CAPC - Capstone Companies Reports 2020 Year-End Performance
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. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210401005475/en/
Aimee C. Brown
Corporate Secretary
(954) 252-3440, ext. 313