Florida | 84-1047159 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) |
(954) |
(Issuer's Telephone Number) |
Large accelerated filer [_] | Accelerated filer [_] |
Non-accelerated filer [_] | Smaller reporting company [x] |
Emerging Growth company [ ] |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
None | N/A | N/A |
PART 1 | FINANCIAL INFORMATION | 3 |
Item 1. | Condensed Consolidated Financial Statements (Unaudited) | 3 |
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operation | |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | |
Item 4. | Controls and Procedures | |
PART II | Other Information | |
Item 1. | Legal Proceedings | |
Item 1A. | Risk Factors | |
Item 2. | Unregistered Sale of Equity Securities and Use of Proceeds | |
Item 3. | Defaults of Senior Securities | |
Item 4. | Mine Safety Disclosures | |
Item 5. | Other Information | |
Item 6. | Exhibits | |
CAPSTONE COMPANIES, INC. AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
�� | ||||||||
March 31, | December 31, | |||||||
2021 | 2020 | |||||||
Assets: | (Unaudited) | |||||||
Current Assets: | ||||||||
Cash | $ | 1,461,968 | $ | 1,223,770 | ||||
Accounts receivable, net | 167,102 | 120,064 | ||||||
Inventories | 8,775 | 8,775 | ||||||
Prepaid expenses | 67,787 | 75,622 | ||||||
Income tax refundable | 285,673 | 861,318 | ||||||
Total Current Assets | 1,991,305 | 2,289,549 | ||||||
Property and equipment, net | 52,388 | 54,852 | ||||||
Operating lease – right of use asset | 143,950 | 158,504 | ||||||
Deposit | 25,560 | 25,560 | ||||||
Goodwill | 1,312,482 | 1,312,482 | ||||||
Total Assets | $ | 3,525,685 | $ | 3,840,947 | ||||
Liabilities and Stockholders’ Equity: | ||||||||
Current Liabilities: | ||||||||
Accounts payable and accrued liabilities | $ | 971,366 | $ | 825,690 | ||||
Operating lease – current portion | 64,967 | 63,307 | ||||||
Total Current Liabilities | 1,036,333 | 888,997 | ||||||
Long-Term Liabilities: | ||||||||
Operating lease – long-term portion | 90,882 | 107,690 | ||||||
Deferred tax liabilities-long-term | 259,699 | 259,699 | ||||||
Total Long-Term Liabilities | 350,581 | 367,389 | ||||||
Total Liabilities | 1,386,914 | 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 March 31, 2021 | 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, `outstanding 46,296,364 shares at March 31, 2021 and 46,296,364 shares at December 31, 2020 | 4,630 | 4,630 | ||||||
Additional paid-in capital | 7,106,522 | 7,053,328 | ||||||
Accumulated deficit | (4,972,383 | ) | (4,473,397 | ) | ||||
Total Stockholders' Equity | 2,138,771 | 2,584,561 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 3,525,685 | $ | 3,840,947 | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements. |
CAPSTONE COMPANIES, INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
September 30, | December 31, | |||||||
2017 | 2016 | |||||||
(Unaudited) | ||||||||
Assets: | ||||||||
Current Assets: | ||||||||
Cash | $ | 3,240,721 | $ | 1,646,128 | ||||
Accounts receivable, net | 4,660,203 | 4,449,179 | ||||||
Inventory | 142,065 | 366,330 | ||||||
Prepaid expenses | 349,410 | 330,020 | ||||||
Total Current Assets | 8,392,399 | 6,791,657 | ||||||
Property and Equipment: | ||||||||
Computer equipment and software | 19,767 | 19,767 | ||||||
Machinery and equipment | 371,323 | 325,750 | ||||||
Furniture and fixtures | 5,665 | 5,665 | ||||||
Less: Accumulated depreciation | (304,176 | ) | (250,465 | ) | ||||
Total Property & Equipment | 92,579 | 100,717 | ||||||
Other Non-current Assets: | ||||||||
Deposit | 13,616 | 12,193 | ||||||
Note receivable | - | 526,887 | ||||||
