,034,185			$(2,686,957	)		$4,351,858

The accompanying notes are an integral part of these condensed consolidated financial statements.

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	For the Three Months Ended
	March 31,
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(498,986	)	$	(597,376)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		2,464			6,074
Stock based compensation expense		4,200			8,925
Non-cash stock issued to Director’s for loan		24,498			-
Non-cash lease expense		14,554			13,583
Goodwill impairment charge		-			290,059
Provision for deferred income tax		-			172,287
Increase in accounts receivable, net		(47,038	)		(56,515)
Decrease in inventories		-			11,392
Decrease in prepaid expenses		32,333			42,199
Decrease in deposits		-			34,874
Increase in accounts payable and accrued liabilities		145,676			201,752
(Increase) decrease in income tax refundable		575,645			(745,972)
(Decrease) in operating lease liabilities		(15,148	)		(7,807)
Net cash provided by (used in) operating activities		238,198			(626,525)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		-			(15,739)
Net cash used in investing activities		-			(15,739)

CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of shares		-			(36,333)
Net cash used in financing activities		-			(36,333)

Net Increase (decrease) in Cash		238,198			(678,597)
Cash at Beginning of Period		1,223,770			3,131,249
Cash at End of Period	$	1,461,968		$	2,452,652

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	-		$	-
Income taxes	$	-		$	-

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Stocks issued to Directors for prepaid loan fee	$	24,498		$	-
The accompanying notes are an integral part of these condensed consolidated financial statements.

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Contacts

Company:

Aimee C. Brown

Corporate Secretary

(954) 252-3440, ext. 313