Capstone Companies Reports 2021 Year-End Performance

DEERFIELD BEACH, Fla.--()--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 financial results for the full year 2021.

Gerry McClinton, Capstone’s Chief Financial Officer, commented, “The Product Development team fought through 2 years of pandemic related delays in order to finalize the Smart Mirror portfolio. With inventory now available, Management has refocused on Strategic Development and Financial Management for future growth.”

Stewart Wallach, Capstone’s Chairman and Chief Executive Officer, commented, “Our company experienced firsthand what it is like to be tested at every level in every way during 2021.”

Mr. Wallach added, “Management's business acumen guided us through a maze of business obstacles that could never have been anticipated.”

Webcast and Teleconference to Review Results and Outlook

Friday, April 1, 2022
10:30 a.m. Eastern Time
Phone: (201) 689-8562

A telephonic replay will be available from 1:30 p.m. ET the day of the call until Friday, April 8, 2022. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13728169. 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
 
December 31, December 31,

2021

2020

Assets:
Current Assets:
Cash

$

1,277,492

 

$

1,223,770

 

Accounts receivable, net

 

1,481

 

 

120,064

 

Inventories

 

508,920

 

 

8,775

 

Prepaid expenses

 

500,748

 

 

75,622

 

Income tax refund

 

284,873

 

 

861,318

 

Total Current Assets

 

2,573,514

 

 

2,289,549

 

 
Property and equipment, net

 

76,928

 

 

54,852

 

Operating lease- right of use asset

 

98,651

 

 

158,504

 

Deposit

 

11,148

 

 

25,560

 

Goodwill

 

1,312,482

 

 

1,312,482

 

Total Assets

$

4,072,723

 

$

3,840,947

 

 
Liabilities and Stockholders’ Equity:
Current Liabilities:
Accounts payable and accrued liabilities

$

538,551

 

$

825,690

 

Operating lease- current portion

 

70,157

 

 

63,307

 

Total Current Liabilities

 

608,708

 

 

888,997

 

 
Long-Term Liabilities:
Operating lease- long-term portion

 

37,533

 

 

107,690

 

Note payable related party

 

1,030,340

 

 

-

 

Deferred tax liabilities -long-term

 

273,954

 

 

259,699

 

Total Long-Term Liabilities

 

1,341,827

 

 

367,389

 

Total Liabilities

 

1,950,535

 

 

1,256,386

 

 
Commitments and Contingencies: ( Note 5 )
 
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 15,000 shares at December 31, 2021, nil at December 31, 2020 (Liquidation Preference $15,000)

 

2

 

 

-

 

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 48,893,031 at December 31, 2021 and 46,296,364 at December 31, 2020

 

4,892

 

 

4,630

 

Additional paid-in capital

 

8,554,320

 

 

7,053,328

 

Accumulated deficit

 

(6,437,026

)

 

(4,473,397

)

Total Stockholders' Equity

 

2,122,188

 

 

2,584,561

 

Total Liabilities and Stockholders’ Equity

$

4,072,723

 

$

3,840,947

 

 
 
The accompanying notes are an integral part of these consolidated financial statements.
 

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 
For the Years Ended
December 31,

2021

2020

 
Revenues, net

$

685,854

 

$

2,770,358

 

Cost of sales

 

(638,644

)

 

(2,266,592

)

Gross Profit

 

47,210

 

 

503,766

 

 
Operating Expenses:
Sales and marketing

 

28,568

 

 

300,420

 

Compensation

 

1,276,503

 

 

1,515,522

 

Professional fees

 

368,229

 

 

422,820

 

Product development

 

308,823

 

 

249,879

 

Other general and administrative

 

420,962

 

 

477,121

 

Goodwill impairment charge

 

-

 

 

623,538

 

Total Operating Expenses

 

2,403,085

 

 

3,589,300

 

 
Operating Loss

 

(2,355,875

)

 

(3,085,534

)

 
Other Income (Expense):
Other Income, net

 

456,275

 

 

89,600

 

Interest Income (Expense)

 

(48,974

)

 

179

 

Total Other Income (Expense)

 

407,301

 

 

89,779

 

 
Loss Before Tax Benefit

 

(1,948,574

)

 

(2,995,755

)

 
(Benefit) for Income Tax

 

15,055

 

 

(611,939

)

 
Net Loss

$

(1,963,629

)

$

(2,383,816

)

