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Extension of Stock Repurchase Program. At the 21 December 2016 board of directors' meeting, the Company Board of Directors also approved an extension of the Company's stock repurchase program through 31 December 2017, subject to earlier termination at the discretion of the Company Board of Directors. This program was scheduled to expire on December 31, 2016. The Company has not repurchased any shares of its Common Stock under the stock repurchase program as of the date of this Current Report on Form 8-K.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------------------------------------------
FORM 8-K
------------------------------------------------------------------------
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: December 21, 2016
Earliest Event Date requiring this Report: December 21, 2016
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
CAPSTONE COMPANIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------------------------------------------------------
FLORIDA
0-28331
84-1047159
(State of Incorporation or Organization)
(Commission File Number)
(I.R.S. Employer Identification No.)
350 Jim Moran Blvd.
Suite 120
Deerfield Beach, Florida 33442
(Address of principal executive offices)
(954) 570-8889
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
__ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
__ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
__ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
__ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 8.01 Other Matters
Authorization for Application for Quotation on The OTC Markets Group, Inc. QX Tier. The Board of Directors of Capstone Companies, Inc., a Florida corporation, ("Company") approved a resolution at a 21 December 2016 board meeting authorizing the Company's management to prepare and file an application to quote the Company's Common Stock, $0.0001 par value, ("Common Stock") on The OTC Markets Group, Inc. ("OTC") QX Tier ("QX Tier"). The Company does not anticipate filing this application until early January 2017. The application requires OTC review and approval and that approval may not be granted by OTC. The filing of the application is also subject to the Company meeting all standards for quotation of a class of securities on the QX Tier at the time of the filing of the application and for the duration of the processing of the application.
The decision to seek quotation of the Common Stock on the QX Tier is part of the Company's effort to seek to enhance public shareholder value by improving the liquidity of the public market for the Common Stock. The Company understands that merely obtaining quotation of the Common Stock on the QX Tier will not necessarily increase the liquidity of the public market for the Common Stock and that the Company's ongoing business and financial performance and Company's future investor relations efforts will be a factor in determining whether the quotation of the Common Stock on the QX Tier or any other stock market will in fact enhance public shareholder value.
Extension of Stock Repurchase Program. At the 21 December 2016 board of directors' meeting, the Company Board of Directors also approved an extension of the Company's stock repurchase program through 31 December 2017, subject to earlier termination at the discretion of the Company Board of Directors. This program was scheduled to expire on December 31, 2016. The Company has not repurchased any shares of its Common Stock under the stock repurchase program as of the date of this Current Report on Form 8-K.
FORWARD LOOKING STATEMENT NOTICE: This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements can be identified by the use of words such as "seek," "enhance," "hope," "may," "will," "could," "should," "anticipates," "believes," "estimates," "expects," "intends," "plans" and variations thereof or of similar expressions. All forward-looking statements included in this Current Report on Form 8-K are based on the Company's current expectations and are subject to a number of risks and uncertainties, which could cause actual results to differ materially from those forward-looking statements. These risks include, without limitation, the failure to win approval to quote the Company's Common Stock on the QX Tier, the increased costs and compliance burdens of quoting stock on a new quotation system, the lack of institutional investor and market maker support for the public market for the Company's Common Stock, treatment of the Common Stock as a "penny stock," general and regional economic conditions, changes in consumer demand for the Company products and the impact on such changes in Company's financial performance and investor support for Company's Common Stock in the public markets, changes in laws and regulations and the other risks detailed under Item Item 1A "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2015 and in other Company filings made with the Securities and Exchange Commission. Except as required by applicable laws, the Company will not update any forward-looking statements made in this report to reflect future events or developments.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CAPSTONE COMPANIES, INC., A FLORIDA CORPORATION
Date: December 21, 2016
By: /s/ James McClinton
James McClinton, Chief Financial Officer
3000 shares and we are at $800/Share!!!! LOL
(alternatively, 10000 shares and we are at .0001, less LOL)
NITE 0.44 2500 09:12
CANT 0.21 2500 08:30
CSTI 0.1725 5000 08:30
MAXM 0.0001 10000 07:35
ARXS U 09/19
CDEL U 06:46
ETRF U 07:50
MPID
Ask Price
Size
Date/Time
NITE 0.51 1000 11/18
CSTI 0.65 1000
CANT 0.65 1000
MAXM 800.00 1 07:35
ARXS U 09/19
CDEL U 06:46
ETRF U
I would love to know how many shares were controlled by the members of this board.
