says, "Companies that trade on the OTCBB will require Cash/Cheque. "
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What does any of this have to do with whether the Company is Insolvent or not?
If Fleisig notified the Company of an Event of Default, and the Company can't cure that default, his whole loan plus interest is due 7 weeks early. If the Company can't pay back the loan and interest, they are Insolvent.
I wonder what Mouhaned Khoury thinks about the chances of getting his loan repaid when it comes due in November. That's another $200K plus Interest.
20 days into the Indiegogo campaign and no sales. Where's the money to cover debts as they come due?
Mirrors gone from Amazon (remember what a Big Deal that was?).
Office vacated.
No CFO since 11/30/22.
Still no Annual Report on sunbiz.org (even though Stewart updated his private LLC on Jan. 30th).
Have the directors ever bought any shares on the open market? Or, did they only get shares as debt settlement, or in lieu of Director compensation? Thanks in advance !!
Did you know Stewart bought a whole bunch of shares from the previous CEO for 0.0025 per share (0.0375 per share post reverse split)?
I think it possible that the whole Indiegogo thing was precipitated
by Everett Fleisig notifying the Company of an Event of Default, specifically,
Have you read the filings?
From the last 10Q:
Where did they commit to that? That's not what it says in their SEC filings.
For Free? They're selling them for less than their costs.
Yes, they'll lose money on every 'sale'. They're trying to turn a current asset into quick cash by selling under cost.
They've sold Zero in about 10 days that the campaign has been active.
Should they manage to move all 900 mirrors they have in inventory, they'll raise about $330K after Indiegogo's fees (no, selling stuff on Indiegogo is not Free).
They owe $1.1 million due in April, and another $645K due in November.
This is a company liquidating as they go out of business. It's not a good thing. If the company survives, it'll be because they diluted more shares. It's the only thing they have left to sell, after the mirrors.
Wallach and Postal made no loans under that deal
And got 15,000 Preferred shares (999,900 shares when converted to common) for their trouble.
Three months later, they sold 2.5 million shares for 60 cents per share when the stock price was above 2 dollars.
So, to recap, Wallach and Postal dished out Zero dollars of their own money, got a million shares as thanks, and then diluted 2.5 million shares.
It WAS easy for them to sell shares. Not so much anymore. They'll need to reverse split to make room if they plan on selling more shares to stave off Insolvency.
Directors don't own half the shares. That is a lie.
Indiegogo is supposed to be for start-ups, with a prototype idea, to finance the development and initial build costs. The campaign has been live for 8 days. Zero backer interest so far.
The Capstone smart mirror has been in development for 6 years. It was launched 4 years ago at CES 2019. It has failed in the marketplace. They've given away as many as they've sold.
Even if the Indiegogo campaign sells all 900 mirrors they have in inventory, they can't pay the $1.1 million they owe in April. Let's ignore the $645,000 they owe in November.
Insolvency looms. There is nothing to love here.
Indiegogo Update!
Yesterday, they were in Prototype Stage. Now they're in Production Stage!
They've even added some photos of production, testing, and shipping. Wow! How fast!
https://www.indiegogo.com/projects/capstone-connected-smart-mirror--2#/updates/all
You might recognize one of the testing photos:
We are so close...#TheSmartMirrorCompany #CapstoneConnected pic.twitter.com/0fniBC5kJK
— Capstone Companies, Inc. (@CAPC_Capstone) July 20, 2021
Lenders don't cancel debt for no consideration. You're seeing the result of that debt cancellation: Stock Promotion and share dumping. They go hand in hand.
This happens over and over again with this company.
Why March 2023 as the earliest shipping date?
And why George Wolf as the creator of the Indiegogo project? Why not Stewart, or Capstone itself?
Has George purchased the bulk of the Standard mirror inventory, or is he merely representing Capstone?
Wardrobe mirror seems to be gone from Amazon, and the Standard mirror is only available there as Sold By/Ships from Beachcamera.com.
What is this Indiegogo nonsense?
https://www.indiegogo.com/projects/capstone-connected-smart-mirror--2#/
Stewart's CAPC
is a bit like Schroedinger's Cat. Until you open the box, the Cat is both alive and dead.