Goodwill | 1,936,020 | 1,936,020 | ||||||
Total Other Non-current Assets | 1,949,636 | 2,475,100 | ||||||
Total Assets | $ | 10,434,614 | $ | 9,367,474 | ||||
Liabilities and Stockholders' Equity: | ||||||||
Current Liabilities: | ||||||||
Accounts payable and accrued liabilities | $ | 2,122,220 | $ | 2,678,210 | ||||
Income tax payable | 404,088 | 1,588 | ||||||
Notes and loans payable to related parties | 688,384 | 1,321,721 | ||||||
Total Current Liabilities | 3,214,692 | 4,001,519 | ||||||
Long Term Liabilities: | ||||||||
Deferred tax liabilities | 362,000 | 216,000 | ||||||
Total Long Term Liabilities | 362,000 | 216,000 | ||||||
Total Liabilities | 3,576,692 | 4,217,519 | ||||||
Commitments and Contingencies (Note 6) | ||||||||
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 and 48,132,664 shares | 4,704 | 4,813 | ||||||
Additional paid-in capital | 6,976,678 | 7,411,172 | ||||||
Accumulated deficit | (123,460 | ) | (2,266,030 | ) | ||||
Total Stockholders' Equity | 6,857,922 | 5,149,955 | ||||||
Total Liabilities and Stockholders' Equity | $ | 10,434,614 | $ | 9,367,474 | ||||
The accompanying notes are an integral part of these financial statements. |
CAPSTONE COMPANIES, INC. AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
(Unaudited) | ||||||||
For the Three Months Ended | ||||||||
March 31, | ||||||||
2021 | 2020 | |||||||
Revenues, net | $ | 438,423 | $ | 148,977 | ||||
Cost of sales | (309,776 | ) | (114,821 | ) | ||||
Gross Profit | 128,647 | 34,156 | ||||||
Operating Expenses: | ||||||||
Sales and marketing | 4,180 | 211,973 | ||||||
Compensation | 352,079 | 376,675 | ||||||
Professional fees | 127,224 | 130,530 | ||||||
Product development | 26,892 | 51,614 | ||||||
Other general and administrative | 103,122 | 144,366 | ||||||
Goodwill impairment charge | - | 290,059 | ||||||
Total Operating Expenses | 613,497 | 1,205,217 | ||||||
Operating Loss | (484,850 | ) | (1,171,061 | ) | ||||
Other Income (Expense): | ||||||||
Other income | 10,362 | - | ||||||
Other expense | (24,498 | ) | - | |||||
Net Other Income (Expense) | (14,136 | ) | - | |||||
Loss Before Tax Benefit | (498,986 | ) | (1,171,061 | ) | ||||
Benefit for Income Tax | - | (573,685 | ) | |||||
Net Loss | $ | (498,986 | ) | $ | (597,376 | ) | ||
Net Loss per Common Share | ||||||||
Basic and Diluted | $ | (0.01 | ) | $ | (0.01 | ) | ||
Weighted Average Shares Outstanding | ||||||||
Basic and Diluted | 46,296,364 | 46,463,365 | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements. |
CAPSTONE COMPANIES, INC. AND SUBSIDIARIES | ||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
(Unaudited) | ||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Revenues, net | $ | 13,817,909 | $ | 11,692,146 | $ | 30,789,653 | $ | 22,672,551 | ||||||||
Cost of sales | (10,707,657 | ) | (8,841,148 | ) | (23,457,070 | ) | (17,079,271 | ) | ||||||||
Gross Profit | 3,110,252 | 2,850,998 | 7,332,583 | 5,593,280 | ||||||||||||
Operating Expenses: | ||||||||||||||||
Sales and marketing | 928,321 | 488,057 | 1,869,596 | 903,888 | ||||||||||||
Compensation | 351,915 | 325,283 | 1,065,621 | 949,753 | ||||||||||||
Professional fees | 109,257 | 111,339 | 429,440 | 286,681 | ||||||||||||
Product development | 80,991 | 127,367 | 219,464 | 227,552 | ||||||||||||
Other general and administrative | 189,780 | 195,046 | 572,461 | 501,458 | ||||||||||||
Total Operating Expenses | 1,660,264 | 1,247,092 | 4,156,582 | 2,869,332 | ||||||||||||
Net Operating Income | 1,449,988 | 1,603,906 | 3,176,001 | 2,723,948 | ||||||||||||
Other Income (Expense): | ||||||||||||||||