I heard Stewart is trying to arrange a leveraged buyout of GE. They sell a lot of light bulbs. They have to resolve the issues with Hoover and its all set.
I believe they also have substantial tax credits going forward.
Won't have to pay much or any taxes on our ? 3M in profits this year.
I believe the idea that capstone is going to buy shares on the open market is just incorrect. The 250 is to buy the options from ac kinetics.
Pretty darn conservative.
Promised nine or greater on August 15- only 2 months ago.
Beat that bigly. (or big league?...Not sure)
That's huuuuge.
Reference:
Capstone Companies, Inc. Reports Record Revenue of $8.9 million
By adminAugust 15, 20160 commentsUncategorized
Achieved record quarterly revenue of $8.9 million
Gross margin expanded 5.5 points to 23.9% of sales
Operating leverage drove operating income growth to $1.2 million
Net income of $1.1 million increased $1.8 million over a net loss in
prior-year period
Raised third quarter 2016 revenue guidance to over $9.0 million
Patents by Inventor Stewart Wallach
Stewart Wallach has filed for patents to protect the following inventions. This listing includes patent applications that are pending as well as patents that have already been granted by the United States Patent and Trademark Office (USPTO).
Apparatus and method for switch state detection and controlling electrical power
Patent number: 9425649
Abstract: A device includes a connection receiving power from a power source under normal conditions and circuitry configured to determine, based on an input from the connection, when the power from the power source is absent; output, when the power source is absent, a test signal at the connection; and generate a detection signal based on current flow generated following the output of the test signal, wherein the detection signal indicates a position of a switch connecting the circuitry to the connection and the generated detection signal indicates the switch is closed when the current flow is above a threshold. The circuitry is configured such that when the power from the power source is absent, the switch is closed, and plural devices are connected on the supply side of the switch, the plurality of devices on the supply side appear as a substantially open circuit to the test signal.
Type: Grant
Filed: January 3, 2014
Date of Patent: August 23, 2016
Assignee: CAPSTONE LIGHTING TECHNOLOGIES, LLC.
Inventors: Neil Singer, John Anthony Granata, Kenneth Alan Pasch, Stewart Wallach
Capstone's Growth Outlook
Stewart Wallach
SESSION DETAILS
TIME
10:30 AM - 11:15 AM
DATE
Friday, October 21, 2016
ROOM
TBA
SESSION DESCRIPTION
Join Stewart Wallach, President and CEO of Capstone Companies, while he provides investors with a detailed description of Capstone Companies' business structure, competitive advantages and growth strategy. Capstone Companies is designer and manufacturer of innovative LED lighting products, including power failure, safety and security lighting solutions. Its products are sold under the Capstone Lighting and HooverHome LED brands to big box retailers, wholesale clubs and home improvement stores to its customers in the U.S. and overseas.
Where do you get .09? You've got the Capstone award for 11.3 but I can't see it that high. What profit and how many shares are you using for the calculation?
"Volume drives strong operating leverage and earnings"
Well....it's record volume.......
Level 2 picking up
CDEL 0.3375 21000 13:32
ETRF 0.335 35000 09:43
CANT 0.21 2500 08:30
CSTI 0.085 10000 13:32
NITE 0.0338 10000 11:38
MAXM 0.0001 10000 07:35
ARXS U 09/19
MPID
Ask Price
Size
Date/Time
CSTI 0.40 17402 13:32
CDEL 0.46 6406 13:32
ETRF 0.48 9900 09:43
NITE 0.48 2500 13:09
CANT 0.65 1000 08:30
MAXM 800.00 1 07:35
ARXS U 09/19
3rd quarter earnings release this week? Best guestimate wins a capstone award...
MPID
Bid Price
Size
Date/Time
NITE 0.41 6884 11:06
CDEL 0.3575 22485 11:22
CSTI 0.26 4000 11:22
CANT 0.21 2500 08:30
MAXM 0.0001 10000 07:35
ARXS U 09/19
ETRF U 09:30
MPID
Ask Price
Size
Date/Time
CDEL 0.46 6000 11:22
NITE 0.50 2500 10/07
CSTI 0.53 1000 11:22
CANT 0.65 1000 08:30
ETRF 0.75 4300 09:30
MAXM 800.00 1 07:35
ARXS U 09/19
News this week or next? How would you set things up leading to the investor conference?