Until CAPC files something, it's both Alive and Dead. The next SEC filing they have to make is at the end of March (the 10K). Keep an eye on sunbiz.org for Florida corporate updates in the meantime:
https://search.sunbiz.org/Inquiry/CorporationSearch/SearchResults/OfficerRegisteredAgentName/wallach%20stewart/Page1
Stewart submitted the Annual Report for his private corp, Group Nexus LLC, on Jan. 30th. The Annual Reports for Capstone Lighting Technologies LLC, Capstone Companies Inc. and Capstone Industries Inc. have not been filed yet (as of Feb 1-2). They need to update the address and remove McClinton at a minimum.
If they're going to dilute their way out of this mess and impending insolvency, they'll have to file an Amendment to increase the Authorized shares. Unfortunately, sunbiz.org is about 3 months behind on processing corporate amendments, see here:
https://dos.myflorida.com/sunbiz/document-processing-dates/
So, any SOS filing to amend and increase the A/S is going to lag real time.
Meowwww!
They've removed the address and phone number for contacting Capstone
https://capstoneconnected.com/contact/
Short position for CAPC on 1/13/2023 is -0-
Yes, Zero shorts as of the latest report.
Estimating the size of the Inventory write-down.
From two data points given by the company, that they had $1.4 million in retail priced stock in the warehouse, and that the mix between standard mirror to wardrobe mirror was 75%/25%.
0.75x$899 + 0.25x$1099 = $949 per mirror retail blended value.
1,400,000 / 949 ~= 1475 mirrors.
Now, the first question you should be asking CAPC, is, Where did the rest of the 3200 mirrors go? Well, they did say 175 out of 200 mirrors that were air shipped were lost/broken in transit. Did the sea container loads also experience broken/lost mirrors? Only CAPC knows for sure.
But, back to the write-down calculation. The assumed 1475 mirrors in the warehouse had an inventory value of $1,035,196 as of March 31, 2022. I believe they booked 5 mirror sales in December 2021, leaving 1470 estimated mirrors total.
$1,035,196 / 1470 ~= $704 per mirror inventory carrying value.
Through 9/30/2022, they had sold roughly 50 mirrors, give or take. In December 2022, they gave away roughly 50 mirrors on Kelly Clarkson's show. So, figure 1370 mirrors left.
At $499/$699 current advertised pricing, blended inventory retail value:
0.75x$499 + 0.25x$699 = $549
$549 x 1370 mirrors = $752,130
Inventory on the books as of 9/30/2022: $995,852
Implying a write-down of about $243,000 is indicated.
Can they reasonably get $499/$699 for their mirror inventory, though? I get the feeling sales are still anemic, even at the lower pricing.
That would mean the accountant generating the 10K will have to go deeper than $243K on the inventory write-downs.
How much deeper? Let's say they decide to sell the whole inventory to a liquidator, to raise cash. What would a liquidator want to pay?
I could see these being sold on ebay for $400/$500 - that wouldn't be much different than today's $499/$699. But a liquidator would probably want a 100% margin, so he might want to pay $200/$250. That implies an inventory liquidation value of:
0.75x$200 + 0.25x$250 = $212.50 ; $212.50x1370 = $291,125
Or an inventory write-down of a bit over $700,000.
They'll have to negotiate with the note holders due about $1.1 million in April, though. They have a security interest in the Inventory. Of course, 2 of the note holders are insiders, so they're negotiating with themselves.
Before you buy a share of CAPC
you should probably find out if they're still operating as a going concern.
They're out of money. They didn't bother to replace the CFO when it was clear he was a 'short-timer'. Their headquarters are being offered for lease, with immediate occupancy.
Total sales of their smart mirror amount to less than $100K in a whole year. Cash burn from operations averages over $500K per quarter.
They are not credit worthy. They have debt coming due in 2023 that they can't pay (over a million in April, and over $600K in November).
As of 1/1/23, they probably have around $1.3M in current assets, and over $2.0M in current liabilities. Their main current asset, the smart mirror inventory, needs to be written down.
Thinking about it some more, it seems to me Capstone has not renewed its Lease
It was last renewed in Nov. 2019, and was due for renewal (Lease end 6/30/2023).
