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 2021.
Gerry McClinton, Capstone’s Chief Financial Officer, commented, “The Product Development team fought through 2 years of pandemic related delays in order to finalize the Smart Mirror portfolio. With inventory now available, Management has refocused on Strategic Development and Financial Management for future growth.”
Stewart Wallach, Capstone’s Chairman and Chief Executive Officer, commented, “Our company experienced firsthand what it is like to be tested at every level in every way during 2021.”
Mr. Wallach added, “Management’s business acumen guided us through a maze of business obstacles that could never have been anticipated.”
Webcast and Teleconference to Review Results and Outlook
Friday, April 1, 2022
10:30 a.m. Eastern Time
Phone: (201) 689-8562
A telephonic replay will be available from 1:30 p.m. ET the day of the call until Friday, April 8, 2022. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13728169. 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 | |||||||
| December 31, | December 31, | ||||||
|
2021 |
2020 |
||||||
| Assets: | |||||||
| Current Assets: | |||||||
| Cash |
$ |
1,277,492 |
|
$ |
1,223,770 |
|
|
| Accounts receivable, net |
|
1,481 |
|
|
120,064 |
|
|
| Inventories |
|
508,920 |
|
|
8,775 |
|
|
| Prepaid expenses |
|
500,748 |
|
|
75,622 |
|
|
| Income tax refund |
|
284,873 |
|
|
861,318 |
|
|
| Total Current Assets |
|
2,573,514 |
|
|
2,289,549 |
|
|
| Property and equipment, net |
|
76,928 |
|
|
54,852 |
|
|
| Operating lease- right of use asset |
|
98,651 |
|
|
158,504 |
|
|
| Deposit |
|
11,148 |
|
|
25,560 |
|
|
| Goodwill |
|
1,312,482 |
|
|
1,312,482 |
|
|
| Total Assets |
$ |
4,072,723 |
|
$ |
3,840,947 |
|
|
| Liabilities and Stockholders’ Equity: | |||||||
| Current Liabilities: | |||||||
| Accounts payable and accrued liabilities |
$ |
538,551 |
|
$ |
825,690 |
|
|
| Operating lease- current portion |
|
70,157 |
|
|
63,307 |
|
|
| Total Current Liabilities |
|
608,708 |
|
|
888,997 |
|
|
| Long-Term Liabilities: | |||||||
| Operating lease- long-term portion |
|
37,533 |
|
|
107,690 |
|
|
| Note payable related party |
|
1,030,340 |
|
|
– |
|
|
| Deferred tax liabilities -long-term |
|
273,954 |
|
|
259,699 |
|
|
| Total Long-Term Liabilities |
|
1,341,827 |
|
|
367,389 |
|
|
| Total Liabilities |
|
1,950,535 |
|
|
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 December 31, 2021, nil at December 31, 2020 (Liquidation Preference $15,000) |
|
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, issued 48,893,031 at December 31, 2021 and 46,296,364 at December 31, 2020 |
|
4,892 |
|
|
4,630 |
|
|
| Additional paid-in capital |
|
8,554,320 |
|
|
7,053,328 |
|
|
| Accumulated deficit |
|
(6,437,026 |
) |
|
(4,473,397 |
) |
|
| Total Stockholders’ Equity |
|
2,122,188 |
|
|
2,584,561 |
|
|
| Total Liabilities and Stockholders’ Equity |
$ |
4,072,723 |
|
$ |
3,840,947 |
|
|
| The accompanying notes are an integral part of these consolidated financial statements. | |||||||
|
CAPSTONE COMPANIES, INC. AND SUBSIDIARIES |
|||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||
| For the Years Ended | |||||||
| December 31, | |||||||
|
2021 |
2020 |
||||||
| Revenues, net |
$ |
685,854 |
|
$ |
2,770,358 |
|
|
| Cost of sales |
|
(638,644 |
) |
|
(2,266,592 |
) |
|
| Gross Profit |
|
47,210 |
|
|
503,766 |
|
|
| Operating Expenses: | |||||||
| Sales and marketing |
|
28,568 |
|
|
300,420 |
|
|
| Compensation |
|
1,276,503 |
|
|
1,515,522 |
|
|
| Professional fees |
|
368,229 |
|
|
422,820 |
|
|
| Product development |
|
308,823 |
|
|
249,879 |
|
|
| Other general and administrative |
|
420,962 |
|
|
477,121 |
|
|
| Goodwill impairment charge |
|
– |
|
|
623,538 |
|
|
| Total Operating Expenses |
|
2,403,085 |
|
|
3,589,300 |
|
|
| Operating Loss |
|
(2,355,875 |
) |
|
(3,085,534 |
) |
|
| Other Income (Expense): | |||||||
| Other Income, net |
|
456,275 |
|
|
89,600 |
|
|
| Interest Income (Expense) |
|
(48,974 |
) |
|
179 |
|
|
| Total Other Income (Expense) |
|
407,301 |
|
|
89,779 |
|
|
| Loss Before Tax Benefit |
|
(1,948,574 |
) |
|
(2,995,755 |
) |
|
| (Benefit) for Income Tax |
|
15,055 |
|
|
(611,939 |
) |
|
| Net Loss |
$ |
(1,963,629 |
) |
$ |
(2,383,816 |
) |
|
| Net Loss per Common Share | |||||||
