Capstone Companies Reports Second Quarter 2019

- New LED products drive revenue in the quarter
- New Smart Home Electronics portfolio launches - www.capstoneconnectedhome.com
 

DEERFIELD BEACH, FL -- August 14, 2019 -- InvestorsHub NewsWire -- Capstone Companies, Inc. (OTC: CAPC) ("Capstone" or the "Company"), a designer, manufacturer and marketer of consumer inspired product that bridge tehcnological innovations with today's lifestyle reported its financial results for the second quarter 2019.

Stewart Wallach, Capstone's Chairman and CEO, commented, "as projected at our Q1 conference call, YTD revenues for our core LED business are strong.  The new product line has resonated well with consumers and we have invested significantly in marketing support to maintain this momentum through 2019."

Mr. Wallach added, " the Company continues to advance its initiative for transitioning its supply chain outside of China and expects to be shipping from new OEM partners in Q4 2019.  This will support the Company's competitiveness and help sustain normal revenue activity."

Gerry McClinton, Capstone's CFO, commented further, "in addition to the significant marketing investments metnioned by Mr. Wallach, we have underwritten the development of the Company's new smart home electronics portfolio without incurring debt."

Webcast and Teleconference To Review Results and Outlook

The Company will host a live webcast and conference call on Thursday, August 15, 2019 at 10:30 a.m., Eastern Time.  During the call, management will review the financial and operating results and discuss the Company's corporate strategy and outlook, followed by a question-and-answer session.  The conference call can be accessed by dialing (201) 689-8562.  The listen-only audio webcast can be monitored at www.capstonecompaniesinc.com.

A telephonic replay will be available from 1:30 p.m., Eastern Time the day of the call until Thursday, August 23, 2019.  To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13692244.  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 Hong Kong, Limited in the development, manufacturing and marketing of consumer product to retail channels throughout North America and international markets.

Visit www.capstonecompaniesinc.com for more information about the Company and www.capstoneindustries.com and www.capstoneconnectedhome.com for information on our current product offerings. 

FORWARD - LOOKING STATEMENTS:
This news release contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995, as amended.  Such statements consist of words like “anticipate,” “expect,” “project,” “continue” and similar words.  These statements are based on the Company’s and its subsidiaries’ current expectations and involve risks and uncertainties, which may cause results to differ materially from those set forth in the forward-looking statements.  Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include consumer acceptance of the Company’s products, its ability to deliver new products, the success of its strategy to broaden market channels and the relationships it has with retailers and distributors.  Prior success in operations does not necessarily mean success in future operations.  The ability of the Company to adequately and affordably fund operations and any growth will be critical to achieving and sustaining any expansion of markets and revenue.  The introduction of new products or the expanded availability of products does not mean that the Company will enjoy better financial or business performance. The risks associated with any investment in Capstone Companies, Inc., which is a small business concern and a "penny-stock Company” and, as such, a highly risky investment suitable for only those who can afford to lose such investment, should be evaluated together with the risks and uncertainties more fully described in the Company’s Annual and Quarterly Reports filed with the Securities and Exchange Commission.  Capstone Companies, Inc. undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.  Contents of referenced URLs are not incorporated into this press release.

Company:                               
Aimee Gaudet                         
Corporate Secretary                          
(954) 252-3440, ext. 313                    
                                               
FINANCIAL TABLES FOLLOW.  THE FOLLOWING SUMMARY FINANCIAL STATEMENT SHOULD BE READ ALONG WITH THE FORM 10-K 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,
  2019   2018
Assets: (Unaudited)    
Current Assets:      
   Cash  $            1,232,921    $      3,822,359
   Accounts receivable, net                2,770,235                 64,511
   Inventories                               -                 27,497
   Prepaid and other                   351,678               243,876
   Income tax refundable                   220,207               220,207
     Total Current Assets                4,575,041            4,378,450
       
Property and Equipment:      
   Computer equipment and software                     53,819                 51,195
   Machinery and equipment                   196,067               170,567
   Furniture and fixtures                       6,828                   6,828
   Less: Accumulated depreciation                  (174,822)             (152,870)
     Total Property & Equipment                     81,892                 75,720
       
Other Non-current Assets:      
   Deposit                     62,693               102,805
   Goodwill                1,936,020            1,936,020
      Total Other Non-current Assets                1,998,713            2,038,825
         Total Assets  $            6,655,646    $           6,492,995
       
Liabilities and Stockholders’ Equity:      
Current Liabilities:      
   Accounts payable and accrued liabilities  $            1,055,935    $         461,446
   Deferred rent incentive                     58,678               108,844
   Income tax payable                     11,694                 11,694
     Total Current Liabilities                 1,126,307                581,984
       
Long Term Liabilities:      
   Deferred tax liabilities                                -                    12,000
     Total Long Term Liabilities                               -                    12,000
     Total Liabilities                     1,126,307                  593,984
       
Commitments and Contingencies       
       
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 46,832,364 shares at June 30, 2019 and 47,046,364 shares at December 31, 2018                         4,684                      4,704
   Additional paid-in capital                   7,078,411                7,092,219
   Accumulated deficit                 (1,553,756)               (1,197,912)
     Total Stockholders' Equity                 5,529,339                5,899,011
     Total Liabilities and Stockholders’ Equity  $             6,655,646    $          6,492,995
       

 

  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,
        2019   2018   2019   2018
                     
Revenues, net        $   3,407,822    $       2,103,206    $        6,386,624    $   6,163,374
Cost of sales           (2,673,711)   (1,742,486)            (5,025,926)   (4,783,384)
        Gross Profit                734,111                360,720              1,360,698         1,379,990
                     
