Capstone Companies Reports First Quarter 2022 Performance

May 16, 2022 4:00 PM EDT

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DEERFIELD BEACH, Fla.--(BUSINESS WIRE)-- 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 2022 financial results on Monday, May 16, 2022.

Stewart Wallach, Chief Executive Officer, and Chairman of Capstone Companies, commented, “As a direct result of ongoing logistical delays brought on by scheduling backlogs and offloading congestion, the Company’s planned product launch for January 2022 was delayed and the inventories required for the launch campaigns were not available in our warehouse facilities until early March. As such, minimal mirror revenues took place in the quarter and our marketing efforts were fragmented.”

Gerry McClinton, Chief Financial Officer, noted, “We currently have an estimated $1.4 million of retail inventory available for customer shipments and additional orders placed to support replenishment. This is a tremendous portfolio, and we are determined to have it grow to its full potential.”

Wallach added, “We are now executing an ambitious marketing effort starting with new digital asset development to include hero video development to support our new messaging and brand image. We have engaged outside talent of the highest creative caliber and have raised additional working capital from inside to support this effort thru year end. I should add the raise is non-dilutive to the shareholders. I will be scheduling a strategic update webcast later in this week with details on our next steps.”

Wallach further commented, “The insiders and directors remain resolute and have continued to support the Company in every way possible. In the past 9 months $1.6 million of working capital was provided with favorable non-dilutive terms. In addition to the funding, the largest insider shareholders have not sold any shares. I realize our shareholder community is anxious and I am hopeful all will attend the strategic update webcast in the days ahead to gain insight into our newly energized marketing efforts going forward.”

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.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.

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 
March 31, December 31,

2022

2021

Assets: (Unaudited)
Current Assets:
Cash

$

623,991

 

$

1,277,492

 

Accounts receivable, net

 

145,013

 

 

1,481

 

Inventories

 

1,035,196

 

 

508,920

 

Prepaid expenses

 

212,446

 

 

500,748

 

ERTC- refundable

 

152,000

 

 

-

 

Income tax refundable

 

53,718

 

 

284,873

 

Total Current Assets

 

2,222,364

 

 

2,573,514

 

 
Property and equipment, net

 

70,517

 

 

76,928

 

Operating lease- right of use asset, net

 

82,979

 

 

98,651

 

Deposit

 

11,148

 

 

11,148

 

Goodwill

 

1,312,482

 

 

1,312,482

 

Total Assets

$

3,699,490

 

$

4,072,723

 

 
Liabilities and Stockholders’ Equity:
Current Liabilities:
Accounts payable and accrued liabilities

$

627,492

 

$

538,551

 

Operating lease- current portion

 

71,953

 

 

70,157

 

Total Current Liabilities

 

699,445

 

 

608,708

 

 
Long-Term Liabilities:
Operating lease- long-term portion

 

18,930

 

 

37,533

 

Note payable related parties and accrued interest

 

1,042,915

 

 

1,030,340

 

Deferred tax liabilities -long-term

 

273,954

 

 

273,954

 

Total Long-Term Liabilities

 

1,335,799

 

 

1,341,827

 

Total Liabilities

 

2,035,244

 

 

1,950,535

 

 
Commitments and Contingencies: ( Note 5 )
 
Stockholders' Equity:
Preferred Stock, Series A, par value $.001 per share, authorized 6,666,667 shares, issued and outstanding -0- shares

 

-

 

 

-

 

Preferred Stock, Series B-1, par value $.0001 per share, authorized 3,333,333 shares, issued and outstanding- 15,000 shares at March 31, 2022, and December 31, 2021 (Liquidation Preference $15,000)

 

2

 

 

2

 

Preferred Stock, Series C, par value $1.00 per share, authorized 67 shares, issued and outstanding -0- shares

 

-

 

 

-

 

Common Stock, par value $.0001 per share, authorized 56,666,667 shares, issued and outstanding 48,893,031 shares at March 31, 2022 and December 31, 2021.

