Capstone Companies Inc (CAPC)

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Couple of take-aways from the 10Q

They did find some stock of LED lighting to sell internationally (Asia?) for $44K. My full year revenue/loss prediction remains unchanged. $625K revenue/$2.2 million loss.

Enough cash to operate for 12 months, because of dilution and debt. We're just now seeing the effect of the dilution, as the PIPE shares come off the 6 month holding restriction. $1.20 was the floor, then $1.05, now $0.90.

The claim that 3,000 mirrors would be complete, just needing FCC stickers, by the end of Sept. 30, 2021? False. Inventory of just $25K at 3Q end shows this. You can have pretty good confidence that they bought parts and sub-assemblies to make 3,000 mirrors; prepaid expense of $750K probably accounts for that.

Just noticed they decided in January 2020 (just after CES) to stop using Max Borges for marketing. This tells me they already knew the first design (the 8 inch tablet that plugs into the back of the mirror) was a dud. They spent all 2020 redesigning the smart mirror, with the first prototypes coming out in January 2021 (when the first short video clips were posted on Youtube). Covid Excuses during 2020 covered management on this misstep.

They've rehired Max Borges from Oct. 18th for 60 days. My guess is the agency will re-do all the marketing material using the new design (most of the marketing material on capstoneconnected.com still shows the old design). No ongoing marketing of the Smart Mirror at this time. Not a sign of sales confidence, in my opinion.