Capstone Companies Reports 2019 Year-End Performance

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 full year 2019.

Gerry McClinton, Capstone’s CFO, commented, “in a year of uncertainties compounded by the U.S.- China trade war, the Company accomplished its stated main objectives as it transitioned into a new business model without incurring any debt.”

Stewart Wallach, Capstone’s Chairman and CEO, commented, “our company was tested throughout 2019. I am proud to say management rose to the occasion. While combating the impact and related fallout resulting from the tariff penalties, management repositioned the company with an exciting product portfolio that offers significant growth potential as it enters the 20s.”

Wallach added, “our decision to enter the Smart Home segment with Capstone Connected surfaces was timely as Smart Home products become more mainstream.”

Webcast and Teleconference to Review Results and Outlook

The Company will host a pre-recorded webcast and conference call on Tuesday, March 31, 2020 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. 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 Tuesday, April 7, 2019. To listen to the archived call, dial [phone] and enter conference ID number 13699670. 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 international markets.

Visit our websites; 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.

Important Message Regarding COVID – 19

As the COVID-19 pandemic continues to spread around the world, Capstone is considering all recommended and required steps to ensure its employees’ health and safety in its workplaces.

We are following closely the recommendations of the Center for Disease Control and Prevention, Department of Homeland Security, State Department and local government guidelines and recommendations and the World Health Organization guidelines as applicable to our overseas’ offices.

We are committed to maintaining business reporting; however, we may need to modify the norm in doing so due to employees working remotely and the possibility of temporary office closures.

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
CONSOLIDATED STATEMENTS OF OPERATIONS
		For the Years Ended
		December 31,
			2019				2018
Revenues, net		$	12,404,445			$	12,830,324
Cost of sales			(9,972,871	)			(9,936,745	)
Gross Profit			2,431,574				2,893,579
Operating Expenses:
Sales and marketing			378,605				915,205
Compensation			1,554,286				1,502,590
Professional fees			435,143				510,022
Product development			348,745				518,969
Other general and administrative			647,696				691,466
Total Operating Expenses			3,364,475				4,138,252
Operating Loss			(932,901	)			(1,244,673	)
Other Income (Expenses):
Other Income (Expense), Net			29,505				(55,360	)
Interest Expense			(3,206	)			-
Total Other Income (Expenses)			26,299				(55,360	)
Loss Before Tax Benefit			(906,602	)			(1,300,033	)
Benefit for Income Tax			(14,933	)			(288,975	)
Net Loss		$	(891,669	)		$	(1,011,058	)
Net Loss per Common Share
Basic		($	0.02	)		($	0.02	)
Diluted		($	0.02	)		($	0.02	)
Weighted Average Shares Outstanding
Basic			46,863,467				47,046,364
Diluted			46,863,467				47,046,364
The accompanying notes are an integral part of these consolidated financial statements

	CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
	CONSOLIDATED BALANCE SHEETS
		December 31,				December 31,
			2019				2018
	Assets:
	Current Assets:
	Cash	$	3,131,249			$	3,822,359
	Accounts receivable, net		13,459				64,511
	Inventories		24,818				27,497
	Prepaid expenses		182,782				243,876
	Income tax refundable		220,207				220,207
	Total Current Assets		3,572,515				4,378,450
	Property and Equipment, net		65,649				75,720
	Operating lease- right of use asset		214,202				-
	Deposit		46,021				102,805
	Goodwill		1,936,020				1,936,020
	Total Assets		5,834,407				6,492,995
	Liabilities and Stockholders’ Equity:
	Current Liabilities:
	Accounts payable and accrued liabilities	$	635,593			$	461,446
	Deferred rent incentive		-				108,844
	Operating lease- current portion		51,174				-
	Income tax payable		-				11,694
	Total Current Liabilities		686,767				581,984
	Long Term Liabilities:
	Operating lease- long term portion		170,998				-
	Deferred tax liabilities		-				12,000
	Total Long Term Liabilities		170,998				12,000
	Total Liabilities		857,765				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 46,579,747 shares at December 31, 2019 and 47,046,364 shares at December 31, 2018		4,658				4,704
	Additional paid-in capital		7,061,565				7,092,219
	Accumulated deficit		(2,089,581	)			(1,197,912	)
	Total Stockholders' Equity		4,976,642				5,899,011
	Total Liabilities and Stockholders’ Equity	$	5,834,407			$	6,492,995
	The accompanying notes are an integral part of these condensed consolidated financial statements.

	CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
	CONSOLIDATED STATEMENTS OF CASH FLOWS
			For the Twelve Months Ended
			December 31,
				2019				2018
	CASH FLOWS FROM OPERATING ACTIVITIES:
	Net Loss		$	(891,669	)		$	(1,011,058	)
	Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
	Depreciation and amortization			44,194				45,510
	Stock based compensation expense			40,707				86,666
	Non cash lease expense			20,248				-
	(Benefit) for deferred income tax			(12,000	)			(239,000	)
	Increase (decrease) in accrued sales allowance			(101,802	)			170,833
	Decrease in accounts receivable, net			152,854				4,132,377
	Decrease in inventories			2,679				113,177
	Increase (decrease) in prepaid expenses			61,094				(4,726	)
	(Increase) decrease in deposits			56,784				(89,189	)
	Increase (decrease) in accounts payable and accrued liabilities			174,147				(2,272,070	)
	Increase (decrease) in deferred rent incentive			(108,844	)			108,844
	(Decrease) in income tax payable			(11,694	)			(613,088	)
	(Increase) in income tax refundable			-				(220,207	)
	(Decrease) in operating lease liabilities			(12,278	)			-
	Net cash provided by (used in) operating activities			(585,580	)			208,069
	CASH FLOWS FROM INVESTING ACTIVITIES:
	Purchase of property and equipment			(34,123	)			(53,866	)
	Net cash used in investing activities			(34,123	)			(53,866	)
	CASH FLOWS FROM FINANCING ACTIVITIES:
	Repurchase of Shares			(71,407	)			-
	Net cash used in financing activities			(71,407	)			-
	Net Increase (Decrease) in Cash			(691,110	)			154,203
	Cash at Beginning of Period			3,822,359				3,668,196
	Cash at End of Period		$	3,131,249			$	3,822,399
	SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
	Cash paid during the period for:
	Interest		$	3,206			$	-
	Income taxes		$	-			$	865,000
	Operating lease right of use at commencement		$	224,550			$	-
	Operating lease liabilities at commencement		$	234,450			$	-
	The accompanying notes are an integral part of these condensed consolidated financial statements.

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
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, 2017	-	$	-	-	$	-	-	$	-		47,046,364			4,704			7,005,553			(186,854	)		6,823,403
Stock options for compensation	-		-	-		-	-		-		-			-			86,666			-			86,666
Net Loss	-		-	-		-	-		-		-			-			-			(1,011,058	)		(1,011,058	)
Balance at December 31, 2018	-		-	-		-	-		-		47,046,364			4,704			7,092,219			(1,197,912	)		5,899,011
Stock options for compensation	-		-	-		-	-		-		-			-			40,707			-			40,707
Repurchase of shares	-		-	-		-	-		-		(466,617	)		(46	)		(71,361	)		-			(71,407	)
Net Loss	-		-	-		-	-		-		-			-			-			(891,669	)		(891,669	)
Balance at December 31, 2019	-	$	-	-	$	-	-	$	-		46,579,747		$	4,658		$	7,061,565		$	(2,089,581	)	$	4,976,642
The accompanying notes are an integral part of these condensed consolidated financial statements.

 

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