Interest Income | (12,945 | ) | 13,664 | - | 13,664 | |||||||||||
Interest expense | (56,514 | ) | (103,363 | ) | (113,431 | ) | (227,522 | ) | ||||||||
Total Other Income (Expense) | (69,459 | ) | (89,699 | ) | (113,431 | ) | (213,858 | ) | ||||||||
Income Before Tax Provision | 1,380,529 | 1,514,207 | 3,062,570 | 2,510,090 | ||||||||||||
Provision for Income Tax | (390,000 | ) | (24,412 | ) | (920,000 | ) | (37,012 | ) | ||||||||
Net Income | $ | 990,529 | $ | 1,489,795 | $ | 2,142,570 | $ | 2,473,078 | ||||||||
Net Income per Common Share | ||||||||||||||||
Basic | $ | 0.021 | $ | 0.031 | $ | 0.046 | $ | 0.051 | ||||||||
Diluted | $ | 0.021 | $ | 0.031 | $ | 0.045 | $ | 0.051 | ||||||||
Weighted Average Common Shares Outstanding | ||||||||||||||||
Basic | 46,660,456 | 48,132,664 | 46,989,940 | 48,132,664 | ||||||||||||
Diluted | 47,152,574 | 48,371,158 | 47,462,664 | 48,320,017 | ||||||||||||
The accompanying notes are an integral part of these financial statements. |
CAPSTONE COMPANIES, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | ||||||||||||||||||||||||||||||||||||||||||||
FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND MARCH 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
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, 2020 | - | $ | - | - | $ | - | - | $ | - | 46,296,364 | $ | 4,630 | $ | 7,053,328 | $ | (4,473,397 | ) | $ | 2,584,561 | |||||||||||||||||||||||||
Stock options for compensation | - | - | - | - | - | - | - | - | 4,200 | - | 4,200 | |||||||||||||||||||||||||||||||||
Stock issued to Director’s for loan | - | - | 15,000 | 2 | - | - | - | - | 48,994 | - | 48,996 | |||||||||||||||||||||||||||||||||
Net Loss | - | - | - | - | - | - | - | - | - | (498,986 | ) | (498,986 | ) | |||||||||||||||||||||||||||||||
Balance at March 31, 2021 | - | $ | - | 15,000 | $ | 2 | - | $ | - | 46,296,364 | $ | 4,630 | $ | 7,106,522 | $ | (4,972,383 | ) | $ | 2,138,771 | |||||||||||||||||||||||||
Balance at December 31, 2019 | - | $ | - | - | $ | - | - | $ | - | 46,579,747 | $ | 4,658 | $ | 7,061,565 | $ | (2,089,581 | ) | $ | 4,967,642 | |||||||||||||||||||||||||
Stock options for compensation | - | - | - | - | - | - | - | - | 8,925 | 8,925 | ||||||||||||||||||||||||||||||||||
Repurchase of shares | - | - | - | - | - | - | (283,383 | ) | (28 | ) | (36,305 | ) | - | (36,333 | ) | |||||||||||||||||||||||||||||
Net Loss | - | - | - | - | - | - | - | - | - | (597,376 | ) | (597,376 | ) | |||||||||||||||||||||||||||||||
Balance at March 31, 2020 | - | $ | - | - | $ | - | - | $ | - | 46,296,364 | $ | 4,630 | $ | 7,034,185 | $ | (2,686,957 | ) | $ | 4,351,858 | |||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements. |
CAPSTONE COMPANIES, INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Unaudited) | ||||||||
For the Nine Months Ended | ||||||||
September 30, | ||||||||
2017 | 2016 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income | $ | 2,142,570 | $ | 2,473,078 | ||||
Adjustments necessary to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 55,725 | 44,400 | ||||||
Accrued interest on note receivable | 26,887 | (13,654 | ) | |||||
Stock based compensation expense | 66,594 | 46,581 | ||||||
Provision for deferred income tax | 146,000 | - | ||||||
Accrued sales allowance | (831,731 | ) | (94,203 | ) | ||||
(Increase) decrease in accounts receivable | 731,532 | (6,755,174 | ) | |||||
(Increase) decrease in inventory | 224,265 | (275,049 | ) | |||||
(Increase) decrease in prepaid expenses | (20,813 | ) | 43,764 | |||||
Increase (decrease) in accounts payable and accrued liabilities | (263,912 | ) | 958,580 | |||||
