Market Overview

Capstone Companies Reports Third 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 third quarter 2018.

Stewart Wallach, Capstone's CEO, commented, "While revenues disappoint,
the Company planned for the decline and effectively controlled operating
expenses to minimize the impact. This in conjunction with the Company's
strong balance sheet and zero debt position did not impact its efforts
to develop its new product portfolio which appeals to today's smart
homes and digital lifestyles. The Company is planning its formal launch
at the Consumer Electronic Show (CES) in January 2019."

Gerry McClinton, Capstone's CFO, added, "Despite reduced revenues, the
Company achieved a Net Income of approximately $172 thousand in the
quarter, had zero interest, zero debt, a cash balance of nearly $3.6
million, which positions the Company well to launch the new product line
initiative."

Webcast and Teleconference to Review Results and Outlook

The Company will host a live webcast and conference call on Thursday,
November 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 Thursday, November 22, 2018. To listen
to the replay of the call, dial (412) 317-6671 and enter replay pin
number 13684744. 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.

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
 
September 30, December 31,
2018 2017
Assets: (Unaudited)
Current Assets:
Cash $ 3,593,296 $ 3,668,196
Accounts receivable, net 2,387,590 4,367,721
Inventories 8,316 140,634
Prepaid expenses 164,345 239,150
Income tax refundable   354,912     -  
Total Current Assets   6,508,459     8,415,701  
 
Property and Equipment:
Computer equipment and software 56,932 9,895
Machinery and equipment 395,601 318,801
Furniture and fixtures 12,493 5,665
Less: Accumulated depreciation   (299,454 )   (266,997 )
Total Property & Equipment   165,572     67,364  
 
Other Non-current Assets:
Deposit 14,755 13,616
Goodwill   1,936,020     1,936,020  
Total Other Non-current Assets   1,950,775     1,949,636  
Total Assets $ 8,624,806   $ 10,432,701  
 
Liabilities and Stockholders' Equity:
Current Liabilities:
Accounts payable and accrued liabilities $ 1,801,248 $ 2,733,516
Income tax payable   11,694     624,782  
Total Current Liabilities   1,812,942     3,358,298  
 
Long Term Liabilities:
Deferred tax liabilities   283,000     251,000  
Total Long Term Liabilities   283,000     251,000  
Total Liabilities   2,095,942     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 7,081,194 7,005,553
Accumulated deficit   (557,034 )   (186,854 )
Total Stockholders' Equity   6,528,864     6,823,403  
Total Liabilities and Stockholders' Equity $ 8,624,806   $ 10,432,701  
 
 
CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
       
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2018 2017 2018 2017
 
Revenues, net $ 5,726,145 $ 13,817,909 $ 11,889,520 $ 30,789,653
Cost of sales   (4,395,761 )   (10,707,657 )   (9,179,145 )   (23,457,070 )
Gross Profit   1,330,384     3,110,252     2,710,375     7,332,583  
 
Operating Expenses:
Sales and marketing 359,715 928,321 838,323 1,869,596
Compensation 359,539 351,915 1,104,396 1,065,621
Professional fees 102,532 109,257 394,320 429,440
Product development 95,661 80,991 385,994 219,464
Other general and administrative   232,888     189,780     573,852     572,461  
Total Operating Expenses   1,150,335     1,660,264     3,296,885     4,156,582  
 
Operating Income (Loss)   180,049     1,449,988     (586,510 )   3,176,001  
 
Other Income (Expense):
Miscellaneous income (expense) (1,960 ) - 145,330 -
Interest expense   -     (69,459 )   -     (113,431 )
Total Other Income (Expense)   (1,960 )   (69,459 )   145,330     (113,431 )
 
Income (Loss) Before Tax Provision (Benefit) 178,089 1,380,529 (441,180 ) 3,062,570
 
Provision (Benefit) for Income Tax   6,000     390,000     (71,000 )   920,000  
 
Net Income (Loss) $ 172,089   $ 990,529   $ (370,180 ) $ 2,142,570  
 
Net Income (Loss) per Common Share
Basic $ 0.004   $ 0.021     ($0.008 ) $ 0.046  
Diluted $ 0.004   $ 0.021     ($0.008 ) $ 0.045  
 
Weighted Average Shares Outstanding
Basic   47,046,364     46,660,456     47,046,364     46,989,940  
Diluted   47,046,364     47,152,574     47,046,364     47,462,664  
 
   
CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
For the Nine Months Ended
September 30,
2018 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
 
Net income (loss) $ (370,180 ) $ 2,142,570
Adjustments necessary to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 32,457 55,725
Accrued interest on note receivable - 26,887
Stock based compensation expense 75,641 66,594
Provision for deferred income tax 32,000 146,000
Increase (decrease) in accrued sales allowance 153,025 (831,731 )
Decrease in accounts receivable, net 1,827,100 731,532
Decrease in inventories 132,318 224,265
(Increase) decrease in prepaid expenses 74,805 (20,813 )
(Increase) in deposits (1,139 ) -
(Decrease) in accounts payable and accrued liabilities (932,262 ) (263,912 )
(Decrease) in income tax payable (613,088 ) -
(Increase) in income tax refundable (354,912 ) -
(Decrease) in accrued interest on notes payable   -     (135,337 )
Net cash provided by operating activities   55,765     2,141,780  
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment   (130,665 )   (47,587 )
Net cash (used in) investing activities   (130,665 )   (47,587 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable 18,352,018 30,559,312
Repayments of notes payable (18,352,018 ) (30,559,312 )
Repurchase of shares from Involve, LLC - (250,000 )
Warrant issued - 7,500
Repayments of notes and loans payable to related parties   -     (257,100 )
Net cash (used in) financing activities   -     (499,600 )
 
Net Increase (decrease) in Cash and Cash Equivalents (74,900 ) 1,594,593
Cash and Cash Equivalents at Beginning of Period   3,668,196     1,646,128  
Cash and Cash Equivalents at End of Period $ 3,593,296   $ 3,240,721  
 
 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ -   $ 221,881  
Income taxes $ 865,000   $ 371,500  
 
 
Non-cash financing and investing activities:
 
Shares issued in satisfaction of loan payable to related party $ -   $ 240,900  
 

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