Contacts

Aimee C. Brown

Corporate Secretary

(954) 252-3440, ext. 313

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 financial results for the full year 2020.

Gerry McClinton, Capstone’s Chief Financial Officer, commented, “we experienced an unprecedented decline in our revenues and earnings resulting from the impact of the COVID-19 pandemic. During this time however, the Company finalized the development of its Connected Surfaces program.”

Stewart Wallach, Capstone’s Chairman and Chief Executive Officer, commented, “As we put 2020 behind us, we turn our attention to the positive achievements our Company made while supply chains were shutdown and working conditions were compromised across the globe.”

Wallach added, “we will be discussing the introduction of our Smart Mirror program which is the most innovative and promising product category in our history. Frankly, it’s astonishing that we were able to finalize this program while battling the effects of COVID-19.”

Webcast and Teleconference to Review Results and Outlook

Thursday, April 1, 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 Thursday, April 8, 2021. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13716774. 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

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

For the Years Ended

 

 

 

 

December 31,

 

 

 

 

2020

 

2019

 
Revenues, net

$

2,770,358

 

$

12,404,445

 

Cost of sales

 

(2,266,592

)

 

(9,972,871

)

Gross Profit

 

503,766

 

 

2,431,574

 

 
Operating Expenses:
Sales and marketing

 

300,420

 

 

378,605

 

Compensation

 

1,515,522

 

 

1,554,286

 

Professional fees

 

422,820

 

 

435,143

 

Product development

 

249,879

 

 

348,745

 

Other general and administrative

 

477,121

 

 

647,696

 

Goodwill impairment charge

 

623,538

 

 

-

 

Total Operating Expenses

 

3,589,300

 

 

3,364,475

 

 
Operating Loss

 

(3,085,534

)

 

(932,901

)

 
Other Income (Expenses):
Other Income, Net

 

89,600

 

 

29,505

 

Interest Income (Expense)

 

179

 

 

(3,206

)

Total Other Income, net

 

89,779

 

 

26,299

 

 
Loss Before Tax Benefit

 

(2,995,755

)

 

(906,602

)

 
Benefit for Income Tax

 

(611,939

)

 

(14,933

)

 
Net Loss

$

(2,383,816

)

$

(891,669

)

 
Net Loss per Common Share
Basic and Diluted

($

0.05

)

($

0.02

)

 
Weighted Average Shares Outstanding
Basic and Diluted

 

46,337,198

 

 

46,863,467

 

 

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

 
 

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

 

December 31,

 

December 31,

 

2020

 

2019

Assets:
Current Assets:
Cash

$

1,223,770

 

$

3,131,249

 

Accounts receivable, net

 

120,064

 

 

13,459

 

Inventories

 

8,775

 

 

24,818

 

Prepaid expenses

 

75,622

 

 

182,782

 

Income tax refundable

 

861,318

 

 

220,207

 

Total Current Assets

 

2,289,549

 

 

3,572,515

 

 
Property and Equipment, net

 

54,852

 

 

65,649

 

Operating lease- right of use asset

 

158,504

 

 

214,202

 

Deposit

 

25,560

 

 

46,021

 

Goodwill

 

1,312,482

 

 

1,936,020

 

Total Assets

 

3,840,947

 

 

5,834,407

 

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

$

825,690

 

$

635,593

 

Operating lease- current portion

 

63,307

 

 

51,174

 

Total Current Liabilities

 

888,997

 

 

686,767

 

 
Long Term Liabilities:
Operating lease- long- term portion

 

107,690

 

 

170,998

 

Deferred tax liabilities- long-term

 

259,699

 

 

-

 

Total Long Term Liabilities

 

367,389

 

 

170,998

 

Total Liabilities

 

1,256,386

 

 

857,765

 

 
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 -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 46,296,364 shares at December 31, 2020 and 46,579,747 shares at December 31, 2019

 

4,630

 