It's interesting. Most were brokers. Only a handful of companies presenting.
Must have been expensive to get a 45 minute presentation spot.
I bet you many shares there will be news the week before the conference.
Stewart is playing this like a chess game.
32466 on the bid. Most in a long time. Things are building.
Real-Time Level 2 Quote Montage
MPID
Bid Price
Size
Date/Time
NITE 0.37 7300 15:12
CDEL 0.34 20600 15:12
ETRF 0.26 4000 09:30
CANT 0.21 2500 08:30
CSTI 0.07 10000 08:30
MAXM 0.0001 10000 07:35
ARXS U 09/19
MPID
Ask Price
Size
Date/Time
CDEL 0.49 9851 15:12
NITE 0.49 4000 15:03
CSTI 0.53 1000 08:30
CANT 0.65 1000 08:30
MAXM 800.00 1 07:35
ARXS U 09/19
ETRF U 09:30
Dunno why the form of the distribution (I am sure it is tax related) but debt is now under an aggregate balance of one million- I see the intent in this as cleaning up the balance sheet before they start to market the company. Close to 30M in sales, maybe 3M in profits (6-7 cents a share), down to 46M shares (when they buy out options from AC Kinetics) and a VERY clean balance sheet. Should be a much easier pitch. Not frequently found on OTCQB.
Don't forget- AC Kinetics owes 1.5M and 300 ownership shares...
Continues to get more interesting and maybe more imminent.
I do not believe they will buy in the open market-for the
foreseeable future.
They need volume as well or else they chase the price
up without anything to sustain the increased price.
They will start with the options from ac kinetics.
They will likely do other private transactions.
I am good with that.
It was a joke, bull. Some idiot bought 20 shares to paint the price.
Relax. Build it and they will come. The risk is in the past, it appears all
Is working just fine. Let Stewart get to 30 M and all will take care of itself.
Three million in profits (10 percent on 30m) divided by 46m shares (options at .15
Likely to be bought first) is .065 cents a share profit.
Relax. It can't stay under a dollar for very long once the market sees what's going on. L
You need to stop sweating every trade and come back in 3 mos. the trading now is all noise.
If they bought the 20 shares at .37 and it closed at .49 we are already accretive to earnings.
Real-Time Level 2 Quote Montage
MPID
Bid Price
Size
Date/Time
CDEL 0.326 2967 12:01
CSTI 0.324 2500 11:33
ETRF 0.303 20000 12:14
CANT 0.21 2500 08:30
NITE 0.0327 10000 11:36
MAXM 0.0001 10000 07:35
MPID
Ask Price
Size
Date/Time
NITE 0.46 4000 12:08
CDEL 0.49 10251 12:01
ETRF 0.55 7300 12:14
CSTI 0.64 1000 11:33
CANT 0.65 1000 08:30
MAXM 800.00 1 07:35
20 shares traded. I think either capstone is starting to buy or the market makers are slowly loading up.
Slowly is the key. They don't want to chase up the price.
LOL
It's ok though. I can wait. (not lol)
I am more optimistic than ever.
Longs will be sitting in the box seats by New Years, Valentine's day at the latest.
You can see Stewart slowly, cautiously,smartly playing out his long game.
Remember, he and Postal still own almost half the company.
Real-Time Level 2 Quote Montage
MPID
Bid Price
Size
Date/Time
CDEL 0.266 7200 09:31
CSTI 0.26 4000 09:30
CANT 0.21 2500 08:30
NITE 0.0301 10000 09/07
MAXM 0.0001 10000 07:35
ETRF U 09:30
MPID
Ask Price
Size
Date/Time
NITE 0.38 2500 09/07
CDEL 0.49 11018 09:31
ETRF 0.60 10200 09:30
CSTI 0.63 1000 09:30
CANT 0.65 1000 08:30
MAXM 800.00 1 07:35
I looked at 8k. Stewart can buy 25M at .01 presplit or .15 post split in 50k
Increments to 250k.
Looks nice now- knocks off another 1.7m shares pretty darn cheap.
Very accretive to EPS from day 1. Stewart's got some tricks up his sleeves.
Do you think this is clearing up the funds for the AC Kinetics transaction or
a separate and additional transaction?
Mike, I dunno why people are so worried.
