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 first quarter 2019.
Stewart Wallach, Capstone’s Chairman and CEO, commented, “2019 is off to
a good start as strong retail sell through of new LED products fuel the
Company’s backlog.”
Mr. Wallach added, “with our current backlog approximating all of 2018
sales, the Company pushes forward optimistically. The timing for the
addition of our new product portfolio couldn’t be better as our core
business remains stable and cash flows remain strong.”
Gerry McClinton, Capstone’s CFO, commented further, “our cash management
has enabled the Company to make significant investments in our 2019
growth strategies. While sales are growing, and our new product
portfolio evolves the Company continues to support these initiatives
without incurring debt in the quarter.”
Webcast and Teleconference to Review Results and Outlook
The Company will host a live webcast and conference call on Thursday,
May 16, 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
dialing (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, May 23, 2019. To listen to the archived call, dial
(412) 317-6671 and enter conference ID number 13686341. 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
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 STATEMENTS OF OPERATIONS | ||||||||
| (Unaudited) | ||||||||
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2019 | 2018 | |||||||
| Revenues, net | $ | 2,978,802 | $ | 4,060,168 | ||||
| Cost of sales | (2,352,215) | (3,040,897) | ||||||
| Gross Profit | 626,587 | 1,019,271 | ||||||
| Operating Expenses: | ||||||||
| Sales and marketing | 191,875 | 363,061 | ||||||
| Compensation | 374,848 | 375,110 | ||||||
| Professional fees | 157,803 | 148,887 | ||||||
| Product development | 85,229 | 166,566 | ||||||
| Other general and administrative | 163,711 | 174,288 | ||||||
| Total Operating Expenses | 973,466 | 1,227,912 | ||||||
| Operating Loss | (346,879) | (208,641) | ||||||
| Other Expenses, Net | (10,461) | – | ||||||
| Loss Before Tax (Benefit) | (357,340) | (208,641) | ||||||
| (Benefit) for Income Tax | (12,000) | (18,000) | ||||||
| Net Loss | $ | (345,340) | $ | (190,641) | ||||
| Net Loss per Common Share | ||||||||
| Basic | ($0.007) | ($0.004) | ||||||
| Diluted | ($0.007) | ($0.004) | ||||||
| Weighted Average Shares Outstanding | ||||||||
| Basic | 47,033,670 | 47,046,364 | ||||||
| Diluted | 47,033,670 | 47,046,364 | ||||||
|
The accompanying notes are an integral part of these condensed consolidated financial statements. |
||||||||
| CAPSTONE COMPANIES, INC. AND SUBSIDIARIES | |||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
| March 31, | December 31, | ||||||
| 2019 | 2018 | ||||||
| Assets: | (Unaudited) | ||||||
| Current Assets: | |||||||
| Cash | $ | 1,622,844 | $ | 3,822,359 | |||
| Accounts receivable, net | 2,376,699 | 64,511 | |||||
| Inventories | 17,301 | 27,497 | |||||
| Prepaid expenses | 76,724 | 243,876 | |||||
| Income tax refundable | 220,207 | 220,207 | |||||
| Total Current Assets | 4,313,775 | 4,378,450 | |||||
| Property and Equipment: | |||||||
| Computer equipment and software | 51,195 | 51,195 | |||||
| Machinery and equipment | 170,567 | 170,567 | |||||
| Furniture and fixtures | 6,828 | 6,828 | |||||
| Less: Accumulated depreciation | (163,700) | (152,870) | |||||
| Total Property & Equipment | 64,890 | 75,720 | |||||
| Other Non-current Assets: | |||||||
| Deposit | 103,193 | 102,805 | |||||
| Goodwill | 1,936,020 | 1,936,020 | |||||
| Total Other Non-current Assets | 2,039,213 | 2,038,825 | |||||
| Total Assets | $ | 6,417,878 | $ | 6,492,995 | |||
| Liabilities and Stockholders’ Equity: | |||||||
| Current Liabilities: | |||||||
| Accounts payable and accrued liabilities | $ | 766,276 | $ | 461,446 | |||
| Deferred rent incentive | 83,827 | 108,844 | |||||
| Income tax payable | 11,694 | 11,694 | |||||
| Total Current Liabilities | 861,797 | 581,984 | |||||
| Long Term Liabilities: | |||||||
| Deferred tax liabilities | – | 12,000 | |||||
| Total Long Term Liabilities | – | 12,000 | |||||
| Total Liabilities | 861,797 | 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 47,000,894 shares at March 31, 2019 and 47,046,364 shares at December 31, 2018 |
4,701 | 4,704 | |||||
| Additional paid-in capital | 7,094,632 | 7,092,219 | |||||
| Accumulated deficit | (1,543,252) | (1,197,912) | |||||
| Total Stockholders’ Equity | 5,556,081 | 5,899,011 | |||||
| Total Liabilities and Stockholders’ Equity | $ | 6,417,878 | $ | 6,492,995 | |||
|
The accompanying notes are an integral part of these condensed |
|||||||
| CAPSTONE COMPANIES, INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY | |||||||||||||||||||||||||||||||||||||||||
| FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND MARCH 31, 2018 | |||||||||||||||||||||||||||||||||||||||||
| 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 | |||||||||||||||||||||||
| (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 | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||||||||
|
The accompanying notes are an integral part of these condensed consolidated financial statements. |
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| CAPSTONE COMPANIES, INC. AND SUBSIDIARIES | |||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| (Unaudited) | |||||||
| For the Three Months Ended | |||||||
| March 31, | |||||||
| 2019 | 2018 | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
| Net loss | $ | (345,340) | $ | (190,641) | |||
|
Adjustments to reconcile net (loss) to net cash provided by (used in) operating activities: |
|||||||
| Depreciation and amortization | 10,830 | 9,133 | |||||
| Stock based compensation expense | 11,025 | 28,875 | |||||
| Provision (benefit) for deferred income tax | (12,000) | 9,000 | |||||
| (Decrease) in accrued sales allowance | (191,468) | (20,635) | |||||
| (Increase) decrease in accounts receivable, net | (2,093,279) | 1,689,880 | |||||
| Decrease in inventories | 10,196 | 77,950 | |||||
| Decrease in prepaid expenses | 167,152 | 160,569 | |||||
| (Increase) in deposits | (388) | – | |||||
| Increase (decrease) in accounts payable and accrued liabilities | 277,389 | (843,679) | |||||
| (Decrease) in deferred rent incentive | (25,017) | – | |||||
| (Decrease) in income tax payable | – | (613,088) | |||||
| (Increase) in income tax refundable | – | (113,912) | |||||
| Net cash provided by (used in) operating activities | (2,190,900) | 193,452 | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
| Repurchase of Shares | (8,615) | – | |||||
| Net cash (used in) financing activities | (8,615) | – | |||||
| Net Increase (Decrease) in Cash | (2,199,515) | 193,452 | |||||
| Cash at Beginning of Period | 3,822,359 | 3,668,196 | |||||
| Cash at End of Period | $ | 1,622,844 | $ | 3,861,648 | |||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||||||
| Cash paid during the period for: | |||||||
| Interest | $ | – | $ | – | |||
| Income taxes | $ | – | $ | 700,000 | |||
|
The accompanying notes are an integral part of these condensed consolidated financial statements. |
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