CAPC - Capstone Companies Reports Second Quarter 2021 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 second quarter 2021 financial results.
Gerry McClinton, Capstone’s Chief Financial Officer, commented, “As a direct result of the continuing outbreaks of COVID throughout Thailand and China, the Company’s planned product launch for Q2 was delayed. As the Company’s entire 2021 focus is on its Smart Mirror campaign, there were no revenues generated in the second quarter. Despite having this unprecedented decline in revenue, for the six months ended June 30, 2021, Gross Profit increased by $59.5 thousand or 85.9% over 2020, total operating expenses of approximately $1.194 million was $913 thousand or 43.3% lower than last year and the net loss before tax benefit was $1.074 million as compared to $2.038 million in 2020, that’s $964 thousand or 47.3% lower than last year. We remained debt free, and we increased cash by $580 thousand during the period. The cost mitigation plan implemented last year has helped us to navigate through this difficult period.”
Stewart Wallach, Capstone’s Chairman & Chief Executive Officer, commented, “The first half of 2021 was unprecedented in many ways. We were faced with factory shutdowns, certification testing delays, supply chain bottlenecks, logistic costs rising which have collectively caused many other companies to cease operations. I am proud of our group that we have not just survived the challenges of the global pandemic, but we will very soon launch the most innovative product in Capstone’s history.”
He added, “I believe the worst is behind us and we are well positioned to maximize the market potential for the Smart Mirror campaign the balance of 2021.”
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.
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 |
|
|
|
|
| June 30, |
|
|
| December 31, |
|
|
| 2021 |
|
|
| 2020 |
| Assets: |
| (Unaudited) |
|
|
|
|
| Current Assets: |
| Cash |
| $ |
| 1,804,256 |
|
|
| $ |
| 1,223,770 |
|
|
| Accounts receivable, net |
|
|
| 41,692 |
|
|
|
|
| 120,064 |
|
|
| Inventories |
|
|
| 8,775 |
|
|
|
|
| 8,775 |
|
|
| Prepaid expenses |
|
|
| 535,631 |
|
|
|
|
| 75,622 |
|
|
| Income tax refund |
|
|
| 285,673 |
|
|
|
|
| 861,318 |
|
|
| Total Current Assets |
|
|
| 2,676,027 |
|
|
|
|
| 2,289,549 |
|
|
|
|
| Property and Equipment, net |
|
|
| 118,852 |
|
|
|
|
| 54,852 |
|
|
| Operating lease- right of use asset |
|
|
| 129,128 |
|
|
|
|
| 158,504 |
|
|
| Deposit |
|
|
| 11,148 |
|
|
|
|
| 25,560 |
|
|
| Goodwill |
|
|
| 1,312,482 |
|
|
|
|
| 1,312,482 |
|
|
| Total Assets |
| $ |
| 4,247,637 |
|
|
| $ |
| 3,840,947 |
|
|
|
|
| Liabilities and Stockholders’ Equity: |
| Current Liabilities: |
| Accounts payable and accrued liabilities |
| $ |
