CAPC - Capstone Companies Reports First Quarter 2022 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 first quarter 2022 financial results on Monday, May 16, 2022.
Stewart Wallach, Chief Executive Officer, and Chairman of Capstone Companies, commented, “As a direct result of ongoing logistical delays brought on by scheduling backlogs and offloading congestion, the Company’s planned product launch for January 2022 was delayed and the inventories required for the launch campaigns were not available in our warehouse facilities until early March. As such, minimal mirror revenues took place in the quarter and our marketing efforts were fragmented.”
Gerry McClinton, Chief Financial Officer, noted, “We currently have an estimated $1.4 million of retail inventory available for customer shipments and additional orders placed to support replenishment. This is a tremendous portfolio, and we are determined to have it grow to its full potential.”
Wallach added, “We are now executing an ambitious marketing effort starting with new digital asset development to include hero video development to support our new messaging and brand image. We have engaged outside talent of the highest creative caliber and have raised additional working capital from inside to support this effort thru year end. I should add the raise is non-dilutive to the shareholders. I will be scheduling a strategic update webcast later in this week with details on our next steps.”
Wallach further commented, “The insiders and directors remain resolute and have continued to support the Company in every way possible. In the past 9 months $1.6 million of working capital was provided with favorable non-dilutive terms. In addition to the funding, the largest insider shareholders have not sold any shares. I realize our shareholder community is anxious and I am hopeful all will attend the strategic update webcast in the days ahead to gain insight into our newly energized marketing efforts going forward.”
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.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.
| CAPSTONE COMPANIES, INC. AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| March 31, |
| December 31, |
| 2022 |
| 2021 |
| Assets: |
| (Unaudited) |
| Current Assets: |
| Cash |
| $ |
| 623,991 |
|
|
| $ |
| 1,277,492 |
|
|
| Accounts receivable, net |
|
|
| 145,013 |
|
|
|
|
| 1,481 |
|
|
| Inventories |
|
|
| 1,035,196 |
|
|
|
|
| 508,920 |
|
|
| Prepaid expenses |
|
|
| 212,446 |
|
|
|
|
| 500,748 |
|
|
| ERTC- refundable |
|
|
| 152,000 |
|
|
|
|
| - |
|
|
| Income tax refundable |
|
|
| 53,718 |
|
|
|
|
| 284,873 |
|
|
| Total Current Assets |
|
|
| 2,222,364 |
|
|
|
|
| 2,573,514 |
|
|
| Property and equipment, net |
|
|
| 70,517 |
|
|
|
|
| 76,928 |
|
|
| Operating lease- right of use asset, net |
|
|
| 82,979 |
|
|
|
|
| 98,651 |
|
|
| Deposit |
|
|
| 11,148 |
|
|
|
|
| 11,148 |
|
|
| Goodwill |
|
|
| 1,312,482 |
|
|
|
|
| 1,312,482 |
|
|
| Total Assets |
| $ |
| 3,699,490 |
|
|
| $ |
| 4,072,723 |
|
|
| Liabilities and Stockholders’ Equity: |
| Current Liabilities: |
| Accounts payable and accrued liabilities |
| $ |
| 627,492 |
|
|
| $ |
| 538,551 |
|
|
| Operating lease- current portion |
|
|
| 71,953 |
|
|
|
|
| 70,157 |
|
|
| Total Current Liabilities |
