Market Overview

Capstone Companies Reports 2018 Year-End Performance

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  • Revenue decline resulting from reduced promotional activity
  • Looking forward - 2019 CES product line introductions focused on
    emerging Smart Home market

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 2018.

Stewart Wallach, Capstone's Chairman and CEO, commented, "2018
promotional scheduling, as a result of business uncertainties caused by
trade negotiations, was significantly reduced and accordingly resulting
revenues were disappointing. On a looking forward positive note, the
Company has taken aggressive measures to mitigate the future impact of
tariff increases and has also ramped up product development efforts to
revitalize the Company's growth by accelerating the 2019 launch of its
newly developed smart home product portfolio."

Mr. Wallach added, "our initial smart home product was introduced at CES
in January. This was our first entry in the electronics industry
showcase and we have subsequently been covered in numerous industry
publications, interviews and were recognized by Android Headlines as one
of their 'Best of CES' choices."

Gerry McClinton, Capstone's CFO, commented further, "while 2018 revenues
were down, our Company resources remain stable and we are rapidly
preceding to improve the revenue stream through diversifying our product
portfolio into high growth areas. Management remained resolute through
2018 to efficiently manage its resources yielding strong year-end cash
balances and zero debt standing."

Webcast and Teleconference to Review Results and Outlook

The Company will host a live webcast and conference call on Tuesday,
April 2, 2019 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, followed by a
question-and-answer session. 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. ET the day of the
call until Tuesday, April 9, 2019. To listen to the archived call, dial
(412) 317-6671 and enter conference ID number 13686341. 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,
Limited, in the development, manufacturing and marketing of consumer
product to retail channels throughout North America and international
markets.

Visit www.capstonecompaniesinc.com
for more information about the Company and www.capstoneindustries.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.

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,
2018   2017
 
Revenues, net $ 12,830,324 $ 36,752,813
Cost of sales (9,936,745) (27,910,869)
Gross Profit 2,893,579 8,841,944
 
Operating Expenses:
Sales and marketing 915,205 2,266,601
Compensation 1,502,590 1,612,480
Professional fees 510,022 549,844
Product development 518,969 376,981
Other general and administrative 691,466 805,077
Total Operating Expenses 4,138,252 5,610,983
 
Operating Income (Loss) (1,244,673) 3,230,961
 
Other Expenses:
Miscellaneous expense, net (55,360) -
Interest expense - (122,091)
Total Other Expenses (55,360) (122,091)
 
Income (Loss) Before Tax Provision (Benefit) (1,300,033) 3,108,870
 
Provision (Benefit) for Income Tax (288,975) 1,029,694
 
Net Income (Loss) $ (1,011,058) $ 2,079,176
 
Net Income (Loss) per Common Share
Basic ($0.021) $0.044
Diluted ($0.021) $0.044
 
Weighted Average Shares Outstanding
Basic 47,046,364 47,007,296
Diluted 47,046,364 47,188,450
 
 

 

 

  CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
   
December 31, December 31,
  2018     2017  
Assets:
Current Assets:
Cash $ 3,822,359 $ 3,668,196
Accounts receivable, net 64,511 4,367,721
Inventories 27,497 140,634
Prepaid expenses 243,876 239,150
Income tax refundable   220,207     -  
Total Current Assets   4,378,450     8,415,701  
 
Property and Equipment:
Computer equipment and software 51,195 9,895
Machinery and equipment 170,567 318,801
Furniture and fixtures 6,828 5,665
Less: Accumulated depreciation   (152,870 )   (266,997 )
Total Property & Equipment   75,720     67,364  
 
Other Non-current Assets:
Deposit 102,805 13,616
Goodwill   1,936,020     1,936,020  
Total Other Non-current Assets   2,038,825     1,949,636  
Total Assets $ 6,492,995   $ 10,432,701  
 
Liabilities and Stockholders' Equity:
Current Liabilities:
Accounts payable and accrued liabilities $ 461,446 $ 2,733,516
Deferred rent incentive 108,844 -
Income tax payable   11,694     624,782  
Total Current Liabilities   581,984     3,358,298  
 
Long Term Liabilities:
Deferred tax liabilities   12,000     251,000  
Total Long Term Liabilities   12,000     251,000  
Total Liabilities   593,984     3,609,298  
 
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 47,046,364
shares 4,704 4,704
Additional paid-in capital 7,092,219 7,005,553
Accumulated deficit   (1,197,912 )   (186,854 )
Total Stockholders' Equity   5,899,011     6,823,403  
Total Liabilities and Stockholders' Equity $ 6,492,995   $ 10,432,701  
 

 

 

  CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
   
For the Years Ended
December 31,
  2018     2017  
CASH FLOWS FROM OPERATING ACTIVITIES:
 
Net income (loss) $ (1,011,058 ) $ 2,079,176

Adjustments to reconcile net income (loss) to net cash provided by
operating

activities:

Depreciation and amortization 45,510 80,940
Accrued interest on note receivable - 26,887
Stock based compensation expense 86,666 95,469
Provision (Benefit) for deferred income tax (239,000 ) 35,000
Increase (decrease) in accrued sales allowance 170,833 (1,006,731 )
Decrease in accounts receivable, net 4,132,377 1,090,898
Decrease in inventories 113,137 225,696
Increase (decrease) in prepaid expenses (4,726 ) 90,869
(Increase) in deposits (89,189 ) (1,423 )
(Decrease) increase in accounts payable and accrued liabilities (2,272,070 ) 55,306
Increase in deferred rent incentive 108,844 -
(Decrease) increase in income tax payable (613,088 ) 623,194
(Increase) in income tax refundable (220,207 ) -
(Decrease) increase in accrued interest on notes payable   -     56,554  
Net cash provided by operating activities   208,029     3,451,835  
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment   (53,866 )   (47,587 )
Net cash (used in) investing activities   (53,866 )   (47,587 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable - 30,559,312
Repayments of notes payable - (30,559,312 )
Repurchase of shares from Involve, LLC - (250,000 )
Warrants issued - 7,500
Repayments of notes and loans payable to related parties   -     (1,139,680 )
Net cash (used in) financing activities   -     (1,382,180 )
 
Net Increase in Cash 154,163 2,022,068
Cash at Beginning of Period   3,668,196     1,646,128  
Cash at End of Period $ 3,822,359   $ 3,668,196  
 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ -   $ 418,925  
Income taxes $ 865,000   $ 371,500  
 
Non-cash financing and investing activities:
 
Shares issued in satisfaction of loan payable to related party $ -   $ 240,900  
 
Note Receivable used to repurchase shares from Involve L.L.C. $ -   $ 500,000  
 
 
 

 

 

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