Aug 15, 2019   SOURCE: BusinessWire

Capstone Companies Reports Second Quarter 2019

Capstone Companies, Inc. (OTC: CAPC) (“Capstone” or the “Company”), a designer, manufacturer and marketer of consumer inspired products that bridge technological innovations with today’s lifestyle reported its financial results for the second quarter 2019.

Stewart Wallach, Capstone’s Chairman and CEO, commented, “as projected at our Q1 conference call, YTD revenues for our core LED business are strong. The new product line has resonated well with consumers and we have invested significantly in marketing support to maintain this momentum through 2019.”

Mr. Wallach added, “the Company continues to advance its initiative for transitioning its supply chain outside of China and expects to be shipping from these new OEM partners in Q4 2019. This will support the Company’s competitiveness and help sustain normal revenue activity.”

Gerry McClinton, Capstone’s CFO, commented further, “in addition to the significant marketing investments mentioned by Mr. Wallach, we have underwritten the development of the Company’s new smart home electronics product portfolio without incurring debt.”

Webcast and Teleconference to Review Results and Outlook

The Company will host a live webcast and conference call on Thursday, August 15, 2019 at 10:30 a.m. Eastern Time. During the call, management will review the financial and operating results and discuss the Company’s corporate strategy and outlook, followed by a question-and-answer session. The conference call can be accessed by dialling (201) 689-8562. The listen-only audio webcast can be monitored at www.capstonecompaniesinc.com.

A telephonic replay will be available from 1:30 p.m. ET the day of the call until Thursday, August 23, 2019. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13692244. 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, Limited, in the development, manufacturing and marketing of consumer product to retail channels throughout North America and international markets.

Visit www.capstonecompaniesinc.com for more information about the Company and www.capstoneindustries.com and www.capstoneconnectedhome.com for information on our current product offerings.

FORWARD-LOOKING STATEMENTS:

This news release contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995, as amended. Such statements consist of words like “anticipate,” “expect,” “project,” “continue” and similar words. These statements are based on the Company’s and its subsidiaries’ current expectations and involve risks and uncertainties, which may cause results to differ materially from those set forth in the forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include consumer acceptance of the Company’s products, its ability to deliver new products, the success of its strategy to broaden market channels and the relationships it has with retailers and distributors. Prior success in operations does not necessarily mean success in future operations. The ability of the Company to adequately and affordably fund operations and any growth will be critical to achieving and sustaining any expansion of markets and revenue. The introduction of new products or the expanded availability of products does not mean that the Company will enjoy better financial or business performance. The risks associated with any investment in Capstone Companies, Inc., which is a small business concern and a "penny-stock Company” and, as such, a highly risky investment suitable for only those who can afford to lose such investment, should be evaluated together with the risks and uncertainties more fully described in the Company’s Annual and Quarterly Reports filed with the Securities and Exchange Commission. Capstone Companies, Inc. undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. Contents of referenced URLs are not incorporated into this press release.

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

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 

June 30,

 

December 31,

2019

 

2018

Assets: (Unaudited)
Current Assets:
Cash

$ 1,232,921

$ 3,822,359

Accounts receivable, net

2,770,235

64,511

Inventories

-

27,497

Prepaid and other

351,678

243,876

Income tax refundable

220,207

220,207

Total Current Assets

4,575,041

4,378,450

 
Property and Equipment:
Computer equipment and software

53,819

51,195

Machinery and equipment

196,067

170,567

Furniture and fixtures

6,828

6,828

Less: Accumulated depreciation

(174,822)

(152,870)

Total Property & Equipment

81,892

75,720

 
Other Non-current Assets:
Deposit

62,693

102,805

Goodwill

1,936,020

1,936,020

Total Other Non-current Assets

1,998,713

2,038,825

Total Assets

$ 6,655,646

$ 6,492,995

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

$ 1,055,935

$ 461,446

Deferred rent incentive

58,678

108,844

Income tax payable

11,694

11,694

Total Current Liabilities

1,126,307

581,984

 
Long Term Liabilities:
Deferred tax liabilities

-

12,000

Total Long Term Liabilities

-

12,000

Total Liabilities

1,126,307

593,984

 
Commitments and Contingencies
 
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 -0- shares

-

-

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, issued 46,832,364 shares at June 30, 2019 and 47,046,364 shares at December 31, 2018

4,684

4,704

Additional paid-in capital

7,078,411

7,092,219

Accumulated deficit

(1,553,756)

(1,197,912)

Total Stockholders' Equity

5,529,339

5,899,011

Total Liabilities and Stockholders’ Equity

$ 6,655,646

$ 6,492,995

 
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

 

For the Six Months Ended

 

 

 

 

 

June 30,

 

June 30,

 

 

 

 

 

2019

 

2018

 

2019

 

2018

 

 
Revenues, net

$ 3,407,822

$ 2,103,206

$ 6,386,624

$ 6,163,374

Cost of sales

(2,673,711)

(1,742,486)

(5,025,926)

(4,783,384)

