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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Capstone Companies Inc (QB) | USOTC:CAPC | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.014 | 0.013 | 0.016 | 0.00 | 14:30:11 |
Florida
|
84-1047159
|
(State or Other Jurisdiction of Incorporation)
|
(I.R.S. Employer No.)
|
Item Number
|
Description
|
Page
|
Part I
|
||
Item 1.
|
Business
|
6 |
Item 1A.
|
Risk Factors
|
15 |
Item 1B.
|
Unresolved Staff Comments
|
22 |
Item 2.
|
Properties
|
22 |
Item 3.
|
Legal Proceedings
|
22 |
Item 4.
|
Mine Safety Disclosures (Not Applicable)
|
23 |
Part II
|
||
Item 5.
|
Market for Common Equity and Related Stockholder Matters
|
23 |
Item 6.
|
Selected Financial Data (Not Applicable)
|
23 |
Item 7.
|
Management's Discussion and Analysis of Financial Condition and Results of Operation
|
24 |
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk (Not Applicable)
|
30 |
Item 8.
|
Financial Statements and Supplementary Data
|
30 |
Item 9.
|
Change in and Disagreements with Accountants on Accounting and Financial Disclosure
|
30 |
Item 9A.
|
Controls and Procedures
|
31 |
Item 9B.
|
Other Information
|
32 |
Part III
|
||
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
32 |
Item 11.
|
Executive Compensation
|
40 |
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
45 |
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
47 |
Item 14.
|
Principal Accounting Fees and Services
|
49 |
Part IV
|
||
Item 15.
|
Exhibits, Financial Statement Schedules
|
50 |
(1)
|
"Capstone Lighting Technologies, L.L.C." or "CLTL" is a wholly owned subsidiary of Capstone Companies, Inc.
|
(2)
|
"Capstone International Hong Kong Ltd" or "CIHK" is a wholly owned subsidiary of Capstone Companies, Inc. and a Hong Kong registered Company.
|
(3)
|
"Capstone Industries, Inc., a Florida corporation and a wholly owned subsidiary of CAPC, may also be referred to as "CAPI."
|
(4)
|
"Capstone Companies, Inc.," a Florida corporation, may also be referred to as "we," "us" "our," "Company," or "CAPC." Unless the context indicates otherwise, "Company" includes in its meaning all of Capstone Companies, Inc. Subsidiaries.
|
(5)
|
"China" means Peoples' Republic of China.
|
(6)
|
"W" means watts.
|
(7)
|
References to "33 Act" or "Securities Act" means the Securities Act of 1933, as amended.
|
(8)
|
References to "34 Act" or "Exchange Act" means the Securities Exchange Act of 1934, as amended.
|
(9)
|
"SEC" or "Commission" means the U.S. Securities and Exchange Commission.
|
(10)
|
"Subsidiaries" means Capstone Industries, Inc. (CAPI), Capstone International H.K Ltd., (CIHK), and Capstone Lighting Technologies, Inc. CLTL.
|
(11)
|
Any reference to fiscal year in this Annual Report on Form 10-K means our fiscal year, which is the same as a calendar year basis.
|
·
|
Designed to make everyday tasks or usage simpler and more enjoyable for consumers;
|
·
|
While continuing to focus on increased profit margins, the products must be affordable to win at the point of sale and deliver increased revenues for retail partners;
|
·
|
The products must represent significant value when compared with items produced or marketed by competitive consumer product companies; and
|
·
|
Wherever feasible, the products must be unique to the market whether this be accomplished though design techniques, added functionality or some proprietary innovation.
|
Employee Function
|
Number of Employees
|
Executive
|
3
|
Sales/Customer Service/Distribution
|
4
|
Research & Development/Technology/Product Development
|
4
|
Administrative
|
3
|
TOTAL
|
14
|
·
|
a significant portion of CAPC's cash from operations could be dedicated to the payment of interest and principal on our debt, which could reduce the funds available for operations;
|
·
|
the level of our debt could leave CAPC vulnerable in a period of significant economic downturn; and
|
·
|
CAPC may not be financially able to withstand significant and sustained competitive pressures.
|
·
|
develop and fund research and technological innovations;
|
·
|
receive and maintain necessary intellectual property protections;
|
·
|
obtain governmental approvals and registrations;
|
·
|
comply with governmental regulations, and
|
·
|
anticipate consumer needs and preferences successfully.
|
·
|
CAPC's primary competitors have substantially greater financial, marketing and other resources and greater market share in certain segments than CAPC does, as well as significant scale and negotiating leverage with retailers;
|
·
|
CAPC's competitors may have lower production, sales and distribution costs, and higher profit margins, than CAPC, which may enable them to compete more aggressively in offering retail discounts and other promotional incentives;
|
·
|
loss of key retailer customers to competitors may erode CAPC's market share; and
|
·
|
the level and nature of advertising and promotional spending by CAPC could impact consumer demand, retailer decisions regarding our product offerings, limit our access to shelf space, and hinder our ability to expand distribution to new retailer customers.
|
·
|
the possibility of expropriation, confiscatory taxation
,
or price controls;
|
·
|
adverse changes in local investment or exchange control regulations;
|
·
|
political or economic instability, government nationalization of business or industries, government corruption, and civil unrest;
|
·
|
legal and regulatory constraints;
|
·
|
tariffs and other trade barriers; and
|
·
|
difficulty in enforcing contractual and intellectual property rights.