Operating Expenses:                    
  Sales and marketing                  35,395                115,547                 227,270            478,608
  Compensation                382,317                369,749                 757,165            744,858
  Professional fees                  82,803                142,900                 240,606            291,786
  Product development                  94,534                123,766                 179,763            290,332
  Other general and administrative                157,552                166,676                 321,263            340,965
       Total Operating Expenses                752,601                918,638              1,726,067         2,146,549
                     
Operating Loss                (18,490)              (557,918)               (365,369)          (766,559)
                     
Other Income (Expense), Net                    7,986                147,290                   (2,475)            147,290
                     
                     
Loss Before Tax (Benefit)                (10,504)              (410,628)               (367,844)          (619,269)
                     
(Benefit) for Income Tax                           -                (59,000)                 (12,000)            (77,000)
                     
Net Loss        $      (10,504)    $        (351,628)    $         (355,844)    $    (542,269)
                     
Net Loss per Common Share                    
Basic       ($0.00)   ($0.01)   ($0.01)   ($0.01)
Diluted       ($0.00)   ($0.01)   ($0.01)   ($0.01)
                     
Weighted Average Shares Outstanding                    
Basic       46,928,935   47,046,364   46,906,092   47,046,364
Diluted       46,928,935   47,046,364   46,906,092   47,046,364
                     
                     
CAPSTONE COMPANIES, INC. AND SUBSIDIARIES    
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY    
     
                                             
                                             
    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          -                 -               -                 -                  -                   -                       -                     -     11,025                         -     11,025
Repurchase of shares          -                 -               -                 -                  -                   -     (45,470)   (3)   (8,612)                         -     (8,615)
Net (Loss)           -                 -               -                 -                  -                   -                       -                     -                          -               
          (345,340)		          (345,340)
Balance at March 31, 2019          -                 -               -                 -                  -                   -        47,000,894    
$       4,701		    
$     7,094,632		    
$     (1,543,252)		    $   5,556,081
                                             
                                             
Stock options for compensation          -                 -               -                 -                  -                   -                       -                     -                  
             11,025		                         -                          
          11,025
Repurchase of shares          -                 -               -                 -                  -                   -              (168,530)              
(17)		             
(27,246)		                         -                 (27,263)
Net (Loss)           -                 -               -                 -                  -                   -                       -                     -                          -                 
            (10,504)		                    (10,504)
Balance at June 30, 2019          -      $         -               -      $         -                  -      $           -         46,832,364    $       4,684    $     7,078,411    $     (1,553,756)    $   5,529,339
      (Unaudited)                                            
                                             
                                             
Balance at December 31, 2017          -      $         -               -      $         -                  -      $           -          47,046,364    $       4,704    $     7,005,553      $        (186,854)    $   6,823,403
Stock options for compensation          -                 -               -                 -                  -                   -                       -                     -     28,875                         -                28,875
Net (Loss)           -                 -               -                 -                  -                   -                       -                     -                          -     (190,641)     (190,641)
Balance at March 31, 2018          -                 -               -                 -                  -                   -     47,046,364    $       4,704    $     7,034,428    $        (377,495)    $   6,661,637
                                             
                                             
Stock options for compensation          -                 -               -                 -                  -                   -                       -                     -                  28,874                         -     28,874
Net (Loss)           -                 -               -                 -                  -                   -                       -                     -                          -               
          (351,628)		                (351,628)
Balance at June 30, 2018          -      $         -               -      $         -                  -      $           -          47,046,364    $       4,704    $     7,063,302    $        (729,123)    $   6,338,883
      (Unaudited)                                            
CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
(Unaudited)
         
    For the  Six Months Ended
    June 30,
    2019   2018
CASH FLOWS FROM OPERATING ACTIVITIES:        
         
   Net loss    $         (355,844)    $         (542,269)
Adjustments to reconcile net loss to net cash used in operating activities:        
      Depreciation and amortization                  21,951                  18,266
      Stock based compensation expense                  22,050                  57,750
      Provision (benefit) for deferred income tax                 (12,000)                  18,000
      Increase (decrease) in accrued sales allowance               (191,468)                  41,645
     (Increase) decrease in accounts receivable, net            (2,514,256)             2,302,602
     (Increase) other receivables                            -                 (78,250)
      Decrease in inventories                  27,497                132,318
      (Increase) in prepaid and other               (107,802)               (548,017)
     (Increase) decrease in deposits                  40,112                      (696)
      Increase (decrease) in accounts payable and accrued liabilities                594,489            (1,222,828)
     (Decrease) in deferred rent incentive                 (50,166)                            -
     (Decrease) in income tax payable                            -               (613,088)
     (Increase) in income tax refundable                            -               (346,912)
  Net cash used in operating activities               (2,525,437)                (781,479)
         
CASH FLOWS FROM INVESTING ACTIVITIES:        
Purchase of property and equipment                 (28,123)               (125,723)
Net cash used in investing activities                 (28,123)               (125,723)
         
CASH FLOWS FROM FINANCING ACTIVITIES:        
Repurchase of Shares                 (35,878)    - 
Net cash used in financing activities                 (35,878)    - 
         
Net Decrease in Cash                   (2,589,438)               (907,202)
Cash at Beginning of Period                    3,822,359               3,668,196
Cash at End of Period    $               1,232,921    $       2,760,994
         
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:        
Cash paid during the period for:        
Interest    $                      -    $                    -  
Income taxes    $                      -    $          865,000
         
         
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