|
|
| 699,445 |
|
|
|
|
| 608,708 |
|
|
| Long-Term Liabilities: |
| Operating lease- long-term portion |
|
|
| 18,930 |
|
|
|
|
| 37,533 |
|
|
| Note payable related parties and accrued interest |
|
|
| 1,042,915 |
|
|
|
|
| 1,030,340 |
|
|
| Deferred tax liabilities -long-term |
|
|
| 273,954 |
|
|
|
|
| 273,954 |
|
|
| Total Long-Term Liabilities |
|
|
| 1,335,799 |
|
|
|
|
| 1,341,827 |
|
|
| Total Liabilities |
|
|
| 2,035,244 |
|
|
|
|
| 1,950,535 |
|
|
| Commitments and Contingencies: ( Note 5 ) |
| Stockholders' Equity: |
| Preferred Stock, Series A, par value $.001 per share, authorized 6,666,667 shares, issued and outstanding -0- shares |
|
|
| - |
|
|
|
|
| - |
|
|
| Preferred Stock, Series B-1, par value $.0001 per share, authorized 3,333,333 shares, issued and outstanding- 15,000 shares at March 31, 2022, and December 31, 2021 (Liquidation Preference $15,000) |
|
|
| 2 |
|
|
|
|
| 2 |
|
|
| Preferred Stock, Series C, par value $1.00 per share, authorized 67 shares, issued and outstanding -0- shares |
|
|
| - |
|
|
|
|
| - |
|
|
| Common Stock, par value $.0001 per share, authorized 56,666,667 shares, issued and outstanding 48,893,031 shares at March 31, 2022 and December 31, 2021. |
|
|
| 4,892 |
|
|
|
|
| 4,892 |
|
|
| Additional paid-in capital |
|
|
| 8,557,682 |
|
|
|
|
| 8,554,320 |
|
|
| Accumulated deficit |
|
|
| (6,898,330 |
| ) |
|
|
| (6,437,026 |
| ) |
| Total Stockholders' Equity |
|
|
| 1,664,246 |
|
|
|
|
| 2,122,188 |
|
|
| Total Liabilities and Stockholders’ Equity |
| $ |
| 3,699,490 |
|
|
| $ |
| 4,072,723 |
|
|
| 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 |
| March 31, |
| 2022 |
| 2021 |
| Revenues, net |
| $ |
| 262,979 |
|
|
| $ |
| 438,423 |
|
|
| Cost of sales |
|
|
| (187,063 |
| ) |
|
|
| (309,776 |
| ) |
| Gross Profit |
|
|
| 75,916 |
|
|
|
|
| 128,647 |
|
|
| Operating Expenses: |
| Sales and marketing |
|
|
| 132,930 |
|
|
|
|
| 4,180 |
|
|
| Compensation |
|
|
| 196,553 |
|
|
|
|
| 352,079 |
|
|
| Professional fees |
|
|
| 156,462 |
|
|
|
|
| 127,224 |
|
|
| Product development |
|
|
| 51,560 |
|
|
|
|
| 26,892 |
|
|
| Other general and administrative |
|
|
| 140,073 |
|
|
|
|
| 103,122 |
|
|
| Total Operating Expenses |
|
|
| 677,578 |
|
|
|
|
| 613,497 |
|
|
| Operating Loss |
|
|
| (601,662 |
| ) |
|
|
| (484,850 |
| ) |
| Other Income (Expense): |
| Other Income, net |
|
|
| 152,000 |
|
|
|
|
| - |
|
|
| Interest expense, net |
|
|
| (11,642 |
| ) |
|
|
| (14,136 |
| ) |
| Total Other Income (Expense), net |
|
|
| 140,358 |
|
|
|
|
| (14,136 |
| ) |
| Loss Before Tax |
|
|
| (461,304 |
| ) |
|
|
| (498,986 |
| ) |
| Income Tax Expense (Benefit) |
|
|
| - |
|
|
|
|
| - |
|
|
| Net Loss |
| $ |
| (461,304 |
| ) |
| $ |
| (498,986 |
| ) |
| Net Loss per Common Share |
| Basic and Diluted |
| $ |
| (0.01 |
| ) |
| $ |
| (0.01 |
| ) |
| Weighted Average Shares Outstanding |
| Basic and Diluted I owe you the number |
|
|
| 48,893,031 |
|
|
|
|
| 46,296,364 |
|
|
| The accompanying notes are an integral part of these condensed consolidated financial statements |
| CAPSTONE COMPANIES, INC. AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY |
| FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND MARCH 31, 2021 |
| (Unaudited) |
