Market Overview

Capstone Companies Reports Second Quarter 2018

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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, today reported
its financial results for the second quarter 2018.

Stewart Wallach, Capstone's CEO, commented, "Our revenues declined
through Q2 as sell through of the company's LED products did not meet
retailer's projections. Carryover inventories have balanced at Q2 and
company is resuming distribution of its new products in Q3. We are glad
to have to have this challenge behind us and the management can now turn
its attention to executing the Company's new product strategy."

Gerry McClinton, Capstone's CFO, added, "In spite of the decline in
revenues, the Company's cash position of approximately $2.8 million,
with zero loan balances, resulting in zero interest paid in the half
year, combined with our recent bank line being significantly expanded,
will provide more than adequate funding to ensure that new product line
initiatives will not be compromised."

Webcast and Teleconference to Review Results and Outlook

The Company will host a live webcast and conference call on Wednesday,
August 15, 2018 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 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 teleconference until Wednesday, August 22, 2018. To listen to
the replay of the call, dial (412) 317-6671 and enter replay pin number
13681490. Alternatively, the archive of the webcast will be available on
the Company's website at www.capstonecompaniesinc.com.
A transcript will also be posted to the website, 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. See www.capstonecompaniesinc.com
for more information about the Company and www.capstoneindustries.com
for information on our current product offerings.

The Hoover trademark and logo are registered trademarks of Techtronic
Floor Care Technology Limited and are used under license by Capstone
Industries, Inc. All rights reserved.

© 2017 DURACELL Bethel, CT 06801. DURACELL is a registered trademark of
Duracell U.S. Operations, Inc., used under license. All rights reserved.

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
CONSOLIDATED BALANCE SHEETS
 
    June 30,   December 31,
2018 2017
Assets: (Unaudited)
Current Assets:
Cash $ 2,760,994 $ 3,668,196
Accounts receivable, net 2,023,474 4,367,721
Other receivables 78,250 -
Inventories 8,316 140,634
Prepaid expenses 787,165 239,150
Income tax refundable 346,912 -
Total Current Assets 6,005,111 8,415,701
 
Property and Equipment:
Computer equipment and software 52,649 9,895
Machinery and equipment 395,600 318,801
Furniture and fixtures 11,834 5,665
Less: Accumulated depreciation (285,262) (266,997)
Total Property & Equipment 174,821 67,364
 
Other Non-current Assets:
Deposit 14,312 13,616
Goodwill 1,936,020 1,936,020
Total Other Non-current Assets 1,950,332 1,949,636
Total Assets $ 8,130,264 $ 10,432,701
 
Liabilities and Stockholders' Equity:
Current Liabilities:
Accounts payable and accrued liabilities $ 1,510,687 $ 2,733,516
Income tax payable 11,694 624,782
Total Current Liabilities 1,522,381 3,358,298
 
Long Term Liabilities:
Deferred tax liabilities 269,000 251,000
Total Long Term Liabilities 269,000 251,000
Total Liabilities 1,791,381 3,609,298
 
Commitments and Contingencies (Note 4)
 
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 47,046,364 shares 4,704 4,704
Additional paid-in capital 7,063,302 7,005,553
Accumulated deficit (729,123) (186,854)
Total Stockholders' Equity 6,338,883 6,823,403
Total Liabilities and Stockholders' Equity $ 8,130,264 $ 10,432,701
 
CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
    For the Three Months Ended   For the Six Months Ended
June 30, June 30,
2018   2017 2018   2017
 
Revenues, net $ 2,103,206 $ 10,219,548 $ 6,163,374 $ 16,971,744
Cost of sales 1,742,486 7,576,685 4,783,384 12,749,413
Gross Profit 360,720 2,642,863 1,379,990 4,222,331
 
Operating Expenses:
Sales and marketing 115,547 564,519 478,608 941,275
Compensation 369,749 353,904 744,858 713,706
Professional fees 142,900 115,381 291,786 320,183
Product development 123,766 66,447 290,332 138,473
Other general and administrative 166,676 204,063 340,965 382,681
Total Operating Expenses 918,638 1,304,314 2,146,549 2,496,318
 
Operating Income (Loss) (557,918) 1,338,549 (766,559) 1,726,013
 
Other Income (Expense):
Miscellaneous income 147,290 - 147,290 -
Interest income - - - 12,945
Interest expense - (35,186) - (56,917)
Total Other (Expense) 147,290 (35,186) 147,290 (43,972)
 
Income (Loss) Before Tax Provision (Benefit) (410,628) 1,303,363 (619,269) 1,682,041
 
Provision (Benefit) for Income Tax (59,000) 402,000 (77,000) 530,000
 
Net Income (Loss) $ (351,628) $ 901,363 $ (542,269) $ 1,152,041
 
Net Income (Loss) per Common Share
Basic ($0.007) $0.019 ($0.012) $0.024
Diluted ($0.007) $0.019 ($0.012) $0.024
 
Weighted Average Shares Outstanding
Basic 47,046,364 46,694,058 47,046,364 47,155,592
Diluted 47,046,364 47,055,446 47,046,364 47,473,829
 
CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
    For the Six Months Ended
June 30,
2018   2017
CASH FLOWS FROM OPERATING ACTIVITIES:
 
Net income (loss) $ (542,269) $ 1,152,041

Adjustments necessary to reconcile net income (loss) to net cash
provided by (used

in) operating activities:

Depreciation and amortization 18,266 35,551
Accrued interest on note receivable - (12,945)
Stock based compensation expense 57,750 40,950
Provision for deferred income tax 18,000 138,000
Increase (decrease) in accrued sales allowance 41,645 (20,848)
(Increase) decrease in accounts receivable, net 2,302,602 (450,713)
(Increase) other receivables (78,250) -
Decrease in inventories 132,318 99,064
(Increase) in prepaid expenses (548,017) (1,032,565)
(Increase) in deposits (696) -
Increase (decrease) in accounts payable and accrued liabilities (1,222,828) 111,954
(Decrease) in income tax payable (613,088) -
(Increase) in income tax refundable (346,912) -
(Decrease) in accrued interest on notes payable - (44,837)
Net cash provided by (used in) operating activities (781,479) 15,652
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (125,723) (14,784)
Net cash (used in) investing activities (125,723) (14,784)
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable 11,347,367 16,566,081
Repayments of notes payable (11,347,367) (16,566,081)
Repurchase of shares from Involve, LLC - (250,000)
Repayments of notes and loans payable to related parties - (223,000)
Net cash (used in) financing activities - (473,000)
 
Net (Decrease) in Cash and Cash Equivalents (907,202) (472,132)
Cash and Cash Equivalents at Beginning of Period 3,668,196 1,646,128
Cash and Cash Equivalents at End of Period $ 2,760,994 $ 1,173,996
 
 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ - $ 101,755
Income taxes $ 865,000 $ 371,500
 

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