If we do 30M and net profit 13% they should make 4M.
PE of 30= Market cap of 120M= 2.50 a share.
Relax all, it's down hill from here. Stewart has spent all his time building
a profitable company. KEI has had nothing to sell.
Insiders have 50% and are more vested in this outcome than anyone.
Their salaries are consistent and fair (my memory is Stewart is tops at 270k),
they haven't sold a share, their worst sin is using their 50% share to avoid
meaningless elections. I had no problem with them lending the money to company
at fair and reasonable rates.
It's all good. We should be sitting pretty by the new years.
Build it and they will come.
Stewart, re 2017', "At that rate, there is no question we should be able to double the company again next year "
(Stewart Wallach interview linked to website.)
You were a beast.
Crystal ball for the year?
Stewart said 46.4 million shares average for the quarter.
Prediction for EPS and PE?
News Release
Capstone Companies, Inc. 350 Jim Moran Blvd, Suite 120 Deerfield Beach, FL 33442 FOR IMMEDIATE RELEASE
Capstone Companies, Inc. Reports Record Revenue of $8.9 million
? Achieved record quarterly revenue of $8.9 million
? Gross margin expanded 5.5 points to 23.9% of sales
? Operating leverage drove operating income growth to $1.2 million
? Net income of $1.1 million increased $1.8 million over a net loss in prior-year period
? Raised third quarter 2016 revenue guidance to over $9.0 million
? Uplist to OTCQB Venture Market scheduled for August 22, 2016
DEERFIELD BEACH, FL, August 15, 2016 – Capstone Companies, Inc. (OTC: CAPC) (“Capstone” or the “Company”), a designer of innovative LED lighting solutions including power failure lighting, today reported its financial results for the second quarter 2016.
Stewart Wallach, Capstone’s CEO, commented, “Our strong results for the quarter, with record revenue and solid profitability, reflect the great execution of our growth strategy by the Capstone team. Momentum continues to build with a growing number of consumers purchasing and enjoying our products at record levels. The holiday shopping season is our strongest period in the year, and we are expecting third quarter revenue to meet or exceed what we reported today for the second quarter.
“Importantly, we are gaining more traction with our international presence as well. Sales to international markets have increased dramatically in the second quarter and more than quadrupled in the first half of 2016. We will continue to deepen our relationships with both domestic and international retailers, and take advantage of growing momentum to drive further sales growth.”
-MORE-
Capstone Companies, Inc. Reports Record Revenue of $8.9 million August 15, 2016
Page 2 of 7
Second Quarter Financial Summary
($ in thousands, except per share data)
U.S. revenue
International revenue Total revenue
Gross profit
Gross margin
Operating income (loss)
Operating margin
Net income (loss)
Earnings (loss) per diluted share
Q2 2016
$8,401 501 8,902 2,129 23.9% 1,161 13.0% $ 1,082 $ 0.02
Q2 2015
$279 11 290 53 18.4% (648) (223.4)% (705) ($0.02)
Change
% Change
8,123 2,914% 489 4,342% 8,612 2,696% 2,075 3,897%
1,809 NM 1,787 NM
0.04 NM
Revenue growth in the second quarter of 2016 was primarily the result of strong demand for the Company’s battery powered portable lighting products. Products sold under both the Capstone Lighting and Hoover® Home LED brands experienced significantly improved revenue. International sales also contributed to sales growth, with an incremental $489 thousand of revenue.
Increased gross profit was driven by leverage of fixed costs on improved sales volume. Gross margin as a percent of revenue improved significantly over the prior-year period, despite the occurrence of a $0.7 million marketing allowance in the second quarter 2016, which resulted in a 580 basis point negative impact on gross margin. This marketing allowance was related to our 2016 holiday shopping season marketing campaign.
Selling, general and administrative expenses (SG&A) increased to $1.0 million, from $0.7 million in the prior-year period, due to higher revenue. SG&A as a percent of revenue decreased significantly to 10.9%, from 241.8% in the prior-year period, reflecting strong leverage opportunity as sales volume increases. As a result, income from operations improved significantly, from a second quarter 2015 operating loss.
Diluted earnings per share was $0.02 in the second quarter of 2016. The 2015 period’s loss per diluted share of $0.02 reflects the impact of the Company’s 1-for-15 reverse stock split which became effective on July 25, 2015, reducing the weighted average number of shares outstanding in that quarter to 46,439,403, from the pre-reverse-split count of 696,591,051.