(Decrease) in accrued interest on notes payable | (135,337 | ) | (168,492 | ) | ||||
Net cash provided by (used in) operating activities | 2,141,780 | (3,740,169 | ) | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchase of property and equipment | (47,587 | ) | (15,501 | ) | ||||
Net cash (used in) investing activities | (47,587 | ) | (15,501 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from notes payable | 30,559,312 | 19,393,834 | ||||||
Repayments of notes payable | (30,559,312 | ) | (15,049,345 | ) | ||||
Repurchase of shares from Involve, LLC | (250,000 | ) | - | |||||
Warrant issued | 7,500 | - | ||||||
Proceeds from notes and loans payable to related parties | - | 860,000 | ||||||
Repayments of notes and loans payable to related parties | (257,100 | ) | (1,453,946 | ) | ||||
Net cash provided by (used in) financing activities | (499,600 | ) | 3,750,543 | |||||
Net Increase (decrease) in Cash and Cash Equivalents | 1,594,593 | (5,127 | ) | |||||
Cash and Cash Equivalents at Beginning of Period | 1,646,128 | 364,714 | ||||||
Cash and Cash Equivalents at End of Period | $ | 3,240,721 | $ | 359,587 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
Cash paid during the period for: | ||||||||
Interest | 221,881 | $ | 396,014 | |||||
Income taxes | $ | 371,500 | $ | 31,912 | ||||
Non-cash financing and investing activities: | ||||||||
Sale of Investment for Note receivable | $ | - | $ | 500,000 | ||||
Shares issued in satisfaction of loan payable to related party | $ | 240,900 | $ | - | ||||
The accompanying notes are an integral part of these financial statements. |
CAPSTONE COMPANIES, INC. AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Unaudited) | ||||||||
For the Three Months Ended | ||||||||
March 31, | ||||||||
2021 | 2020 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (498,986 | ) | $ | (597,376 | ) | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 2,464 | 6,074 | ||||||
Stock based compensation expense | 4,200 | 8,925 | ||||||
Non-cash stock issued to Director’s for loan | 24,498 | - | ||||||
Non-cash lease expense | 14,554 | 13,583 | ||||||
Goodwill impairment charge | - | 290,059 | ||||||
Provision for deferred income tax | - | 172,287 | ||||||
Increase in accounts receivable, net | (47,038 | ) | (56,515 | ) | ||||
Decrease in inventories | - | 11,392 | ||||||
Decrease in prepaid expenses | 32,333 | 42,199 | ||||||
Decrease in deposits | - | 34,874 | ||||||
Increase in accounts payable and accrued liabilities | 145,676 | 201,752 | ||||||
(Increase) decrease in income tax refundable | 575,645 | (745,972 | ) | |||||
(Decrease) in operating lease liabilities | (15,148 | ) | (7,807 | ) | ||||
Net cash provided by (used in) operating activities | 238,198 | (626,525 | ) | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchase of property and equipment | - | (15,739 | ) | |||||
Net cash used in investing activities | - | (15,739 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Repurchase of shares | - | (36,333 | ) | |||||
Net cash used in financing activities | - | (36,333 | ) | |||||
Net Increase (decrease) in Cash | 238,198 | (678,597 | ) | |||||
Cash at Beginning of Period | 1,223,770 | 3,131,249 | ||||||
Cash at End of Period | $ | 1,461,968 | $ | 2,452,652 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
Cash paid during the period for: | ||||||||
Interest | $ | - | $ | - | ||||
Income taxes | $ | - | $ | - | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
Stocks issued to Directors for prepaid loan fee | $ | 24,498 | $ | - | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements. |
