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 third quarter 2019.
Stewart Wallach, Capstone’s Chairman and CEO, commented, “our year-to-date numbers are indicative of management’s commitment to containing costs and sustaining revenues while addressing supply chain challenges resulting from China trade disputes.”
Mr. Wallach added, “concurrently the Company has developed and recently released its Smart Mirror program that will drive growth in 2020.”
Gerry McClinton, Capstone’s CFO, commented further, “We would note, these achievements have been financed through operating cash flow and did not result in the incurrence of any debt or interest.”
Webcast and Teleconference to Review Results and Outlook
The Company will host a live webcast and conference call on Monday, November 18, 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 dialling (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 Monday, November 25, 2019. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13696116. 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 and www.capstoneconnectedhome.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 | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
September 30, | December 31, | ||||
2019 | 2018 | ||||
Assets: | (Unaudited) | ||||
Current Assets: | |||||
Cash | $ | 2,306,431 | $ | 3,822,359 | |
Accounts receivable, net | 2,152,341 | 64,511 | |||
Inventories | - | 27,497 | |||
Prepaid and other | 136,517 | 243,876 | |||
Income tax refundable | 220,207 | 220,207 | |||
Total Current Assets | 4,815,496 | 4,378,450 | |||
Property and Equipment: | |||||
Computer equipment and software | 53,819 | 51,195 | |||
Machinery and equipment | 202,067 | 170,567 | |||
Furniture and fixtures | 6,828 | 6,828 | |||
Less: Accumulated depreciation | (185,943) | (152,870) | |||
Total Property & Equipment | 76,771 | 75,720 | |||
Other Non-current Assets: | |||||
Deposit | 26,893 | 102,805 | |||
Goodwill | 1,936,020 | 1,936,020 | |||
Total Other Non-current Assets | 1,962,913 | 2,038,825 | |||
Total Assets | $ | 6,855,180 | $ | 6,492,995 | |
Liabilities and Stockholders’ Equity: | |||||
Current Liabilities: | |||||
Accounts payable and accrued liabilities | $ | 915,450 | $ | 461,446 | |
Deferred rent incentive | 33,529 | 108,844 | |||
Income tax payable | 11,694 | 11,694 | |||
Total Current Liabilities | 960,673 | 581,984 | |||
Long Term Liabilities: | |||||
Deferred tax liabilities | - | 12,000 | |||
Total Long Term Liabilities | - | 12,000 | |||
Total Liabilities | 960,673 | 593,984 | |||
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 46,752,419 shares at September 30, 2019 and 47,046,364 shares at December 31, 2018 | 4,677 | 4,704 | |||
Additional paid-in capital | 7,076,513 | 7,092,219 | |||
Accumulated deficit | (1,186,683) | (1,197,912) | |||
Total Stockholders' Equity | 5,894,507 | 5,899,011 | |||
Total Liabilities and Stockholders’ Equity | $ | 6,855,180 | $ | 6,492,995 | |
The accompanying notes are an integral part of these condensed consolidated financial statements. |
CAPSTONE COMPANIES, INC. AND SUBSIDIARIES | |||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||
(Unaudited) | |||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||
Revenues, net | $ | 5,354,190 | $ | 5,726,145 | $ | 11,740,814 | $ | 11,889,520 | |||||||||
Cost of sales | (4,139,214) | (4,395,761) | (9,165,140) | (9,179,145) | |||||||||||||
Gross Profit | 1,214,976 | 1,330,384 | 2,575,674 | 2,710,375 | |||||||||||||
Operating Expenses: | |||||||||||||||||
Sales and marketing | 102,193 | 359,715 | 329,463 | 838,323 | |||||||||||||
Compensation | 381,795 | 359,539 | 1,138,960 | 1,104,396 | |||||||||||||
Professional fees | 112,687 | 102,532 | 353,293 | 394,320 | |||||||||||||
Product development | 81,060 | 95,661 | 260,823 | 385,994 | |||||||||||||
Other general and administrative | 169,572 | 232,888 | 490,835 | 573,852 | |||||||||||||
Total Operating Expenses | 847,307 | 1,150,335 | 2,573,374 | 3,296,885 | |||||||||||||
Operating Income (Loss) | 367,669 | 180,049 | 2,300 | (586,510) | |||||||||||||
Other Income (Expenses): | |||||||||||||||||
Other Income (Expense), Net | 2,610 | (1,960) | 135 | 145,330 | |||||||||||||
Interest Expense | (3,206) | - | (3,206) | - | |||||||||||||
Total Other Income (Expenses) | (596) | (1,960) | (3,071) | 145,330 | |||||||||||||
Income (Loss) Before Tax Benefit | 367,073 | 178,089 | (771) | (441,180) | |||||||||||||
Provision (Benefit) for Income Tax | - | 6,000 | (12,000) | (71,000) | |||||||||||||
Net Income (Loss) | $ | 367,073 | $ | 172,089 | $ | 11,229 | $ | (370,180) | |||||||||
Net Income (Loss) per Common Share | |||||||||||||||||
Basic | $ | 0.01 | $ | 0.00 | $ | 0.00 | ($ | 0.01) | |||||||||
Diluted | $ | 0.01 | $ | 0.00 | $ | 0.00 | ($ | 0.01) | |||||||||
Weighted Average Shares Outstanding | |||||||||||||||||
Basic | 46,882,538 | 47,046,364 | 46,874,256 | 47,046,364 | |||||||||||||
Diluted | 46,882,538 | 47,046,364 | 46,874,256 | 47,046,364 | |||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements. |
CAPSTONE COMPANIES, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | ||||||||||||||||||||||||||||||||||||