-MORE-
Capstone Companies, Inc. Reports Record Revenue of $8.9 million August 15, 2016
Page 3 of 7
2016 First Half Financial Summary
($ in thousands, except per share data)
U.S. revenue
International revenue Total revenue
Gross profit
Gross margin
Operating income (loss)
Operating margin
Net income (loss)
Earnings (loss) per diluted share
1H 2016
1H 2015
$621 382 1,004 361 35.9% (1,002) (99.8)% (1,096) ($0.02)
Change
8,809 1,168 9,977 2,382
2,122
2,079 0.04
% Change
1,418% 306% 994% 660%
NM
NM NM
$
$9,403 1,551 10,980 2,742 25.0% 1,120 10.2% $ 983 0.02
Financial results for the first half of 2016 improved significantly over the prior-year period, reflecting the successful introduction of new products and the Hoover Home LED® brand. Increased gross margin as a percent of revenue, operating margin as a percent of revenue and net margin as a percent of revenue reflect the scalability of Capstone’s business model and associated operating leverage.
Mr. Wallach added, “We believe that given the great progress we are making and the strong momentum we have going forward, this was an ideal time to bolster our investor relations strategy. The reverse split that became effective on July 25th and the up-listing to the OTCQB Venture Market planned for August 22nd are important steps toward ensuring that investors are willing to consider Capstone as an investment opportunity. We believe that our story will resonate with a growing number of investors as they discover the great value proposition we offer our customers and the strong financial performance we are able to deliver. This is an exciting time for Capstone, and we are focused on executing both our operational strategy and investor relations strategy for the benefit of all of our shareholders.”
Webcast and Teleconference to Review Results and Outlook
The Company will host a live webcast and conference call on Tuesday, August 16, 2016 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. Eastern Time the day of the teleconference until Tuesday, August 23, 2016. To listen to the replay of the call, dial (858) 384-5517 and enter replay pin number 13640937. 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, logistics, and distribution of consumer and institutional products, including the Hoover® HOME LED lighting product line, to accounts throughout North America and in international markets. See www.capstonecompaniesinc.com for more information about the Company and www.capstoneindustries.com for information on our current product offerings.
-MORE-
Capstone Companies, Inc. Reports Record Revenue of $8.9 million August 15, 2016
Page 4 of 7
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.
For more information, contact
Company:
Aimee Gaudet Corporate Secretary (954) 252-3440, ext. 313
Investor Relations:
Garett Gough, Kei Advisors LLC (716) 846-1352 ggough@keiadvisors.com
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.
Does anybody know when ac kinetics closes? What the share count is after the transaction? Did the company buy out its options at .01/.15? Is the company getting its interest on the 1.5M note? What are our 100 membership units worth? Lots of questions...
I bought a thousand shares at .35 to cheer everybody up.
The ask jumped to .40 on my 357 dollar trade.
The market cap soared. I move markets!
At these volumes the price ALMOST doesn't matter.
There is no volume to sell anyway, even at acceptable prices.
The game starts after the next conference call two weeks from yesterday. A profit estimate for the year would be a good start.
Only then shall we see the future more clearly, fellow padwans.
Worth listening to....
August 22- to otcqb - "to broaden exposure to stock"; "we never even focused on shareholder value
until we had the business model.."
-tracking 20M in revenue through 3 quarters
-close to 25 million for the year
-should be able to double that for next year (yes, he said that)
-going into more expensive products, will contribute to revenue without stressing the organization
- in 3 of the national big box stores, don't go to second tier accounts, only the largest volume national accounts
The fact that he is out interviewing is what is important. They are finally out there.
"To our long term shareholders... it is an exciting company, this is a business and formula we are comfortable with..and are really looking forward to 2017."
Involve is gone.
And I believe Howard Ullman sold all his shares to Stewart and is also gone.
Involve is gone.
ITEM 1.01 Entry into a Definitive Material Agreements
Option. Involve, LLC, a Delaware limited liability company, ("Seller") owns shares of Common Stock, $0.0001 par value per share, ("Shares") of Capstone Companies, Inc. (the "Company"). The Company and Seller have entered into an Option Agreement, dated June 27, 2016, (the "Option Agreement") whereby Seller has granted options to the Company to repurchase 25 million shares at a purchase price of $0.01 per share in five (5) increments of 5,000,000 shares (each, an "Option" and collectively the "Options") for $50,000 per Option (the "Exercise Price"), or for a total purchase price of $250,000 in the aggregate if all Options are exercised. The Options terminate on the earlier of the twelve (12) month anniversary of the first date that the Company exercises any Option or June 27, 2019, the thirty-six (36) month anniversary of the effective date of the Option Agreement.