March 31, | December 31, | |||||||
2021 | 2020 | |||||||
Trade Accounts Receivables at period end | $ | 244,204 | $ | 197,166 | ||||
Reserve for estimated marketing allowances, cash discounts and other incentives | (77,102 | ) | (77,102 | ) | ||||
Total Accounts Receivable, net | $ | 167,102 | $ | 120,064 |
March 31, | December 31, | |||||||
2021 | 2020 | |||||||
Balance at beginning of the year | $ | (77,102 | ) | $ | (263,092 | ) | ||
Accrued allowances | - | - | ||||||
Reclassification of allowance from accounts receivable to accounts payable and accrued liabilities | - | 173,426 | ||||||
Expenditures | - | 12,564 | ||||||
Balance at year-end | $ | (77,102 | ) | $ | (77,102 | ) |
March 31, | March 31, | |||||||
2021 | 2020 | |||||||
Balance at the beginning of the period | $ | 1,312,482 | $ | 1,936,020 | ||||
Impairment charges | - | (290,059 | ) | |||||
Balance at March 31, 2021 | $ | 1,312,482 | $ | 1,645,961 |
March 31, | December 31, | |||||||
2021 | 2020 | |||||||
Balance at the beginning of the period | $ | 1,312,482 | $ | 1,936,020 | ||||
Impairment charges | - | (623,538 | ) | |||||
Balance at March 31, 2021 | $ | 1,312,482 | $ | 1,312,482 |
3 months ended September 30, 2017 | 3 months ended September 30, 2016 | |||||||
Basic weighted average shares outstanding | 46,660,456 | 48,132,664 | ||||||
Dilutive warrants | 313,211 | 238,494 | ||||||
Dilutive options | 178,907 | - | ||||||
Diluted weighted average shares outstanding | 47,152,574 | 48,371,158 |
9 months ended September 30, 2017 | 9 months ended September 30, 2016 | |||||||
Basic weighted average shares outstanding | 46,989,940 | 48,132,664 | ||||||
Dilutive warrants | 308,219 | 187,353 | ||||||
Dilutive options | 164,505 | - | ||||||
Diluted weighted average shares outstanding | 47,462,664 | 48,320,017 |
For the Three Months Ended March 31, 2021 | For the Three Months Ended March 31, 2020 | |||||||||||||||
Capstone Brand | % of Revenue | Capstone Brand | % of Revenue | |||||||||||||
Lighting Products- U.S. | $ | 141,900 | 32 | % | $ | 48,303 | 32 | % | ||||||||
Lighting Products-International | 296,523 | 68 | % | 100,674 | 68 | % | ||||||||||
Total Revenue | $ | 438,423 | 100 | % | $ | 148,977 | 100 | % |
March 31, | December 31, | |||||||
2021 | 2020 | |||||||
Balance at the beginning of the period | $ | 56,465 | $ | 247,850 | ||||
Amount accrued | 627 | 46,322 | ||||||
Payments and credits | (2,849 | ) | (237,707 | ) | ||||
Balance at period-end | $ | 54,243 | $ | 56,465 |
March 31, | December 31, | |||||||
2021 | 2020 | |||||||
Accounts payable | $ | 352,740 | 246,158 | |||||
Accrued warranty reserve | 54,243 | 56,465 | ||||||
Accrued compensation and deferred wages, marketing allowances, customer deposits and other liabilities | 564,383 | 523,067 | ||||||
Total accrued liabilities | 618,626 | 579,532 | ||||||
Total | $ | 971,366 | 825,690 |
Revenue % | Gross Accounts Receivable | |||||||||||||||
9 Month Periods Ended September 30, | As of September 30, | As of December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Customer A | 55.5 | % | 62.8 | % | $ | 3,563,515 | $ | 3,760,755 | ||||||||
Customer B | 43.7 | % | 35.8 | % | 1,447,171 | 1,823,785 | ||||||||||
99.2 | % | 98.6 | % | $ | 5,010,686 | $ | 5,558,540 |
Purchases % | Accounts Payable | |||||||||||||||
9 Month Periods Ended September 30, | As of September 30, | As of December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Vendor A | 90.8 | % | 89.5 | % | $ | 1,172,314 | $ | 1,507,671 |
Supplemental balance sheet information related to leases as of March 31, 2021 is as follows: | ||||
