Capstone Companies Inc (CAPC)

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OBS still a start-up

with small sales so far.


OBS remains a start-up concern that has generated a few small
sales as of the date of this Report and relies on funding from China Direct,
supplemented by loans from Howard Ullman, a senior officer and director of China
Direct and SDI, to fund business operations. OBS is currently seeking vendor
relationships for its roofing tiles with the local South Florida stores of two
large national home improvement chains as well as marketing its roofing tiles to
local contractors and building supplies resellers. There can be no assurance
that any of these efforts will result in actual sales or profits, but OBS
believes, based on its marketing efforts to date, that there is a substantial
opportunity to sell OBS' Chinese-made roofing tiles in South Florida, especially
in light of the current, perceived storage in roofing tile inventory. Former
plans to market OBS roofing tiles in the Gulf States Region have been postponed
to devote resources to Capstone's business development efforts.