| 885,986 |
|
|
| $ |
| 825,690 |
|
|
| Operating lease- current portion |
|
|
| 66,659 |
|
|
|
|
| 63,307 |
|
|
| Total Current Liabilities |
|
|
| 952,645 |
|
|
|
|
| 888,997 |
|
|
|
|
| Long-Term Liabilities: |
| Operating lease- long-term portion |
|
|
| 73,779 |
|
|
|
|
| 107,690 |
|
|
| Deferred tax liabilities -long-term |
|
|
| 259,699 |
|
|
|
|
| 259,699 |
|
|
| Total Long-Term Liabilities |
|
|
| 333,478 |
|
|
|
|
| 367,389 |
|
|
| Total Liabilities |
|
|
| 1,286,123 |
|
|
|
|
| 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 June 30, 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 48,793,031 at June 30, 2021 and 46,296,364 at December 31, 2020 |
|
|
| 4,881 |
|
|
|
|
| 4,630 |
|
|
| Additional paid-in capital |
|
|
| 8,503,611 |
|
|
|
|
| 7,053,328 |
|
|
| Accumulated deficit |
|
|
| (5,546,980 |
| ) |
|
|
| (4,473,397 |
| ) |
| Total Stockholders' Equity |
|
|
| 2,961,514 |
|
|
|
|
| 2,584,561 |
|
|
| Total Liabilities and Stockholders’ Equity |
| $ |
| 4,247,637 |
|
|
| $ |
| 3,840,947 |
|
|
| 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 |
|
|
| For the Six Months Ended |
|
|
| June 30, |
|
|
| June 30, |
|
|
| 2021 |
|
|
| 2020 |
|
|
| 2021 |
|
|
| 2020 |
| Revenues, net |
| $ |
| - |
|
|
| $ |
| 906,558 |
|
|
| $ |
| 438,423 |
|
|
| $ |
| 1,055,535 |
|
|
| Cost of sales |
|
|
| - |
|
|
|
|
| (871,536 |
| ) |
|
|
| (309,776 |
| ) |
|
|
| (986,357 |
| ) |
| Gross Profit |
|
|
| - |
|
|
|
|
| 35,022 |
|
|
|
|
| 128,647 |
|
|
|
|
| 69,178 |
|
|
| Operating Expenses: |
| Sales and marketing |
|
|
| 7,648 |
|
|
|
|
| 42,954 |
|
|
|
|
| 11,828 |
|
|
|
|
| 254,928 |
|
|
| Compensation |
|
|
| 350,156 |
|
|
|
|
| 399,727 |
|
|
|
|
| 702,235 |
|
|
|
|
| 776,402 |
|
|
| Professional fees |
|
|
| 76,317 |
|
|
|
|
| 109,707 |
|
|
|
|
| 203,541 |
|
|
|
|
| 240,237 |
|
|
| Product development |
|
|
| 52,153 |
|
|
|
|
| 41,573 |
|
|
|
|
| 79,045 |
|
|
|
|
| 93,186 |
|
|
| Other general and administrative |
|
|
| 94,522 |
|
|
|
|
| 107,548 |
|
|
|
|
| 197,644 |
|
|
|
|
| 251,914 |
|
|
| Goodwill impairment charge |
|
|
| - |
|
|
|
|
| 200,707 |
|
|
|
|
| - |
|
|
|
|
| 490,766 |
|
|
| Total Operating Expenses |
|
|
| 580,796 |
|
|
|
|
| 902,216 |
|
|
|
|
| 1,194,293 |
|
|
|
|
| 2,107,433 |
|
|
| Operating Loss |
|
|
| (580,796 |
| ) |
|
|
| (867,194 |
| ) |
|
|
| (1,065,646 |
| ) |
|
|
| (2,038,255 |
| ) |
| Other Income (Expense): |
| Other income |
|
|
| 30,697 |
|
|
|
|
| - |
|
|
|
|
| 41,059 |
|
|
|
|
| - |
|
|
| Other expense |
|
|
| (24,498 |
| ) |
|
|
| (133 |
| ) |
|
|
| (48,996 |
| ) |
|
|
| (133 |
| ) |
| Total Other Income (Expenses) |
|
|
| 6,199 |
|
|
|
|
| (133 |
| ) |
|
|
| (7,937 |
| ) |
|
|
| (133 |
| ) |
| Loss Before Tax Benefit |
|
|
| (574,597 |
| ) |
|
|
| (867,327 |
| ) |
|
|
| (1,073,583 |