| Basic and Diluted |
$ |
(0.04 |
) |
$ |
(0.05 |
) |
|
| Weighted Average Shares Outstanding | |||||||
| Basic and Diluted |
|
50,600,298 |
|
|
46,337,198 |
|
|
| The accompanying notes are an integral part of these consolidated financial statements | |||||||
| CAPSTONE COMPANIES, INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY | |||||||||||||||||||||||||||||||||
| YEARS ENDED DECEMBER 31, 2021 AND 2020 | |||||||||||||||||||||||||||||||||
| Preferred Stock | Preferred Stock | Preferred Stock | Additional | ||||||||||||||||||||||||||||||
| Series A | Series B | Series C | Common Stock | Paid-In | Accumulated | Total | |||||||||||||||||||||||||||
| Shares |
Par |
Shares | Par Value |
Shares | Par Value |
Shares | Par Value |
Capital | Deficit | Equity | |||||||||||||||||||||||
| 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 |
|
||||||||||
| Balance at December 31, 2020 |
– |
$ |
– |
– |
$ |
– |
– |
$ |
– |
46,296,364 |
|
$ |
4,630 |
|
$ |
7,053,328 |
|
$ |
(4,473,397 |
) |
$ |
2,584,561 |
|
||||||||||
| Stock options for compensation |
– |
|
– |
– |
|
– |
– |
|
– |
– |
|
|
– |
|
|
15,619 |
|
|
– |
|
|
15,619 |
|
||||||||||
| Stock issued to Directors for loan |
15,000 |
|
2 |
|
48,994 |
|
|
48,996 |
|
||||||||||||||||||||||||
| Common stock for cash, net of fees |
– |
|
– |
2,596,667 |
|
|
262 |
|
|
1,436,379 |
|
|
1,436,641 |
|
|||||||||||||||||||
| Net Loss |
– |
|
– |
– |
|
– |
– |
|
– |
– |
|
|
– |
|
|
– |
|
|
(1,963,629 |
) |
|
(1,963,629 |
) |
||||||||||
| Balance at December 31, 2021 |
– |
$ |
– |
15,000 |
$ |
2 |
– |
$ |
– |
48,893,031 |
|
$ |
4,892 |
|
$ |
8,554,320 |
|
$ |
(6,437,026 |
) |
$ |
2,122,188 |
|
||||||||||
| The accompanying notes are an integral part of these consolidated financial statements | |||||||||||||||||||||||||||||||||
| CAPSTONE COMPANIES, INC. AND SUBSIDIARIES | |||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| For the Twelve Months Ended | |||||||
| December 31, | |||||||
|
2021 |
2020 |
||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
| Net Loss |
$ |
(1,963,629 |
) |
$ |
(2,383,816 |
) |
|
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
| Depreciation and amortization |
|
9,852 |
|
|
24,297 |
|
|
| Stock based compensation expense |
|
15,619 |
|
|
28,068 |
|
|
| Noncash lease expense |
|
59,853 |
|
|
55,698 |
|
|
| Goodwill impairment charge |
|
– |
|
|
623,538 |
|
|
| Stock issued to Director’s for loan |
|
48,996 |
|
|
– |
|
|
| Increase in deferred income tax liabilities-long term |
|
14,255 |
|
|
259,699 |
|
|
| Noncash accounts receivable allowance |
|
– |
|
|
173,426 |
|
|
| (Increase) decrease in accounts receivable, net |
|
118,583 |
|
|
(106,605 |
) |
|
| (Increase) decrease in inventories |
|
(500,145 |
) |
|
16,043 |
|
|
| (Increase) decrease in prepaid expenses |
|
(425,126 |
) |
|
107,160 |
|
|
| Decrease in deposits |
|
14,412 |
|
|
20,461 |
|
|
| (Decrease) increase in accounts payable and accrued liabilities |
|
(287,139 |
) |
|
16,671 |
|
|
| (Increase) decrease in income tax refund |
|
576,445 |
|
|
(641,111 |
) |
|
| Decrease in operating lease liabilities |
|
(63,307 |
) |
|
(51,175 |
) |
|
| Net cash used in operating activities |
|
(2,381,331 |
) |
|
(1,857,646 |
) |
|
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
| Purchases of property and equipment |
|
(31,928 |
) |
|
(13,500 |
) |
|
| Net cash used in investing activities |
|
(31,928 |
) |
|
(13,500 |
) |
|
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
| Proceeds from sale of common stock, net of costs |
|
1,436,641 |
|
|
– |
|
|
| Note payable- related party |
|
1,030,340 |
|
|
– |
|
|
| Repurchase of shares |
|
– |
|
|
(36,333 |
) |
|
| Net cash provided (used) in financing activities |
|
2,466,981 |
|
|
(36,333 |
) |
|
| Net Increase (Decrease) in Cash |
|
53,722 |
|
|
(1,907,479 |
) |
|
| Cash at Beginning of Year |
|
1,223,770 |
|
|
3,131,249 |
|
|
| Cash at End of Period |
$ |
1,277,492 |
|
$ |
1,223,770 |
|
|
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||||||
| Stocks issued to directors for loan fee |
$ |
48,996 |
|
$ |
– |
|
|
| Interest accrued note payable related party |
$ |
10,340 |
|
$ |
– |
|
|
| The accompanying notes are an integral part of these consolidated financial statements. | |||||||
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