 

4,892

 

 

4,892

 

Additional paid-in capital

 

8,557,682

 

 

8,554,320

 

Accumulated deficit

 

(6,898,330

)

 

(6,437,026

)

Total Stockholders' Equity

 

1,664,246

 

 

2,122,188

 

Total Liabilities and Stockholders’ Equity

$

3,699,490

 

$

4,072,723

 

 
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,

2022

 

2021

   
Revenues, net

$

262,979

 

 

$

438,423

 

Cost of sales

 

(187,063

)

 

 

(309,776

)

Gross Profit

 

75,916

 

 

 

128,647

 

   
Operating Expenses:  
Sales and marketing

 

132,930

 

 

 

4,180

 

Compensation

 

196,553

 

 

 

352,079

 

Professional fees

 

156,462

 

 

 

127,224

 

Product development

 

51,560

 

 

 

26,892

 

Other general and administrative

 

140,073

 

 

 

103,122

 

Total Operating Expenses

 

677,578

 

 

 

613,497

 

   
Operating Loss

 

(601,662

)

 

 

(484,850

)

   
Other Income (Expense):  
Other Income, net

 

152,000

 

 

 

-

 

Interest expense, net

 

(11,642

)

 

 

(14,136

)

Total Other Income (Expense), net

 

140,358

 

 

 

(14,136

)

   
Loss Before Tax

 

(461,304

)

 

 

(498,986

)

   
Income Tax Expense (Benefit)

 

-

 

 

 

-

 

   
Net Loss

$

(461,304

)

 

$

(498,986

)

   
Net Loss per Common Share  
Basic and Diluted

$

(0.01

)

 

$

(0.01

)

   
Weighted Average Shares Outstanding  
Basic and Diluted I owe you the number

 

48,893,031

 

 

 

46,296,364

 

   

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, 2022 AND MARCH 31, 2021

(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, 2021

-

$

-

15,000

$

2

-

$

-

48,893,031

$

4,892

$

8,554,320

$

(6,437,026

)

$

2,122,188

 

Stock options for compensation

-

 

-

-

 

-

-

 

-

-

 

-

 

3,362

 

-

 

 

3,362

 

Net Loss

 

(461,304

)

 

(461,304

)

Balance at March 31, 2022

-

 

-

15,000

$

2

-

 

-

48,893,031

$

4,892

$

8,557,682

$

(6,898,330

)

$

1,664,246

 

 
 
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 Directors 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

 

 

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,

2022

2021

CASH FLOWS FROM OPERATING ACTIVITIES:
 

$

(461,304

)

$

(498,986

)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization

 

6,411

 

 

2,464

 

Stock based compensation expense

 

3,362

 

 

4,200

 

Noncash lease expense

 

15,672

 

 

14,554

 

Non-cash stock issued to Director's for loan

 

-

 

 

24,498

 

Accrued interest added to note payable related parties

 

12,575

 

 

-

 

Increase in accounts receivable, net

 

(143,532

)

 

(47,038

)

Increase in inventories

 

(526,276

)

 

-

 

Decrease in prepaid expenses

 

288,302

 

 

32,333

 

Increase in accounts payable and accrued liabilities

 

88,941

 

 

145,676

 

Increase employee retention tax refundable

 

(152,000

)

 

-

 

Income tax refundable

 

231,155

 

 

575,645

 

Decrease in operating lease liabilities

 

(16,807

)

 

(15,148

)

Net cash (used) in provided by operating activities

 

(653,501

)

 

238,198

 

 
Net Increase (Decrease) in Cash

 

(653,501

)

 

238,198

 

Cash at Beginning of Period

 

1,277,492

 

 

1,223,770

 

Cash at End of Period

$

623,991

 

$

1,461,968

 

 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Stocks issued to directors for loan fee

$

-

 

$

24,498

 

 
Cash paid for interest

$

-

 

$

-

 

 
Cash paid for income taxes

$

-

 

$

-

 

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

 

Aimee C. Brown
Corporate Secretary of Company
(954) 252-3440, ext. 313

Source: Capstone Companies, Inc.



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