flptrnkng
3 weeks ago
https://www.sec.gov/ix?doc=/Archives/edgar/data/814926/000190359624000189/capc_10k.htm
As of the date of the filing of this Form 10-K report, the Company does not have a current product that is being actively produced or is in production. The Company’s former product line, LED consumer lighting products, matured in 2022 and is no longer in production. The Company’s efforts to develop Connected Surface consumer products, specifically a Smart Mirror for residential use, as a new product line did not succeed in attracting sufficient revenues to be a sustainable product line. The inability of the Smart Mirrors to become a viable revenue source was due, in part, to delays in production and launch due to COVID 19 pandemic, changes in consumer preferences in the smart mirror market in the U.S., unwillingness of brick-and-mortar retailers that purchased the LED products in bulk to purchase the Smart Mirrors, and established competition in the smart mirror market from companies with greater brand recognition and marketing resources than the Company. The e-commerce initiatives of the Company did not spur significant sales of the Smart Mirror products and all inventory was written off as expensed as of December 31, 2023.
The Connected Chef was ready for formal introduction in quarter four of 2023, and Management is actively marketing the Connected Chef tablet to appliance manufacturers and distributors, but the product has no purchase commitments from retailers as of the date of this Form 10-K report. Further, the Company will have to raise funding to fund production costs, which funding may not be available to the Company.
flptrnkng
2 months ago
Two months later, and nothing has changed.
The Transfer Agent still hasn't been informed about the share structure change, voted on last May, and filed with the SOS at Sunbiz.com in June. Why? I think because it longer serves the purpose of generating new capital, and satisfying old debt.
I believe they intended to satisfy the ~$3 million in debt with preferred shares at a dollar per share (liquidation preference of a dollar a share, plus conversion to common at 66.66 common shares per share). The collapse of the share price under a penny makes the deal less appealing to debt holders. The limited wash trading we saw in January really hasn't changed things. I think we're headed back under a penny without real positive news.
So what now? I see 5 possibilities:
1) Status Quo. Wallach continues to pay the minimal accounts payable as they come due, increasing his debt holding, while external debt holders (Khoury and Fleisig) hold off on demanding payment. I figure this could go on through the end of March, when they file the 2023 10K.
2) Reverse split. Maybe another 10 or 15 to one. That gets the share price up temporarily, making the convertible preferred more attractive (assuming the 66.66 to 1 conversion rate still holds after the Reverse split).
3) Chapter 11 reorganization with a DIP lender (probably Wallach) getting the bulk of the new equity.
4) Chapter 7 liquidation. Not really likely, as no one gets paid (really quite scant tangible assets left to liquidate - debt holders will not get full repayment, and common shares wiped out).
5) Sold to another company? I doubt this. There's nothing really to buy, but a warehouse full of mirrors no one wants, and some plastic molds for the cutting board that will never be built (my opinion, but backed by consumer action).
So, what's it going to be? Maybe we'll know in another 2 months.
flptrnkng
6 months ago
Oh, god, so you're trying that again?
How many Preferred B-1 shares are going to debt repayment? Each one represents 66.66 common shares that can be sold into the market.
3 Million debt to cover == 200 million common shares that eventually will be sold into retail. I don't think Wallach or Postal would be quick to convert, but you can be darn sure Fleisig and Khoury will want to monetize their debt repayment.
So, what are they owed? Fleisig is owed $340K plus 5% interest over two years. Debt comes due in April 2024. He's also owed $200K plus 5% interest over 18 months due November 1, 2023. Khoury is owed $200K plus 5% interest over 18 months due November 1, 2023. It adds up to about $800K. 800,000 Preferred B-1 shares convert into 53.4M common shares. Yeah, over a doubling of the O/S.
Would Fleisig and Khoury actually want Preferred Shares that convert at 66.66 common shares per dollar (1.5 cents per share)? Only if the price remains above 1.5 cents during the conversion and dumping.
Enter the stock promoters. They have another job to do.
Meanwhile, how does any of this raise the millions they need Today to build stupid smart cutting boards for retail sale by 3rd quarter (already 3 weeks past)?
I'll say again, the cutting board tablet idea is dumber than the smart mirror idea, and will sell about as well to consumers. Which is to say, hardly at all.
flptrnkng
6 months ago
The Connected Chef is expected to be ready for formal introduction in quarter three of 2023, but the product has no purchase commitments from retailers as of second fiscal quarter of 2023. Further, the Company will have to raise funding to fund production costs, which funding may not be available to the Company.
https://www.sec.gov/ix?doc=/Archives/edgar/data/814926/000190359623000620/capc_10q.htm
How about this time around, we ignore the stock promoters, and focus on what the company has said and what the company has filed?
We're 3 weeks into the 4th quarter. No new financing has been announced (a material event for a company facing Insolvency). Further, the company owed Wallach $503.5K due Sept. 27, 2023, and $430K to Fleisig and Khoury due Nov. 1, 2023. Instead of having money to build the cutting board, they're deep in debt currently due.
Add to the top of this, the cutting board tablet is a dumber idea than the smart mirror was.