Assets | ||||
Operating lease - right-of-use asset | $ | 143,950 | ||
Liabilities | ||||
Current | ||||
Current portion of operating lease | $ | 64,967 | ||
Noncurrent | ||||
Operating lease liability, net of current portion | $ | 90,882 |
Supplemental statement of operations information related to leases for the period ended March 31, 2021 is as follows: | ||||
Operating lease expense as a component of other general and administrative expenses | $ | 17,460 |
Supplemental cash flow information related to leases for the period ended March 31, 2021 is as follows: | ||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flow paid for operating lease | $ | 18,051 | ||
Lease term and Discount Rate | ||||
Weighted average remaining lease term (months) | ||||
Operating lease | 27 | |||
Weighted average Discount Rate | ||||
Operating lease | 7 | % |
Year | Operating Lease | |||
2021 remaining nine months | $ | 55,239 | ||
2022 | 75,492 | |||
2023 | 38,304 | |||
Total Minimum Future Payments | 169,035 | |||
Less: Imputed Interest | 13,184 | |||
Present Value of Lease Liabilities | $ | 155,851 |
(a) | the sum of twelve (12) months base salary at the rate the Executive was earning as of the date of termination and (b) the sum of "merit" based bonuses earned by the Executive during the prior calendar year of his termination. Any payments owed by the Company shall be paid from a normal payroll account on a bi-weekly basis in accordance with the normal payroll policies of the Company. The amount owed by the Company to the Executive, from the effective Termination date, will be payout bi-weekly over the course of the year but at no time will be no more than twenty (26) installments. The Company will also continue to pay the Executive's health and dental insurance benefits for 6 months starting at the Executives date of termination. If the Executive had family health coverage at the time of termination, the additional family premium obligation would remain theirs and will be reduced against the Executive's severance package. The employment agreements have an anti-competition provision for 18 months after the end of employment. |
Salary Severance | Bonus Severance | Gross up Taxes | Benefit Compensation | Grand Total | ||||||||||||||||
Stewart Wallach | $ | 301,521 | $ | - | $ | 12,600 | $ | 6,600 | $ | 320,721 | ||||||||||
Gerry McClinton | $ | 191,442 | $ | - | $ | 11,000 | $ | 6,600 | $ | 209,042 |
3 months ended September 30, 2017 | 3 months ended September 30, 2016 | |||||||
Current: | ||||||||
Federal | $ | 382,000 | $ | - | ||||
Deferred: | ||||||||
Federal | 8,000 | 24,412 | ||||||
Income Tax Provision | $ | 390,000 | $ | 24,412 |
9 months ended September 30, 2017 | 9 months ended September 30, 2016 | |||||||
Current: | ||||||||
Federal | $ | 774,000 | $ | - | ||||
Deferred: | ||||||||
Federal | 146,000 | 37,012 | ||||||
Income Tax Provision | $ | 920,000 | $ | 37,012 |
(1) | "Capstone Lighting Technologies, L.L.C." or "CLTL" is a wholly owned subsidiary of Capstone Companies, Inc. |
(2) | "Capstone International Hong Kong Ltd" or "CIHK" is a wholly owned subsidiary of Capstone Companies, Inc. and a Hong Kong |
(3) | "Capstone Industries, Inc. |
(4) | "Capstone Companies, Inc.," a Florida corporation, may also be referred to as "we," "us" "our," "Company," or |
(5) | "China" |
(6) | " |
(7) | References to "33 Act" or "Securities Act" means the Securities Act of 1933, as amended. |
(8) | References to "34 Act" or "Exchange Act" means the Securities Exchange Act of 1934, as amended. |
(9) | "SEC" or "Commission" means the U.S. Securities and Exchange Commission. |
