Capstone Companies Reports Third Quarter 2019

Capstone Companies, Inc. (OTC: CAPC) (“Capstone” or the “Company”), a designer, manufacturer and marketer of consumer inspired products that bridge technological innovations with today’s lifestyle reported its financial results for the third quarter 2019.

Stewart Wallach, Capstone’s Chairman and CEO, commented, “our year-to-date numbers are indicative of management’s commitment to containing costs and sustaining revenues while addressing supply chain challenges resulting from China trade disputes.”

Mr. Wallach added, “concurrently the Company has developed and recently released its Smart Mirror program that will drive growth in 2020.”

Gerry McClinton, Capstone’s CFO, commented further, “We would note, these achievements have been financed through operating cash flow and did not result in the incurrence of any debt or interest.”

Webcast and Teleconference to Review Results and Outlook

The Company will host a live webcast and conference call on Monday, November 18, 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 dialling [phone]. The listen-only audio webcast can be monitored at www.capstonecompaniesinc.com.

A telephonic replay will be available from 1:30 p.m. ET the day of the call until Monday, November 25, 2019. To listen to the archived call, dial [phone] and enter conference ID number 13696116. 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, 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.

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
	September 30,			December 31,
	2019			2018
Assets:	(Unaudited)
Current Assets:
Cash	$	2,306,431		$	3,822,359
Accounts receivable, net		2,152,341			64,511
Inventories		-			27,497
Prepaid and other		136,517			243,876
Income tax refundable		220,207			220,207
Total Current Assets		4,815,496			4,378,450
Property and Equipment:
Computer equipment and software		53,819			51,195
Machinery and equipment		202,067			170,567
Furniture and fixtures		6,828			6,828
Less: Accumulated depreciation		(185,943)			(152,870)
Total Property & Equipment		76,771			75,720
Other Non-current Assets:
Deposit		26,893			102,805
Goodwill		1,936,020			1,936,020
Total Other Non-current Assets		1,962,913			2,038,825
Total Assets	$	6,855,180		$	6,492,995
Liabilities and Stockholders’ Equity:
Current Liabilities:
Accounts payable and accrued liabilities	$	915,450		$	461,446
Deferred rent incentive		33,529			108,844
Income tax payable		11,694			11,694
Total Current Liabilities		960,673			581,984
Long Term Liabilities:
Deferred tax liabilities		-			12,000
Total Long Term Liabilities		-			12,000
Total Liabilities		960,673			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 46,752,419 shares at September 30, 2019 and 47,046,364 shares at December 31, 2018		4,677			4,704
Additional paid-in capital		7,076,513			7,092,219
Accumulated deficit		(1,186,683)			(1,197,912)
Total Stockholders' Equity		5,894,507			5,899,011
Total Liabilities and Stockholders’ Equity	$	6,855,180		$	6,492,995
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 Nine Months Ended
		September 30,								September 30,
		2019				2018				2019				2018
Revenues, net		$		5,354,190		$		5,726,145		$		11,740,814		$		11,889,520
Cost of sales				(4,139,214)				(4,395,761)				(9,165,140)				(9,179,145)
Gross Profit				1,214,976				1,330,384				2,575,674				2,710,375
Operating Expenses:
Sales and marketing				102,193				359,715				329,463				838,323
Compensation				381,795				359,539				1,138,960				1,104,396
Professional fees				112,687				102,532				353,293				394,320
Product development				81,060				95,661				260,823				385,994
Other general and administrative				169,572				232,888				490,835				573,852
Total Operating Expenses				847,307				1,150,335				2,573,374				3,296,885
Operating Income (Loss)				367,669				180,049				2,300				(586,510)
Other Income (Expenses):
Other Income (Expense), Net				2,610				(1,960)				135				145,330
Interest Expense				(3,206)				-				(3,206)				-
Total Other Income (Expenses)				(596)				(1,960)				(3,071)				145,330
Income (Loss) Before Tax Benefit				367,073				178,089				(771)				(441,180)
Provision (Benefit) for Income Tax				-				6,000				(12,000)				(71,000)
Net Income (Loss)		$		367,073		$		172,089		$		11,229		$		(370,180)
Net Income (Loss) per Common Share
Basic		$		0.01		$		0.00		$		0.00		($		0.01)
Diluted		$		0.01		$		0.00		$		0.00		($		0.01)
Weighted Average Shares Outstanding
Basic				46,882,538				47,046,364				46,874,256				47,046,364
Diluted				46,882,538				47,046,364				46,874,256				47,046,364
The accompanying notes are an integral part of these condensed consolidated financial statements.

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
		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
(Unaudited)
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)
Stock options for compensation		-			-		-			-		-			-				-				-				9,732				-				9,732
Repurchase of shares		-			-		-			-		-			-				(79,945	)			(7	)			(11,630	)			-				(11,637	)
Net Income		-			-		-			-		-			-				-				-				-				367,073				367,073
Balance at September 30, 2019		-		$	-		-		$	-		-		$	-				46,752,419			$	4,677			$	7,076,513			$	(1,186,683	)		$	5,894,507
(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
(Unaudited)
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)
Stock options for compensation		-			-		-			-		-			-				-				-				17,892				-				17,892
Net Income		-			-		-			-		-			-				-				-				-				172,089				172,089
Balance at September 30, 2018		-		$	-		-		$	-		-		$	-				47,046,364			$	4,704			$	7,081,194			$	(557,034	)		$	6,528,864
(Unaudited)
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 Nine Months Ended
		September 30,
		2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss)		$	11,229		$	(370,180)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization			33,072			32,457
Stock based compensation expense			31,782			75,641
Provision (benefit) for deferred income tax			(12,000)			32,000
Increase (decrease) in accrued sales allowance			(106,448)			153,025
(Increase) decrease in accounts receivable, net			(1,981,382)			1,827,100
Decrease in inventories			27,497			132,318
Decrease in prepaid and other			107,359			74,805
(Increase) decrease in deposits			75,912			(1,139)
Increase (decrease) in accounts payable and accrued liabilities			454,004			(932,262)
Decrease in deferred rent incentive			(75,315)			-
Decrease in income tax payable			-			(613,088)
Increase in income tax refundable			-			(354,912)
Net cash provided by (used in) operating activities			(1,434,290)			55,765
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment			(34,123)			(130,665)
Net cash used in investing activities			(34,123)			(130,665)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of Shares			(47,515)			-
Net cash used in financing activities			(47,515)			-
Net Decrease in Cash			(1,515,928)			(74,900)
Cash at Beginning of Period			3,822,359			3,668,196
Cash at End of Period		$	2,306,431		$	3,593,296
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest		$	3,206		$	-
Income taxes		$	-		$	865,000
The accompanying notes are an integral part of these condensed consolidated financial statements.

 

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