| ) |
|
|
| (2,038,388 |
| ) |
| Benefit for Income Tax |
|
|
| - |
|
|
|
|
| (210,253 |
| ) |
|
|
| - |
|
|
|
|
| (783,938 |
| ) |
| Net Loss |
| $ |
| (574,597 |
| ) |
| $ |
| (657,074 |
| ) |
| $ |
| (1,073,583 |
| ) |
| $ |
| (1,254,450 |
| ) |
| Net Loss per Common Share |
| Basic and Diluted |
| $ |
| (0.01 |
| ) |
| $ |
| (0.01 |
| ) |
| $ |
| (0.02 |
| ) |
| $ |
| (0.03 |
| ) |
| Weighted Average Shares Outstanding |
| Basic and Diluted |
|
|
| 48,655,851 |
|
|
|
|
| 46,296,364 |
|
|
|
|
| 48,150,054 |
|
|
|
|
| 46,378,481 |
|
|
| The accompanying notes are an integral part of these condensed consolidated financial statements |
| CAPSTONE COMPANIES, INC. AND SUBSIDIARIES |
| CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY |
| FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2021 AND JUNE 30, 2020 |
| (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, 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 |
|
|
| Stock options for compensation |
| - |
|
|
| - |
| - |
|
|
| - |
| - |
|
|
| - |
| - |
|
|
|
|
| - |
|
|
|
|
| 4,200 |
|
|
|
|
| - |
|
|
|
|
| 4,200 |
|
|
| Common stock for cash, net of fees |
| 2,496,667 |
|
|
|
|
| 251 |
|
|
|
|
| 1,392,889 |
|
|
|
|
| 1,393,140 |
|
|
| Net Loss |
| - |
|
|
| - |
| - |
|
|
| - |
| - |
|
|
| - |
| - |
|
|
|
|
| - |
|
|
|
|
| - |
|
|
|
|
| (574,597 |
| ) |
|
|
| (574,597 |
| ) |
| Balance at June 30, 2021 |
| - |
| $ |
| - |
| 15,000 |
| $ |
| 2 |
| - |
| $ |
| - |
| 48,793,031 |
|
|
| $ |
| 4,881 |
|
|
| $ |
| 8,503,611 |
|
|
| $ |
| (5,546,980 |
| ) |
| $ |
| 2,961,514 |
|
|
| Balance at December 31, 2019 |
| - |
| $ |
| - |
| - |
| $ |
| - |
| - |
| $ |
| - |
| 46,579,747 |
|
|
| $ |
| 4,658 |
|
|
| $ |
| 7,061,565 |
|
|
| $ |
| (2,089,581 |
| ) |
| $ |
| 4,976,642 |
|
|
| Stock options for compensation |
| - |
|
|
| - |
| - |
|
|
| - |
| - |
|
|
| - |
| - |
|
|
|
|
| - |
|
|
|
|
| 8,925 |
|
|
|
|
| - |
|
|
|
|
| 8,925 |
|
|
| Repurchase of shares |
| - |
|
|
| - |
| - |
|
|
| - |
| - |
|
|
| - |
| (283,383 |
| ) |
|
|
| (28 |
| ) |
|
|
| (36,305 |
| ) |
|
|
| - |
|
|
|
|
| (36,333 |
| ) |
| Net Loss |
| - |
|
|
| - |
| - |
|
|
| - |
| - |
|
|
| - |
| - |
|
|
|
|
| - |
|
|
|
|
| - |
|
|
|
|
| (597,376 |
| ) |
|
|
| (597,376 |
| ) |
| Balance at March 31, 2020 |
| - |
|
|
| - |
| - |
|
|
| - |
| - |
|
|
| - |
| 46,296,364 |
|
|
|
|
| 4,630 |
|
|
|
|
| 7,034,185 |
|
|
|
|
| (2,686,957 |
| ) |
|
|
| 4,351,858 |
|
|
| Stock options for compensation |
| - |
|
|
| - |
| - |
|
|
| - |
| - |
|
|
| - |
| - |
|
|
|
|
| - |
|
|
|
|
| 8,925 |
|
|
|
|
| - |
|
|
|
|
| 8,925 |
|
|
| Net Loss |
| - |
|
|
| - |
| - |
|
|
| - |
| - |
|
|
| - |
| - |
|
|
|
|
| - |
|
|
|
|
| - |
|
|
|
|
| (657,074 |
| ) |
|
|
| (657,074 |
| ) |
| Balance at June 30, 2020 |
| - |
| $ |
| - |