Gross Profit

734,111

360,720

1,360,698

1,379,990

 
Operating Expenses:
Sales and marketing

35,395

115,547

227,270

478,608

Compensation

382,317

369,749

757,165

744,858

Professional fees

82,803

142,900

240,606

291,786

Product development

94,534

123,766

179,763

290,332

Other general and administrative

157,552

166,676

321,263

340,965

Total Operating Expenses

752,601

918,638

1,726,067

2,146,549

 
Operating Loss

(18,490)

(557,918)

(365,369)

(766,559)

 
Other Income (Expense), Net

7,986

147,290

(2,475)

147,290

 
 
Loss Before Tax (Benefit)

(10,504)

(410,628)

(367,844)

(619,269)

 
(Benefit) for Income Tax

-

(59,000)

(12,000)

(77,000)

 
Net Loss

$ (10,504)

$ (351,628)

$ (355,844)

$ (542,269)

 
Net Loss per Common Share
Basic

($0.00)

($0.01)

($0.01)

($0.01)

Diluted

($0.00)

($0.01)

($0.01)

($0.01)

 
Weighted Average Shares Outstanding
Basic

46,928,935

47,046,364

46,906,092

47,046,364

Diluted

46,928,935

47,046,364

46,906,092

47,046,364

 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
 
 
 
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, 2018

-

$ -

-

$ -

-

$ -

47,046,364

$ 4,704

$ 7,092,219

$ (1,197,912)

$ 5,899,011

Stock options for compensation

-

-

-

-

-

-

-

-

11,025

-

11,025

Repurchase of shares

-

-

-

-

-

-

(45,470)

(3)

(8,612)

-

(8,615)

Net (Loss)

-

-

-

-

-

-

-

-

-

(345,340)

(345,340)

Balance at March 31, 2019

-

-

-

-

-

-

47,000,894

$ 4,701

$ 7,094,632

$ (1,543,252)

$ 5,556,081

 
 
Stock options for compensation

-

-

-

-

-

-

-

-

11,025

-

11,025

Repurchase of shares

-

-

-

-

-

-

(168,530)

(17)

(27,246)

-

(27,263)

Net (Loss)

-

-

-

-

-

-

-

-

-

(10,504)

(10,504)

Balance at June 30, 2019

-

$ -

-

$ -

-

$ -

46,832,364

$ 4,684

$ 7,078,411

$ (1,553,756)

$ 5,529,339

(Unaudited)
 
 
Balance at December 31, 2017

-

$ -

-

$ -

-

$ -

47,046,364

$ 4,704

$ 7,005,553

$ (186,854)

$ 6,823,403

Stock options for compensation

-

-

-

-

-

-

-

-

28,875

-

28,875

Net (Loss)

-

-

-

-

-

-

-

-

-

(190,641)

(190,641)

Balance at March 31, 2018

-

-

-

-

-

-

47,046,364

$ 4,704

$ 7,034,428

$ (377,495)

$ 6,661,637

 
 
Stock options for compensation

-

-

-

-

-

-

-

-

28,874

-

28,874

Net (Loss)

-

-

-

-

-

-

-

-

-

(351,628)

(351,628)

Balance at June 30, 2018

-

$ -

-

$ -

-

$ -

47,046,364

$ 4,704

$ 7,063,302

$ (729,123)

$ 6,338,883

(Unaudited)
 
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 Six Months Ended

June 30,

 

2019

 

 

2018

CASH FLOWS FROM OPERATING ACTIVITIES:
 
Net loss

$

(355,844)

$

(542,269)

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

 

21,951

 

18,266

Stock based compensation expense

 

22,050

 

57,750

Provision (benefit) for deferred income tax

 

(12,000)

 

18,000

Increase (decrease) in accrued sales allowance

 

(191,468)

 

41,645

(Increase) decrease in accounts receivable, net

 

(2,514,256)

 

2,302,602

(Increase) other receivables

 

-

 

(78,250)

Decrease in inventories

 

27,497

 

132,318

(Increase) in prepaid and other

 

(107,802)

 

(548,017)

(Increase) decrease in deposits

 

40,112

 

(696)

Increase (decrease) in accounts payable and accrued liabilities

 

594,489

 

(1,222,828)

(Decrease) in deferred rent incentive

 

(50,166)

 

-

(Decrease) in income tax payable

 

-

 

(613,088)

(Increase) in income tax refundable

 

-

 

(346,912)

Net cash used in operating activities

 

(2,525,437)

 

(781,479)

 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment

 

(28,123)

 

(125,723)

Net cash used in investing activities

 

(28,123)

 

(125,723)

 
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of Shares

 

(35,878)

 

-

Net cash used in financing activities

 

(35,878)

 

-

 
Net Decrease in Cash

 

(2,589,438)

 

(907,202)

Cash at Beginning of Period

 

3,822,359

 

3,668,196

Cash at End of Period

$

1,232,921

$

2,760,994

 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest

$

-

$

-

Income taxes

$

-

$

865,000

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