 
Net Loss per Common Share
Basic and Diluted

$

(0.04

)

$

(0.05

)

 
Weighted Average Shares Outstanding
Basic and Diluted

 

50,600,298

 

 

46,337,198

 

 
The accompanying notes are an integral part of these consolidated financial statements
   
CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 2021 AND 2020
 
 
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, 2019

-

$

-

-

$

-

-

$

-

46,579,747

 

$

4,658

 

$

7,061,565

 

$

(2,089,581

)

$

4,976,642

 

Stock options for compensation

-

 

-

-

 

-

-

 

-

-

 

 

-

 

 

28,068

 

 

-

 

 

28,068

 

Repurchase of shares

-

 

-

-

 

-

-

 

-

(283,383

)

 

(28

)

 

(36,305

)

 

-

 

 

(36,333

)

Net Loss

-

 

-

-

 

-

-

 

-

-

 

 

-

 

 

-

 

 

(2,383,816

)

 

(2,383,816

)

Balance at December 31, 2020

-

$

-

-

$

-

-

$

-

46,296,364

 

$

4,630

 

$

7,053,328

 

$

(4,473,397

)

$

2,584,561

 

 
 
Balance at December 31, 2020

-

$

-

-

$

-

-

$

-

46,296,364

 

$

4,630

 

$

7,053,328

 

$

(4,473,397

)

$

2,584,561

 

Stock options for compensation

-

 

-

-

 

-

-

 

-

-

 

 

-

 

 

15,619

 

 

-

 

 

15,619

 

Stock issued to Directors for loan

15,000

 

2

 

48,994

 

 

48,996

 

Common stock for cash, net of fees  

-

 

-

2,596,667

 

 

262

 

 

1,436,379

 

 

1,436,641

 

Net Loss

-

 

-

-

 

-

-

 

-

-

 

 

-

 

 

-

 

 

(1,963,629

)

 

(1,963,629

)

Balance at December 31, 2021

-

$

-

15,000

$

2

-

$

-

48,893,031

 

$

4,892

 

$

8,554,320

 

$

(6,437,026

)

$

2,122,188

 

 
 
The accompanying notes are an integral part of these consolidated financial statements
 
CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
For the Twelve Months Ended
December 31,

2021

2020

CASH FLOWS FROM OPERATING ACTIVITIES:
 
Net Loss

$

(1,963,629

)

$

(2,383,816

)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization

 

9,852

 

 

24,297

 

Stock based compensation expense

 

15,619

 

 

28,068

 

Noncash lease expense

 

59,853

 

 

55,698

 

Goodwill impairment charge

 

-

 

 

623,538

 

Stock issued to Director's for loan

 

48,996

 

 

-

 

Increase in deferred income tax liabilities-long term

 

14,255

 

 

259,699

 

Noncash accounts receivable allowance

 

-

 

 

173,426

 

(Increase) decrease in accounts receivable, net

 

118,583

 

 

(106,605

)

(Increase) decrease in inventories

 

(500,145

)

 

16,043

 

(Increase) decrease in prepaid expenses

 

(425,126

)

 

107,160

 

Decrease in deposits

 

14,412

 

 

20,461

 

(Decrease) increase in accounts payable and accrued liabilities

 

(287,139

)

 

16,671

 

(Increase) decrease in income tax refund

 

576,445

 

 

(641,111

)

Decrease in operating lease liabilities

 

(63,307

)

 

(51,175

)

Net cash used in operating activities

 

(2,381,331

)

 

(1,857,646

)

 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment

 

(31,928

)

 

(13,500

)

Net cash used in investing activities

 

(31,928

)

 

(13,500

)

 
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock, net of costs

 

1,436,641

 

 

-

 

Note payable- related party

 

1,030,340

 

 

-

 

Repurchase of shares

 

-

 

 

(36,333

)

Net cash provided (used) in financing activities

 

2,466,981

 

 

(36,333

)

 
Net Increase (Decrease) in Cash

 

53,722

 

 

(1,907,479

)

Cash at Beginning of Year

 

1,223,770

 

 

3,131,249

 

Cash at End of Period

$

1,277,492

 

$

1,223,770

 

 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Stocks issued to directors for loan fee

$

48,996

 

$

-

 

Interest accrued note payable related party

$

10,340

 

$

-

 

 
 
The accompanying notes are an integral part of these consolidated financial statements.

 

Contacts

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

Contacts

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