Under a Joinder Agreement to the Option Agreement, the Company will receive 100 Membership Interests in the Seller as consideration under the Option Agreement.
The Option Agreement provides for an absolute release by the Company and its affiliates of any claims or causes of action that the Company may have against the Seller and his affiliates, excepting claims or causes of action under the Option Agreement.
The Option Agreement is part of the transactions contemplated by the Purchase Agreement reported below.
Securities Purchase Agreement. Each of the Company, Neil Singer, an individual and a principal of the Seller ("Singer"), and AC Kinetics, Inc., a private Delaware corporation and an affiliate of Singer ("ACK"), are concurrently with the Option Agreement entering into that certain Securities Purchase Agreement, dated June 27, 2016 (the "Purchase Agreement"), whereby Singer will purchase all of the outstanding securities of ACK owned by the Company in exchange for (1) the making by Singer to the order of the Company a promissory note in the initial principal amount of $1,500,000 (the "Note"), which Note provides for: (1) following the closing of the transactions contemplated by the Purchase Agreement, Singer will assign the Note to NLO Holdco, LLC, a Delaware limited liability company and an affiliate of Singer ("NLO"), and (2) before the occurrence of a certain funding transaction between Koch Minerals, LLC, and ACK NLO, LLC, a Delaware limited liability company and an affiliate of Singer, ACK and NLO ("Newco"), NLO shall assign to and Newco shall assume, all of NLO's rights and obligations under the Note. Singer shall have no liability under the Note upon its assignment.
The Purchase Agreement provides for the Company to release Singer, ACK and their respective affiliates from any and all claims and causes of action occurring as of or prior to the closing date of the Purchase Agreement, including but not limited to any claims or causes of action related to intellectual property held by Singer or ACK, a January 15, 2013 Royalty Agreement between ACK and the Company, and a January 13, 2013 Letter Agreement by the Company and ACK, which release does not apply to claims or causes of action under the Purchase Agreement.
Note. Pursuant to the Purchase Agreement, Singer shall issue the Note to the Company, which Note is executed by Singer to acquire the securities of ACK owned by the Company and which Note provides for: (1) principal amount of $1,5000,000; (2) annual interest of 3.5% per annum; and (3) subject to any restrictions contained in a certain Subordination Agreement to be executed in connection with the Note and discussed below, the outstanding principal amount and all accrued and unpaid interest thereon shall be due upon the earlier of (i) a Change in Control of Newco or (ii) June 27, 2025. "Change in Control" means, directly or indirectly, (i) the acquisition by any person or group of persons (other than an affiliate of Newco, including, for the avoidance of doubt, NLO and/or ACK) who does not currently own at least 50% of the voting equity, in the aggregate, of Newco, (ii) any merger, reorganization, or similar transaction between Newco and any person (other than an affiliate of Newco, including, for the avoidance of doubt, NLO and/or ACK), (iii) a divestiture (whether by sale or exclusive license), not in the ordinary course of business, of all or substantially all of the assets of Newco (other than to an affiliate of Newco, including, for the avoidance of doubt, NLO and/or ACK).
Subordination Agreement. The Company signed a Subordination Agreement with Koch Minerals, LLC ("KM") on June 27, 2016, (the "Subordination Agreement") in connection with the Note, whereby the Company subordinated the Note to all debt obligations of Newco and any guarantors (including ACK and NLO) owed to KM or its affiliates. The Subordination Agreement was required under and part of the transactions contemplated by the Purchase Agreement and related agreements involving ACK.
Schwab now with accurate share count and price.
CAPCD- From Schwab
Dear ,
Thank you for your message.
We haven't received the new shares for Capstone Companies just yet, nor have we been provided with a delivery date. Sometimes clients can trade the shares before they are even delivered, which may explain the very light volume on the stock today.
I wish I could provide a definite timeline for you, but unfortunately we simply haven't been given one.
Hope you have a great rest of your week, and we look forward to the delivery of this new symbol.