The rental listing of 11/14/2022 also coincides with CAPC's 3rd quarter 10Q.
No CFO, execs deferring pay, Hong Kong office shut down, no CES 2023, giving up HQ office space. Let's speak plainly: CAPC is in a dire cash situation.
How they resolve this will be interesting.
Capstone HQ listed for Lease
https://www.loopnet.com/Listing/431-Fairway-Dr-Deerfield-Beach-FL/27111712/
Listing ID: 27111712
Date Created: 11/14/2022
Last Updated: 1/3/2023
Address: 431 Fairway Dr, Deerfield Beach, FL
Any updates on the Christian Levine law group?
The SEC is also concerned about manipulators in the stock market. Looks like they brought legal action just yesterday against a group of stock promoters that used Twitter and other social media platforms in their manipulation schemes.
https://www.sec.gov/litigation/complaints/2022/comp-pr2022-221.pdf
As you say, Let's see what happens ...
The mirror's shortcomings on TV
Like I said, it doesn't photograph well. That's due to the inherent light loss through the mirror. Colors muted, dark hues crushed. Side by side comparison of the album cover art.
What does photograph exceptionally well though is fingerprints. Very evident in the screen capture. Circled in Red.
Looks like they gave away like 40 or so mirrors on the show.
Wonder how much cash they had to kick in for that spot as well? Even with the latest $50K lent by Postal, they don't have cash to be throwing around.
The mirror didn't make a good showing; it doesn't photograph well, especially under bright lights. They even had it inside a cabinet, which should have given it some shade. Still, the display was almost invisible to the camera.
I don't think they had any information on where to buy the mirror; I guess they're hoping people will remember the name and google it later.
Whole thing gives me flashbacks to Secret Diary and Oprah Winfrey ... remember how big a deal was made of that?
You probably lost it on 11/20/2022 after not having posted to the board for 3 months.
I seem to recall that's the general rule.
I'm willing to accept the McClinton resignation at face value
All the execs at CAPC are old, directors too. There is a time for retirement. The CFO has reached that time.
But, this isn't coming out of the blue. The company put him on daily pay back in February. There is no surprise he was a 'short-timer'. Originally, he was 'done' on Aug 30.
What is a surprise is there's no immediate replacement. They had ample time to plan for this. They did not.
Enforces my belief that the CAPC story is about over. What the new story will be is anyone's guess.
$9,455 in Smart mirror sales in 3Q.
That's about 10 mirrors. For those keeping score, that's about 50 mirrors sold for 2022, more or less. If you believed the penny stock promoters, we should be approaching a million mirrors sold by now.
For 3Q, CAPC spent $13K warehousing, shipping and handling that <$10K mirror revenue.
The whole company is effectively dormant, except for social media posts.
McClinton was brought back on a short term (paid by the day) employment contract to file this 10Q. His new term ends on 11/30/2022.
The election of directors has not happened yet, and the record date to vote was moved.
Whole company seems to be on pause. I think Wallach is tired, and embarrassed about his total eff-up of the company. I think the company is either reorganizing or getting sold. In either case, the outlook is not good for common shareholders.
Net tangible assets are less than zero (-$647K). What are you buying, if you buy the company, besides an overvalued inventory of smart mirrors that have been repudiated by the market? Why would you overpay for that?
The cutting board idea is stupid. I rank it below the smart mirror, and I was very negative on that one. I doubt we ever see it for sale. Anyone got the FCC grant ID for the tablet? No? You're not manufacturing or shipping it without one.
In short: Don't fall for the latest stock promotion that's clearly running behind the scenes.
Price lowered again: $499/$699
https://capstoneconnected.com/#our_products
Black Friday pricing
At this level, I estimate they'll need to write down their inventory by roughly a quarter million dollars. Should be interesting Monday after the close when they report.
Year end price 3 cents.
A year from now? We'll have to see what new business they target after the mirror/chopping board flops.
Right now, you should be pricing this company for bankruptcy, until they say how they'll raise additional capital to stay in business through the end of this year into next.
1,000,215 shares traded in Sep/Oct.
776,666 of them were PIPE shares that were de-legended.
10Q for 3Q2022 due in less than 2 weeks. We should hear at that time how CAPC raised additional funds to keep the lights on.
