Business Wire | May 17, 2021 03:30PM EDT

Capstone Companies Reports First Quarter 2021 Performance

May 17, 2021

DEERFIELD BEACH, Fla.--(BUSINESS WIRE)--May 17, 2021--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 2021 financial results.

Gerry McClinton, Capstone's Chief Financial Officer, commented, "With equity funding now in place, we can focus on the Smart Mirror rollout, inventory build and social media expansion."

Stewart Wallach, Capstone's Chairman and Chief Executive Officer, added, "While financial performance has improved minimally as revenues increased, we will be updating our shareholder community on the progress of the Company's Smart Mirror program which is its future core business."

Webcast and Teleconference to Review Results and Outlook

Tuesday, May 18, 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 Tuesday, May 25, 2021. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13718602. 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



March 31, December 31,

2021 2020

Assets: (Unaudited)

Current Assets:

Cash $ 1,461,968 $ 1,223,770

Accounts receivable, net 167,102 120,064

Inventories 8,775 8,775

Prepaid expenses 67,787 75,622

Income tax refundable 285,673 861,318

Total Current Assets 1,991,305 2,289,549



Property and equipment, net 52,388 54,852

Operating lease - right of use asset 143,950 158,504

Deposit 25,560 25,560

Goodwill 1,312,482 1,312,482

Total Assets $ 3,525,685 $ 3,840,947



Liabilities and Stockholders' Equity:

Current Liabilities:

Accounts payable and accrued liabilities $ 971,366 $ 825,690

Operating lease - current portion 64,967 63,307

Total Current Liabilities 1,036,333 888,997



Long-Term Liabilities:

Operating lease - long-term portion 90,882 107,690

Deferred tax liabilities-long-term 259,699 259,699

Total Long-Term Liabilities 350,581 367,389

Total Liabilities 1,386,914 1,256,386



Commitments and Contingencies (Note 5)

Stockholders' Equity:

Preferred Stock, Series A, par value $.001per share, authorized 6,666,667 shares, - - issued -0- shares

Preferred Stock, Series B-1, par value$.0001 per share, authorized 3,333,333shares, issued 15,000 2 -

shares at March 31, 2021

Preferred Stock, Series C, par value $1.00per share, authorized 67 shares, issued -0- - - shares

Common Stock, par value $.0001 per share,authorized 56,666,667 shares, 'outstanding46,296,364 4,630 4,630

shares at March 31, 2021 and 46,296,364shares at December 31, 2020

Additional paid-in capital 7,106,522 7,053,328

Accumulated deficit (4,972,383 ) (4,473,397)

Total Stockholders' Equity 2,138,771 2,584,561

Total Liabilities and Stockholders' Equity $ 3,525,685 $ 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

March 31,

2021

2020

Revenues, net

$

438,423

$

148,977

Cost of sales

(309,776

)

(114,821

)

Gross Profit

128,647

34,156

Operating Expenses:

Sales and marketing

4,180

211,973

Compensation

352,079

376,675

Professional fees

127,224

130,530

Product development

26,892

51,614

Other general and administrative

103,122

144,366

Goodwill impairment charge

-

290,059

Total Operating Expenses

613,497

1,205,217

Operating Loss

(484,850

)

(1,171,061

)

Other Income (Expense):

Other income

10,362

-

Other expense

(24,498

)

-

Net Other Income (Expense)

(14,136

)

-

Loss Before Tax Benefit

(498,986

)

(1,171,061

)

Benefit for Income Tax

-

(573,685

)

Net Loss

$

(498,986)

$

(597,376)

Net Loss per Common Share

Basic and Diluted

$

(0.01)

$

(0.01)

Weighted Average Shares Outstanding

Basic and Diluted

46,296,364

46,463,365

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,

2021 2020



Revenues, net $ 438,423 $ 148,977

Cost of sales (309,776 ) (114,821 )

Gross Profit 128,647 34,156



Operating Expenses:

Sales and marketing 4,180 211,973

Compensation 352,079 376,675

Professional fees 127,224 130,530

Product development 26,892 51,614

Other general and administrative 103,122 144,366

Goodwill impairment charge - 290,059

Total Operating Expenses 613,497 1,205,217



Operating Loss (484,850 ) (1,171,061 )



Other Income (Expense):

Other income 10,362 -

Other expense (24,498 ) -

Net Other Income (Expense) (14,136 ) -



Loss Before Tax Benefit (498,986 ) (1,171,061 )



Benefit for Income Tax - (573,685 )



Net Loss $ (498,986) $ (597,376)



Net Loss per Common Share

Basic and Diluted $ (0.01) $ (0.01)



Weighted Average Shares Outstanding

Basic and Diluted 46,296,364 46,463,365











The accompanying notes are an integral part of these condensed consolidatedfinancial statements.

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND MARCH 31, 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 Director's 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

Balance at December 31, 2019

-

$

-

-

$

-

-

$

-

46,579,747

$4,658

$7,061,565

$(2,089,581)

$4,967,642

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

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, 2021 AND MARCH 31, 2020

(Unaudited)



Preferred Stock Preferred Stock Preferred Stock Additional

Series A Series B Series C Common Stock Paid-In Accumulated Total

Shares Par Shares Par Shares Par Shares Par Value Capital Deficit Equity Value Value Value



Balance at $December 31, - $ - - $ - - $ - 46,296,364 $4,630 $7,053,328 (4,473,397) $2,584,561 2020



Stockoptions for - - - - - - - - 4,200 - 4,200 compensation

Stock issuedto - - 15,000 2 - - - - 48,994 - 48,996 Director'sfor loan

Net Loss - - - - - - - - - (498,986 ) (498,986 )

Balance at $March 31, - $ - 15,000 $ 2 - $ - 46,296,364 $4,630 $7,106,522 (4,972,383) $2,138,771 2021





Balance at $December 31, - $ - - $ - - $ - 46,579,747 $4,658 $7,061,565 (2,089,581) $4,967,642 2019

Stockoptions for - - - - - - - - 8,925 8,925 compensation

Repurchase - - - - - - (283,383 ) (28 ) (36,305 ) - (36,333 )of shares

Net Loss - - - - - - - - - (597,376 ) (597,376 )

Balance atMarch 31, - $ - - $ - - $ - 46,296,364 $4,630 $7,034,185 $(2,686,957 ) $4,351,858 2020







The accompanying notes are an integral part of these condensed consolidatedfinancial statements.

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

For the Three Months Ended

March 31,

2021

2020

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss

$

(498,986

)

$

(597,376)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization

2,464

6,074

Stock based compensation expense

4,200

8,925

Non-cash stock issued to Director's for loan

24,498

-

Non-cash lease expense

14,554

13,583

Goodwill impairment charge

-

290,059

Provision for deferred income tax

-

172,287

Increase in accounts receivable, net

(47,038

)

(56,515)

Decrease in inventories

-

11,392

Decrease in prepaid expenses

32,333

42,199

Decrease in deposits

-

34,874

Increase in accounts payable and accrued liabilities

145,676

201,752

(Increase) decrease in income tax refundable

575,645

(745,972)

(Decrease) in operating lease liabilities

(15,148

)

(7,807)

Net cash provided by (used in) operating activities

238,198

(626,525)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment

-

(15,739)

Net cash used in investing activities

-

(15,739)

CASH FLOWS FROM FINANCING ACTIVITIES:

Repurchase of shares

-

(36,333)

Net cash used in financing activities

-

(36,333)

Net Increase (decrease) in Cash

238,198

(678,597)

Cash at Beginning of Period

1,223,770

3,131,249

Cash at End of Period

$

1,461,968

$

2,452,652

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid during the period for:

Interest

$

-

$

-

Income taxes

$

-

$

-

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Stocks issued to Directors for prepaid loan fee

$

24,498

$

-

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/20210517005850/en/

CONTACT: Company: Aimee C. Brown Corporate Secretary (954) 252-3440, ext. 313