FactsofSEC
10 months ago
FORM 8-K CURRENT REPORT
https://www.sec.gov/ix?doc=/Archives/edgar/data/814926/000190359623000478/capc_8k.htm
Date of Report: June 19, 2023 (Earliest Event Date requiring this Report: June 14, 2023)
Item 4.01 Change in Registrant’s Certifying Accountant. On June 14, 2023, the Audit Committee of the Board of Directors of Capstone Companies, Inc (the “Company”) appointed Assurance Dimensions, Inc. (“Assurance Dimensions”) as Company’s independent registered public accounting firm for the fiscal year ending December 31, 2023, subject to normal and customary client engagement procedures. On the same day, the Audit Committee dismissed D. Brooks and Associates, CPAs, P.A. (“D. Brooks”) as Company’s independent registered public accounting firm. The Company’s Board of Directors ratified the appointment of Assurance Dimensions as Company’s independent registered public accounting firm on June 15, 2023.
The reports of D. Brooks on Company’s consolidated financial statements as of and for the fiscal years ended December 31, 2022 and 2021 did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope, or accounting principles.
During the fiscal years ended in December 31, 2022 and 2021, and the subsequent interim period from January 1, 2023 through June 14, 2023, there were: (i) no disagreements within the meaning of Item 304(a)(1)(iv) of Regulation S-K and related regulations between D. Brooks and the Company on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to D. Brooks’ satisfaction, would have caused D. Brooks to make reference to the subject matter of such disagreements in connection with its reports on our consolidated financial statements for such years; and (ii) no “reportable events” within the meaning of Item 304(a)(1)(v) of Regulation S-K.
The Company provided D. Brooks with a copy of the disclosures that the Company is making in response to Item 4.01 on this Current Report on Form 8-K, and requested that D. Brooks furnish it with a letter addressed to the Securities and Exchange Commission stating whether it agrees with the above statements. A copy of D. Brooks’ letter dated June 15, 2023 regarding the above disclosures is filed as Exhibit 16 to this Current Report on Form 8-K.
During the fiscal years ended December 31, 2022 and 2021, and the subsequent interim period from January 1, 2023 through June 14, 2023, neither Company nor anyone on our behalf consulted with Assurance Dimensions regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered with respect to Company’s consolidated financial statements, in any case where a written report or oral advice was provided to the Company by Assurance Dimensions that Assurance Dimensions concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing, or financial reporting issue; or (ii) any matter that was the subject of a “disagreement” within the meaning of Item 304(a)(1)(iv) of Regulation S-K or a “reportable event” within the meaning of Item 304(a)(1)(v) of Regulation S-K.
Item 9.01. Financial Statements and Exhibits.
Letter from D. Brooks & Associates, CPAs, P.A., dated June 15, 2023
EX-16 2 ex16.htm Exhibit 16
June 15, 2023
Office of the Chief Accountant
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
Re: Capstone Companies, Inc.
Commission File No. 0-28331
Dear Sir/Madam:
We have read the statements included under item 4.01 in the Form 8-K dated June 15, 2023, of Capstone Companies, Inc. to be filed with the Securities and Exchange Commission and we concur with such statements made regarding our firm. We have no basis to agree or disagree with other statements contained therein.
Text
Description automatically generated
D. Brooks and Associates CPA’s, P.A
Palm Beach Gardens, FL
flptrnkng
11 months ago
The Smart Mirror looked cool in January 2019, when it debuted at CES 2019
Three years later, when it finally shipped for sales, no one bought. They got around 100 mirrors into the hands of the public, with roughly half of those given away on the Kelly Clarkson show over 6 months ago. Since then, they've stopped promoting it. They made maybe 5-10 sales in the first quarter? Probably less than that in the quarter ending 6/30.
Smart mirrors have killed the company. Now they're doubling down with smart cutting boards. Only now, they have no money.
But, they have stacks of new shares that can be printed. Wait for the debt for shares deal.
flptrnkng
11 months ago
connected-chef.com
But, they'll need a different domain name, after their USPTO trademark request was denied.
Conclusion
Because the marks are similar and the goods and are related, there is a likelihood of confusion as to the source of applicant's goods, and registration is refused pursuant to Section 2(d) of the Trademark Act.
As applicant's arguments against the Section 2(d) refusal were considered and found not to be persuasive, this refusal to register is hereby continued and made FINAL.
https://tsdr.uspto.gov/documentviewer?caseId=sn97365117&docId=FREF20230527114702#docIndex=0&page=1
They 'launched' this product a year ago on Twitter, saying 'Coming Soon'.
Capstone Update Coming Soon pic.twitter.com/XzfLFMD3LL— Capstone Companies, Inc. (@CAPC_Capstone) June 8, 2022
It's a dumb product. It won't do as well as the flop smart mirrors, my opinion. And now they need a whole new name/brand for it.
The company can appeal the Final Action taken by the USPTO, but that is just going to prolong things.
The company has no money. It is worth less than zero, tangibly. A debt for shares deal is coming, and it's going to dilute the hell out of current stock holders.
Register for streaming realtime charts, analysis tools, and prices.
MikeKnowsRunners
6 months ago
WallStreetMyWay
7 months ago
TB
7 months ago
Hot Features
Premium