| 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, 2021 |
| - |
| $ |
| - |
| 15,000 |
| $ |
| 2 |
| - |
| $ |
| - |
| 48,893,031 |
| $ |
| 4,892 |
| $ |
| 8,554,320 |
| $ |
| (6,437,026 |
| ) |
| $ |
| 2,122,188 |
|
|
| Stock options for compensation |
| - |
|
|
| - |
| - |
|
|
| - |
| - |
|
|
| - |
| - |
|
|
| - |
|
|
| 3,362 |
|
|
| - |
|
|
|
|
| 3,362 |
|
|
| Net Loss |
|
|
| (461,304 |
| ) |
|
|
| (461,304 |
| ) |
| Balance at March 31, 2022 |
| - |
|
|
| - |
| 15,000 |
| $ |
| 2 |
| - |
|
|
| - |
| 48,893,031 |
| $ |
| 4,892 |
| $ |
| 8,557,682 |
| $ |
| (6,898,330 |
| ) |
| $ |
| 1,664,246 |
|
|
| Balance at December 31, 2020 |
| - |
| $ |
| - |
| - |
| $ |
| - |
| - |
| $ |
| - |
| 46,296,364 |
| $ |
| 4,630 |
| $ |
| 7,053,328 |
| $ |
| (4,473,397 |
| ) |
| $ |
| 2,584,561 |
|
|
| Stock options for compensation |
| - |
|
|
| - |
| - |
|
|
| - |
| - |
|
|
| - |
| - |
|
|
| - |
|
|
| 4,200 |
|
|
| - |
|
|
|
|
| 4,200 |
|
|
| Stock issued to Directors for loan |
| 15,000 |
|
|
| 2 |
|
|
| 48,994 |
|
|
| 48,996 |
|
|
| Net Loss |
| - |
|
|
| - |
| - |
|
|
| - |
| - |
|
|
| - |
| - |
|
|
| - |
|
|
| - |
|
|
| (498,986 |
| ) |
|
|
| (498,986 |
| ) |
| Balance at March 31, 2021 |
| - |
| $ |
| - |
| 15,000 |
| $ |
| 2 |
| - |
| $ |
| - |
| 46,296,364 |
| $ |
| 4,630 |
| $ |
| 7,106,522 |
| $ |
| (4,972,383 |
| ) |
| $ |
| 2,138,771 |
|
|
| 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 Three Months Ended |
| March 31, |
| 2022 |
| 2021 |
| CASH FLOWS FROM OPERATING ACTIVITIES: |
| $ |
| (461,304 |
| ) |
| $ |
| (498,986 |
| ) |
| Adjustments to reconcile net loss to net cash used in operating activities: |
| Depreciation and amortization |
|
|
| 6,411 |
|
|
|
|
| 2,464 |
|
|
| Stock based compensation expense |
|
|
| 3,362 |
|
|
|
|
| 4,200 |
|
|
| Noncash lease expense |
|
|
| 15,672 |
|
|
|
|
| 14,554 |
|
|
| Non-cash stock issued to Director's for loan |
|
|
| - |
|
|
|
|
| 24,498 |
|
|
| Accrued interest added to note payable related parties |
|
|
| 12,575 |
|
|
|
|
| - |
|
|
| Increase in accounts receivable, net |
|
|
| (143,532 |
| ) |
|
|
| (47,038 |
| ) |
| Increase in inventories |
|
|
| (526,276 |
| ) |
|
|
| - |
|
|
| Decrease in prepaid expenses |
|
|
| 288,302 |
|
|
|
|
| 32,333 |
|
|
| Increase in accounts payable and accrued liabilities |
|
|
| 88,941 |
|
|
|
|
| 145,676 |
|
|
| Increase employee retention tax refundable |
|
|
| (152,000 |
| ) |
|
|
| - |
|
|
| Income tax refundable |
|
|
| 231,155 |
|
|
|
|
| 575,645 |
|
|
| Decrease in operating lease liabilities |
|
|
| (16,807 |
| ) |
|
|
| (15,148 |
| ) |
| Net cash (used) in provided by operating activities |
|
|
| (653,501 |
| ) |
|
|
| 238,198 |
|
|
| Net Increase (Decrease) in Cash |
|
|
| (653,501 |
| ) |
|
|
| 238,198 |
|
|
| Cash at Beginning of Period |
|
|
| 1,277,492 |
|
|
|
|
| 1,223,770 |
|
|
| Cash at End of Period |
| $ |
| 623,991 |
|
|
| $ |
| 1,461,968 |
|
|
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
| Stocks issued to directors for loan fee |
| $ |
| - |
|
|
| $ |
| 24,498 |
|
|
| Cash paid for interest |
| $ |
| - |
|
|
| $ |
| - |
|
|
| Cash paid for income taxes |
| $ |
| - |
|
|
| $ |
| - |
|
|
| 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/20220516005502/en/
Aimee C. Brown
Corporate Secretary of Company
(954) 252-3440, ext. 313