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, 2018 | - | $ | - | - | $ | - | - | $ | - | 47,046,364 | $ | 4,704 | $ | 7,092,219 | $ | (1,197,912 | ) | $ | 5,899,011 | |||||||||||||||||
Stock options for compensation | - | - | - | - | - | - | - | - | 11,025 | - | 11,025 | |||||||||||||||||||||||||
Repurchase of shares | - | - | - | - | - | - | (45,470 | ) | (3 | ) | (8,612 | ) | - | (8,615 | ) | |||||||||||||||||||||
Net (Loss) | - | - | - | - | - | - | - | - | - | (345,340 | ) | (345,340 | ) | |||||||||||||||||||||||
Balance at March 31, 2019 | - | - | - | - | - | - | 47,000,894 | 4,701 | 7,094,632 | (1,543,252 | ) | 5,556,081 | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||
Stock options for compensation | - | - | - | - | - | - | - | - | 11,025 | - | 11,025 | |||||||||||||||||||||||||
Repurchase of shares | - | - | - | - | - | - | (168,530 | ) | (17 | ) | (27,246 | ) | - | (27,263 | ) | |||||||||||||||||||||
Net (Loss) | - | - | - | - | - | - | - | - | - | (10,504 | ) | (10,504 | ) | |||||||||||||||||||||||
Balance at June 30, 2019 | - | - | - | - | - | - | 46,832,364 | $ | 4,684 | $ | 7,078,411 | $ | (1,553,756 | ) | $ | 5,529,339 | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||
Stock options for compensation | - | - | - | - | - | - | - | - | 9,732 | - | 9,732 | |||||||||||||||||||||||||
Repurchase of shares | - | - | - | - | - | - | (79,945 | ) | (7 | ) | (11,630 | ) | - | (11,637 | ) | |||||||||||||||||||||
Net Income | - | - | - | - | - | - | - | - | - | 367,073 | 367,073 | |||||||||||||||||||||||||
Balance at September 30, 2019 | - | $ | - | - | $ | - | - | $ | - | 46,752,419 | $ | 4,677 | $ | 7,076,513 | $ | (1,186,683 | ) | $ | 5,894,507 | |||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||
Balance at December 31, 2017 | - | $ | - | - | $ | - | - | $ | - | 47,046,364 | $ | 4,704 | $ | 7,005,553 | $ | (186,854 | ) | $ | 6,823,403 | |||||||||||||||||
Stock options for compensation | - | - | - | - | - | - | - | - | 28,875 | - | 28,875 | |||||||||||||||||||||||||
Net (Loss) | - | - | - | - | - | - | - | - | - | (190,641 | ) | (190,641 | ) | |||||||||||||||||||||||
Balance at March 31, 2018 | - | - | - | - | - | - | 47,046,364 | 4,704 | 7,034,428 | (377,495 | ) | 6,661,637 | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||
Stock options for compensation | - | - | - | - | - | - | - | - | 28,874 | - | 28,874 | |||||||||||||||||||||||||
Net (Loss) | - | - | - | - | - | - | - | - | - | (351,628 | ) | (351,628 | ) | |||||||||||||||||||||||
Balance at June 30, 2018 | - | - | - | - | - | - | 47,046,364 | $ | 4,704 | $ | 7,063,302 | $ | (729,123 | ) | $ | 6,338,883 | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||
Stock options for compensation | - | - | - | - | - | - | - | - | 17,892 | - | 17,892 | |||||||||||||||||||||||||
Net Income | - | - | - | - | - | - | - | - | - | 172,089 | 172,089 | |||||||||||||||||||||||||
Balance at September 30, 2018 | - | $ | - | - | $ | - | - | $ | - | 47,046,364 | $ | 4,704 | $ | 7,081,194 | $ | (557,034 | ) | $ | 6,528,864 | |||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements. |
CAPSTONE COMPANIES, INC. AND SUBSIDIARIES | ||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
(Unaudited) | ||||||
For the Nine Months Ended | ||||||
September 30, | ||||||
2019 | 2018 | |||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
Net Income (Loss) | $ | 11,229 | $ | (370,180) | ||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||
Depreciation and amortization | 33,072 | 32,457 | ||||
Stock based compensation expense | 31,782 | 75,641 | ||||
Provision (benefit) for deferred income tax | (12,000) | 32,000 | ||||
Increase (decrease) in accrued sales allowance | (106,448) | 153,025 | ||||
(Increase) decrease in accounts receivable, net | (1,981,382) | 1,827,100 | ||||
Decrease in inventories | 27,497 | 132,318 | ||||
Decrease in prepaid and other | 107,359 | 74,805 | ||||
(Increase) decrease in deposits | 75,912 | (1,139) | ||||
Increase (decrease) in accounts payable and accrued liabilities | 454,004 | (932,262) | ||||
Decrease in deferred rent incentive | (75,315) | - | ||||
Decrease in income tax payable | - | (613,088) | ||||
Increase in income tax refundable | - | (354,912) | ||||
Net cash provided by (used in) operating activities | (1,434,290) | 55,765 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Purchase of property and equipment | (34,123) | (130,665) | ||||
Net cash used in investing activities | (34,123) | (130,665) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Repurchase of Shares | (47,515) | - | ||||
Net cash used in financing activities | (47,515) | - | ||||
Net Decrease in Cash | (1,515,928) | (74,900) | ||||
Cash at Beginning of Period | 3,822,359 | 3,668,196 | ||||
Cash at End of Period | $ | 2,306,431 | $ | 3,593,296 | ||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||
Cash paid during the period for: | ||||||
Interest | $ | 3,206 | $ | - | ||
Income taxes | $ | - | $ | 865,000 | ||
The accompanying notes are an integral part of these condensed consolidated financial statements. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20191114005795/en/
Contacts:
Corporate Secretary
(954) 252-3440, ext. 313