| - |
| $ |
| - |
| - |
| $ |
| - |
| 46,296,364 |
|
|
| $ |
| 4,630 |
|
|
| $ |
| 7,043,110 |
|
|
| $ |
| (3,344,031 |
| ) |
| $ |
| 3,703,709 |
|
|
| 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 Six Months Ended |
|
|
|
|
| June 30, |
|
|
|
|
| 2021 |
|
|
| 2020 |
| CASH FLOWS FROM OPERATING ACTIVITIES: |
| Net Loss |
| $ |
| (1,073,583 |
| ) |
| $ |
| (1,254,450 |
| ) |
| Adjustments to reconcile net loss to net cash used in operating activities: |
| Depreciation and amortization |
|
|
| 4,928 |
|
|
|
|
| 12,148 |
|
|
| Stock based compensation expense |
|
|
| 8,400 |
|
|
|
|
| 17,850 |
|
|
| Noncash stock issued to Director's for loan |
|
|
| 48,996 |
|
|
|
|
| - |
|
|
| Noncash lease expense |
|
|
| 29,376 |
|
|
|
|
| 27,371 |
|
|
| Unpaid accrued interest on paycheck protection program loan |
|
|
| - |
|
|
|
|
| 133 |
|
|
| Goodwill impairment charge |
|
|
| - |
|
|
|
|
| 490,766 |
|
|
| Provision for deferred income tax |
|
|
| - |
|
|
|
|
| 22,022 |
|
|
| Increase (decrease) in accounts receivable, net |
|
|
| 155,474 |
|
|
|
|
| (55,812 |
| ) |
| Decrease in inventories |
|
|
| - |
|
|
|
|
| 11,392 |
|
|
| (Increase) decrease in prepaid expenses |
|
|
| (460,009 |
| ) |
|
|
| 93,292 |
|
|
| Decrease in deposits |
|
|
| 14,412 |
|
|
|
|
| 34,873 |
|
|
| Increase (decrease) in accounts payable and accrued liabilities |
|
|
| (16,806 |
| ) |
|
|
| 382,829 |
|
|
| Increase (decrease) in income tax refundable |
|
|
| 575,645 |
|
|
|
|
| (806,800 |
| ) |
| Decrease in operating lease liabilities |
|
|
| (30,559 |
| ) |
|
|
| (21,662 |
| ) |
| Net cash used in operating activities |
|
|
| (743,726 |
| ) |
|
|
| (1,046,048 |
| ) |
| CASH FLOWS FROM INVESTING ACTIVITIES: |
| Purchase of property and equipment |
|
|
| (68,928 |
| ) |
|
|
| (15,739 |
| ) |
| Net cash used in investing activities |
|
|
| (68,928 |
| ) |
|
|
| (15,739 |
| ) |
| CASH FLOWS FROM FINANCING ACTIVITIES: |
| Proceeds from loan under paycheck protection program |
|
|
| - |
|
|
|
|
| 89,600 |
|
|
| Proceeds from sale of common stock, net of costs |
|
|
| 1,393,140 |
|
|
|
|
| - |
|
|
| Repurchase of common stock |
|
|
| - |
|
|
|
|
| (36,333 |
| ) |
| Net cash provided by financing activities |
|
|
| 1,393,140 |
|
|
|
|
| 53,267 |
|
|
| Net Increase (Decrease) in Cash |
|
|
| 580,486 |
|
|
|
|
| (1,008,520 |
| ) |
| Cash at Beginning of Period |
|
|
| 1,223,770 |
|
|
|
|
| 3,131,249 |
|
|
| Cash at End of Period |
| $ |
| 1,804,256 |
|
|
| $ |
| 2,122,729 |
|
|
| $ |
| - |
|
|
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
| Stocks issued to directors for prepaid loan fee |
| $ |
| 48,996 |
|
|
| $ |
| - |
|
|
| 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/20210816005611/en/
Aimee C. Brown
Corporate Secretary
(954) 252-3440, ext. 313