And then, tax loss selling season. It's been dull here for months, but it's about to get interesting!
* Get a jump on the holiday season, these slashed prices won't last long! *
Cash won't last long either. I figure they're about out of cash, unless they've done another insider loan.
What happens when insiders are tapped out? The one thing left to sell to raise cash is their share structure.
sunbiz.org is 3 months behind on corporate amendments. Something could have happened in July/August/September that we've yet to hear about.
This data point might also give you pause, Net Tangible Assets:
CAPC bet the company on mirrors and lost.
Another price drop
$599/$799
https://capstoneconnected.com/#our_products
B/A 0.0787 / 0.1387 Man, with a spread that wide
there's no way the Manipulators can resist painting the close at 0.1387 with a token amount of shares.
That will take the stock from DOWN 18% to UP 26% in a blink.
The stock had been down as much as 30% today.
Mmmm, painting the close, that's Good Stock Manipulation!
Yes, I saw that. $600K on top of the $1.02M the company borrowed in Oct. 2021 from insiders.
CAPC is a cash burning machine. To bring the mirror to market, they raised over $3.1 million in 2021/2022:
$1.5 million PIPE in April 2021
$1.02 million insider loan in October 2021
$600K loan in May 2022
For that money, they got about $1.05 million worth of mirror inventory, or around $1.4 million retail pricing (when the mirrors were selling for $899/$1099). The rest of the money went to keeping the lights on, and paying fat salaries.
As of 6/30/2022, CAPC had $725K cash, and $9.5K accounts receivable. During the first half of 2022, CAPC spent $1.140M on operating activities, or $570K/quarter average.
$735K/$570K = 1.29 quarters worth of cash, or a bit under 4 months.
That takes us to around Halloween 2022. Spoooooky!
The 'Littlebanc' shares have been hitting the float since October last year, when the 6 month holding period expired.
That's almost a year of you claiming 'Littlebanc' is done selling!
Over 1.2 million shares still need to hit the float. Half the 'Littlebanc' dilution.
Meanwhile, Capstone has dropped the price of the mirrors by $200. They've sold about 45 mirrors through 6/30/2022. Remember when the claim was they'd sell a million mirrors a year?
Capstone needs a cash infusion. I figure they have until the end of October before it runs out. Would you like to see the math on that?
Will they take on more debt (now over $1.6 million - remember when the claim was 'CAPC is Debt Free'), or will they sell more dilutive shares (remember when the claim was 'CAPC doesn't Dilute')?
Let's examine the oft repeated Lie that 'Littlebanc' is almost out
The data/facts:
Date Outstanding Restricted Unrestricted Change R Change U
10/1/2021 49,643,031 24,936,289 24,706,742
11/1/2021 49,643,031 24,921,289 24,721,742 -15,000 15,000
12/2/2021 49,643,031 24,205,348 25,437,683 -715,941 715,941
1/3/2021 49,643,031 24,061,535 25,581,496 -143,813 143,813
2/1/2022 49,643,031 24,061,535 25,581,496 0 0
3/1/2022 49,643,031 24,062,721 25,580,310 1,186 -1,186
4/1/2022 49,643,031 24,016,521 25,626,510 -46,200 46,200
5/2/2022 49,643,031 23,956,621 25,686,410 -59,900 59,900
6/1/2022 49,643,031 23,922,121 25,720,910 -34,500 34,500
7/1/2022 49,643,031 23,800,119 25,842,912 -122,002 122,002
9/1/2022 49,643,031 23,727,121 25,915,910 -72,998 72,998
-1,209,168 1,209,168
April PIPE 2,496,667 1,287,499 shrs left
51.57 %
Well, the recent mini-flurry of buying is explained.
I guess some got an early heads-up on a price drop. Standard mirror is $699, wardrobe mirror is $899.
Will that spark sales? I guess we'll see.
$699 is probably a bit below previous inventory cost, so we should see a write-down in 3Q to account for this.
https://capstoneconnected.com/#our_products
Silly, that's how you print airshares!
I've been printing TRTN/JBII/PTOI for over a decade... just hangout by the dumpster behind Office Depot and snag the empty printer cartridges.
They can't track what they can't see! Invisible naked shorters from Mars!