(10) | "Subsidiaries" means |
Any reference to fiscal year in this Annual Report on Form 10-K means our fiscal year, ending December 31st.2020. |
(12) | "LED" or "LED's" means a light-emitting diode component(s) which can be assembled into light bulbs or can be used in lighting fixtures. |
(13) | "OEM" means "original equipment manufacturer." |
(14) | “Connected Surfaces” or “Connected Products” means smart home devices with embedded sensors that provide communication and data transfer between the Connected Surface and internet-enabled systems of the Company or associated third parties. Connected Surfaces may permit internet access for defined functions. |
Three Months Ended March 31, 2021 Compared to Three Months Ended March 31, 2020 | ||||||||||||||||
(In Thousands) | ||||||||||||||||
March 31, 2021 | March 31, 2020 | |||||||||||||||
Dollars | % of Revenue | Dollars | % of Revenue | |||||||||||||
Revenues, net | $ | 438 | 100.0 | % | $ | 149 | 100.0 | % | ||||||||
Cost of sales | (309 | ) | (70.5 | )% | (115 | ) | (77.2 | )% | ||||||||
Gross Profit | 129 | 29.4 | % | 34 | 22.8 | % | ||||||||||
Operating Expenses: | ||||||||||||||||
Sales and marketing | 4 | 0.9 | % | 212 | 142.3 | % | ||||||||||
Compensation | 352 | 80.4 | % | 377 | 253.0 | % | ||||||||||
Professional fees | 127 | 29.0 | % | 130 | 87.3 | % | ||||||||||
Product development | 27 | 6.2 | % | 52 | 34.9 | % | ||||||||||
Other general and administrative | 103 | 23.6 | % | 144 | 96.6 | % | ||||||||||
Goodwill impairment charge | - | - | % | 290 | 194.6 | % | ||||||||||
Total Operating Expenses | 613 | 140.1 | % | 1,205 | 808.7 | % | ||||||||||
Operating Loss | (485 | ) | (110.7 | )% | (1,171 | ) | (785.9 | )% | ||||||||
Other Income (Expense) | ||||||||||||||||
Other income | 10 | 2.4 | % | - | - | % | ||||||||||
Other expense | (24 | ) | (5.6 | )% | - | - | % | |||||||||
Net Other Expense | (14 | ) | (3.2 | )% | - | - | % | |||||||||
Loss Before Tax Benefit | (499 | ) | (113.9 | )% | (1,171 | ) | (785.9 | )% | ||||||||
Benefit for Income Tax | - | - | % | (574 | ) | 385.3 | % | |||||||||
Net Loss | $ | (499 | ) | (113.9 | )% | $ | (597 | ) | (400.6 | )% |
For the Three Months Ended March 31, 2021 | For the Three Months Ended March 31, 2020 | |||||||||||||||
Capstone Brand | % of Revenue | Capstone Brand | % of Revenue | |||||||||||||
Lighting Products- U.S. | $ | 141,900 | 32 | % | $ | 48,303 | 32 | % | ||||||||
Lighting Products-International | 296,523 | 68 | % | 100,674 | 68 | % | ||||||||||
Total Revenue | $ | 438,423 | 100 | % | $ | 148,977 | 100 | % |
For the Nine Months Ended | ||||||||
(In thousands) | September 30, 2017 | September 30, 2016 | ||||||
Net cash provided by (used in): | ||||||||
Operating Activities | $ | 2,142 | $ | (3,740 | ) | |||
Investing Activities | $ | (48 | ) | $ | (16 | ) | ||
Financing Activities | $ | (500 | ) | $ | 3,751 | |||
Total | $ | 1,594 | $ | (5 | ) |
Summary of Cash Flows | For the Three Months ended March 31, | |||||||
2021 | 2020 | |||||||
(In thousands) | ||||||||
Net cash provided by (used in) : | ||||||||
Operating Activities | $ | 238 | $ | (627 | ) | |||
Investing Activities | - | (16 | ) | |||||
Financing Activities | - | (36 | ) | |||||
Net decrease in cash and cash equivalents | $ | 238 | $ | (679 | ) |
EXHIBIT # | EXHIBIT TITLE |
31.1 | |
/s/ Stewart Wallach | ||
Stewart Wallach | Chief Executive Officer | |
Principal Executive Officer | ||
/s/James G. McClinton | ||
James G. McClinton | Chief Financial Officer and | Chief Operating Officer |
Principal Financial Executive and Accounting Officer |