 

4,658

 

Additional paid-in capital

 

7,053,328

 

 

7,061,565

 

Accumulated deficit

 

(4,473,397

)

 

(2,089,581

)

Total Stockholders' Equity

 

2,584,561

 

 

4,976,642

 

Total Liabilities and Stockholders’ Equity

$

3,840,947

 

$

5,834,407

 

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

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

For the Twelve Months Ended

 

 

December 31,

 

 

2020

 

2019

CASH FLOWS FROM OPERATING ACTIVITIES:
 
Net Loss

$

(2,383,816

)

$

(891,669

)

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

 

24,297

 

 

44,194

 

Stock based compensation expense

 

28,068

 

 

40,707

 

Noncash lease expense

 

55,698

 

 

20,248

 

Goodwill impairment charge

 

623,538

 

 

-

 

Deferred income tax benefit

 

-

 

 

(12,000

)

Increase in deferred income tax liabilities- long term

 

259,699

 

 

-

 

Non cash accounts receivable allowance

 

173,426

 

 

-

 

(Increase) decrease in accounts receivable, net

 

(106,605

)

 

51,052

 

Decrease in inventories

 

16,043

 

 

2,679

 

Increase in prepaid expenses

 

107,160

 

 

61,094

 

Decrease in deposits

 

20,461

 

 

56,784

 

Increase in accounts payable and accrued liabilities

 

16,671

 

 

174,147

 

Decrease in deferred rent incentive

 

-

 

 

(108,844

)

Decrease in income tax payable

 

-

 

 

(11,694

)

Increase in income tax refundable

 

(641,111

)

 

-

 

Decrease in operating lease liabilities

 

(51,175

)

 

(12,278

)

Net cash provided by used in operating activities

 

(1,857,646

)

 

(585,580

)

 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment

 

(13,500

)

 

(34,123

)

Net cash used in investing activities

 

(13,500

)

 

(34,123

)

 
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of Shares

 

(36,333

)

 

(71,407

)

Net cash used in financing activities

 

(36,333

)

 

(71,407

)

 
Net Decrease in Cash

 

(1,907,479

)

 

(691,110

)

Cash at Beginning of Year

 

3,131,249

 

 

3,822,359

 

Cash at End of Year

$

1,223,770

 

$

3,131,249

 

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

$

-

 

$

3,206

 

 
NON-CASH FINANCING AND INVESTING ACTIVITIES:
Operating lease- right-of-use asset at commencement

$

-

 

$

224,550

 

 
Operating lease liabilities at commencement

$

-

 

$

234,450

 

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

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

YEARS ENDED DECEMBER 31, 2020 AND 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

-

 

-

-

 

-

-

 

-

-

 

 

-

 

 

40,707

 

 

-

 

 

40,707

 

Repurchase of shares

(466,617

)

 

(46

)

 

(71,361

)

 

(71,407

)

Net Loss

-

 

-

-

 

-

-

 

-

-

 

 

-

 

 

-

 

 

(891,669

)

 

(891,669

)

Balance at December 31, 2019

-

 

-

-

 

-

-

 

-

46,579,747

 

 

4,658

 

 

7,061,565

 

 

(2,089,581

)

 

4,976,642

 

 
 
Stock options for compensation

-

 

-

-

 

-

-

 

-

-

 

 

-

 

 

28,068

 

 

-

 

 

28,068

 

Repurchase of shares

-

 

-

-

 

-

-

 

-

(283,383

)

 

(28

)

 

(36,305

)

 

-

 

 

(36,333

)

Net Loss

-

 

-

-

 

-

-

 

-

-

 

 

-

 

 

-

 

 

(2,383,816

)

 

(2,383,816

)

Balance at December 31, 2020

-

$

-

-

$

-

-

$

-

46,296,364

 

$

4,630

 

$

7,053,328

 

$

(4,473,397

)

$

2,584,561

 

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