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.

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