Business Wire | Aug 16, 2021 04:00PM EDT

Capstone Companies Reports Second Quarter 2021 Performance

Aug. 16, 2021

DEERFIELD BEACH, Fla.--(BUSINESS WIRE)--Aug. 16, 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 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 41,692 120,064 receivable, net

Inventories 8,775 8,775

Prepaid 535,631 75,622 expenses

Income tax 285,673 861,318 refund

Total Current 2,676,027 2,289,549 Assets



Property and 118,852 54,852 Equipment, net

Operatinglease- right of 129,128 158,504 use asset

Deposit 11,148 25,560

Goodwill 1,312,482 1,312,482

Total Assets $ 4,247,637 $ 3,840,947



Liabilities andStockholders'Equity:

CurrentLiabilities:

Accountspayable and $ 885,986 $ 825,690 accruedliabilities

Operatinglease- current 66,659 63,307 portion

Total Current 952,645 888,997 Liabilities



Long-TermLiabilities:

Operatinglease- 73,779 107,690 long-termportion

Deferred taxliabilities 259,699 259,699 -long-term

Total Long-Term 333,478 367,389 Liabilities

Total 1,286,123 1,256,386 Liabilities



Commitments andContingencies: ( Note 5 )



Stockholders'Equity:

PreferredStock, SeriesA, par value$.001 per share, - - authorized6,666,667shares, issued-0- shares

PreferredStock, SeriesB-1, par value$.0001 pershare,authorized3,333,333shares, issued 15,000 shares 2 -at June 30,2021, nil atDecember 31,2020(LiquidationPreference$15,000)

PreferredStock, SeriesC, par value$1.00 per share, - -authorized 67shares, issued-0- shares

Common Stock,par value$.0001 pershare,authorized56,666,667 4,881 4,630 shares, issued48,793,031 atJune 30, 2021and 46,296,364at December 31,2020

Additional 8,503,611 7,053,328 paid-in capital

Accumulated (5,546,980 ) (4,473,397 )deficit

TotalStockholders' 2,961,514 2,584,561 Equity

TotalLiabilities and $ 4,247,637 $ 3,840,947 Stockholders'Equity

The accompanying notes are an integral part of these condensed consolidatedfinancial 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 marketing7,648

42,954

11,828

254,928

Compensation350,156

399,727

702,235

776,402

Professional fees76,317

109,707

203,541

240,237

Product development52,153

41,573

79,045

93,186

Other general and administrative94,522

107,548

197,644

251,914

Goodwill impairment charge-

200,707

-

490,766

Total Operating Expenses580,796

902,216

1,194,293

2,107,433

Operating Loss(580,796

)

(867,194

)

(1,065,646

)

(2,038,255

)

Other Income (Expense):Other income30,697

-

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 ShareBasic and Diluted$

(0.01

)

$

(0.01

)

$

(0.02

)

$

(0.03

)

Weighted Average Shares OutstandingBasic and Diluted48,655,851

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

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

(871,536 ) (309,776 ) (986,357 )Cost of sales -

35,022 128,647 69,178 Gross Profit -

OperatingExpenses:Sales and 7,648 42,954 11,828 254,928 marketingCompensation 350,156 399,727 702,235 776,402

Professional 76,317 109,707 203,541 240,237 feesProduct 52,153 41,573 79,045 93,186 developmentOther general 94,522 107,548 197,644 251,914 andadministrativeGoodwill 200,707 490,766 impairment - -chargeTotal 580,796 902,216 1,194,293 2,107,433 OperatingExpenses Operating Loss (580,796 ) (867,194 ) (1,065,646 ) (2,038,255 )

Other Income(Expense): 30,697 41,059 Other income - -

Other expense (24,498 ) (133 ) (48,996 ) (133 )

Total Other 6,199 (133 ) (7,937 ) (133 )Income(Expenses) Loss Before (574,597 ) (867,327 ) (1,073,583 ) (2,038,388 )Tax Benefit Benefit for (210,253 ) (783,938 )Income Tax - -

Net Loss $ (574,597 ) $ (657,074 ) $ (1,073,583 ) $ (1,254,450 )

Net Loss perCommon ShareBasic and $ (0.01 ) $ (0.01 ) $ (0.02 ) $ (0.03 )Diluted WeightedAverage SharesOutstandingBasic and 48,655,851 46,296,364 48,150,054 46,378,481 Diluted The accompanying notes are an integral part of these condensed consolidatedfinancial 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 fees2,496,667

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

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 $ $ - $ 46,296,364 $ 4,630 $ 7,053,328 $ (4,473,397 ) $ December 31, - - - - - 2,584,5612020 Stock 4,200 4,200 options for - - - - - - - - -compensationStock issued 15,000 48,994 48,996 to Directors - - 2 - - - - -for loan (498,986 ) (498,986 )Net Loss - - - - - - - - -

Balance at 15,000 46,296,364 4,630 7,106,522 (4,972,383 ) March, 31, - - 2 - - 2,138,7712021 Stock 4,200 4,200 options for - - - - - - - - -compensationCommon stock 2,496,667 1,392,889 1,393,140 for cash, 251net of fees (574,597 ) (574,597 )Net Loss - - - - - - - - -

Balance at $ 15,000 $ 2 $ 48,793,031 $ 4,881 $ 8,503,611 $ (5,546,980 ) $ June 30, - - - - 2,961,5142021 Balance at $ $ - $ 46,579,747 $ 4,658 $ 7,061,565 $ (2,089,581 ) $ December 31, - - - - - 4,976,6422019Stock 8,925 8,925 options for - - - - - - - - -compensationRepurchase (283,383 ) (28 ) (36,305 ) (36,333 )of shares - - - - - - -

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

Balance at 46,296,364 4,630 7,034,185 (2,686,957 ) March 31, - - - - - - 4,351,8582020 Stock 8,925 8,925 options for - - - - - - - - -compensation (657,074 ) (657,074 )Net Loss - - - - - - - - -

Balance at $ $ - $ 46,296,364 $ 4,630 $ 7,043,110 $ (3,344,031 ) $ June 30, - - - - - 3,703,7092020 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 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 amortization4,928

12,148

Stock based compensation expense8,400

17,850

Noncash stock issued to Director's for loan48,996

-

Noncash lease expense29,376

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, net155,474

(55,812

)

Decrease in inventories-

11,392

(Increase) decrease in prepaid expenses(460,009

)

93,292

Decrease in deposits14,412

34,873

Increase (decrease) in accounts payable and accrued liabilities(16,806

)

382,829

Increase (decrease) in income tax refundable575,645

(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 costs1,393,140

-

Repurchase of common stock-

(36,333

)

Net cash provided by financing activities1,393,140

53,267

Net Increase (Decrease) in Cash580,486

(1,008,520

)

Cash at Beginning of Period1,223,770

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/

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