|
·
|
in the U.S., claims and advertising with respect to our products are regulated by the Federal Trade Commission;
|
·
|
our operations are subject to taxation by federal, state, local and foreign taxing authorities;
|
·
|
in foreign countries where we manufacture or sell our products, we are subject to each countries taxing regulation, and in the U.S. by state and local authorities; and
|
·
|
our selling practices are regulated by competition and anti-trust authorities in the U.S. and abroad.
|
·
|
availability of raw materials;
|
·
|
work stoppages or other labor disputes;
|
·
|
power supply disruptions;
|
·
|
industrial accidents or other occupational health and safety issues;
|
·
|
disruptions in logistics;
|
·
|
loss or impairment of key manufacturing sites;
|
·
|
raw material and product quality or safety issues;
|
·
|
licensing requirements and other regulatory issues; and
|
·
|
acts of war, terrorism, pandemics, fire, earthquake, flooding or other natural disasters.
|
·
|
the risk that our industry may develop in a different direction than anticipated and that the technologies we acquire do not prove to be those we need to be successful in the industry;
|
·
|
the risk that future valuations of acquired businesses may decrease from the market price we paid for these acquisitions;
|
·
|
the generation of insufficient revenues by acquired businesses to offset acquisition costs and increased operating expenses associated with these acquisitions;
|
·
|
the potential difficulties in completing in-process research and development projects and delivering high quality products to our customers;
|
·
|
the potential difficulties in integrating new products, businesses
,
and operations in an efficient and effective manner;
|
·
|
the risk that our customers or customers of the acquired businesses may defer purchase decisions as they evaluate the impact of the acquisitions on our future product strategy;
|
·
|
the potential loss of key employees of the acquired businesses;
|
·
|
the risk that acquired businesses will divert the attention of our senior management from the operation of our core Capstone business;
|
·
|
the risks of entering new markets in which we have limited experience and where competitors may have a stronger market presence;
|
·
|
our inability to successfully operate and integrate newly-acquired businesses appropriately, effectively and in a timely manner could have a material adverse effect on our ability to take advantage of further growth in demand for products in our marketplace, as well as on our revenues, gross margins and expenses.
|
·
|
our lack of primary market makers for our Common Stock – we have market makers but none are primary market makers who maintain an inventory of our Common Stock and actively support the Common Stock;
|
·
|
general worldwide economic conditions and the current crisis in the financial markets;
|
·
|
the lack of research analysts or news media coverage of CAPC or our Common Stock;
|
·
|
additions or departures of key personnel;
|
·
|
sales of our Common Stock by the Company or insiders;
|
·
|
our status as a "penny stock" Company;
|
·
|
our ability to execute our business plan;
|
·
|
operating results being below expectations;
|
·
|
loss of any strategic relationships;
|
·
|
industry or product developments;
|
·
|
sale of a substantial number of shares may cause the price of our Common Stock to decline;
|
·
|
economic and other external factors; and
|
·
|
period-to-period fluctuations and the uncertainty in our financial results.
|
2015
|
2014
|
|||
high
|
low
|
high
|
low
|
|
1
st
Quarter
|
.0
305
|
.0
185
|
.0
260
|
.0
230
|
2
nd
Quarter
|
.0
249
|
.0
162
|
.0
520
|
.0
480
|
3
rd
Quarter
|
.0
205
|
.0
090
|
.0
330
|
.0
300
|
4
th
Quarter
|
.0
340
|
.0
100
|
.0
240
|
.0
200
|
-
|
Economic Conditions in Primary Market of North America
. Our products are more of a discretionary than essential consumer purchase and economic conditions, especially consumer uncertainty or worries over economic conditions and growth, affect consumer demand for our products. The current sluggish growth in the U.S. economy and uncertainty over global economic conditions that may affect the U.S. economy is not conducive to consumer purchases of our category of consumer products.
|
-
|
Weather
.
Uncertain or adverse weather conditions makes our products more appealing to or a higher priority for consumers.
|
-
|
Profit Margins
.
We need product profit margins that produce profitability on a sustained basis and concurrently control the cost of product development and marketing costs to sustain or grow market share.
|
-
|
Technology
.
We need to find new technologies or new functionality to differentiate our products from competitors' products, increase consumer demand for our products and foster consumer willingness to pay a higher product purchase price.
|
-
|
Affordable Funding
.
We need access to affordable funding to support new product development and new market penetration
.
Future funding needs
and the adequacy of our available funds will depend on many factors, including:
|
·
|
Our ability to successfully commercialize and further develop our technologies and
|
·
|
create innovative products in our markets;
|
·
|
Need for new product design or technology enhancements;
|
·
|
Competition in our primary markets; and
|
·
|
Cash flow from operations and profit margins of products.
|
2015
|
2014
|
2013
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Sales
|
$
|
15,924
|
$
|
13,624
|
$
|
14,594
|
||||||
Gross Margin %
|
24.0
|
%
|
20.4
|
%
|
24.7
|
%
|
||||||
SG&A Expenses
|
$
|
2,799
|
$
|
2,891
|
$
|
2,494
|
||||||
SG&A Expenses as a Percentage of Sales
|
17.6
|
%
|
21.2
|
%
|
17.1
|
%
|
||||||
Interest Expense
|
$
|
317
|
$
|
328
|
$
|
389
|
||||||
Effective Tax Rate
|
1
|
%
|
0
|
%
|
0
|
%
|
||||||
Net (Loss) Earnings
|
$
|
699
|
$
|
(437
|
)
|
$
|
727
|
2015
|
2014
|
2013
|
||||||||||
Sales
|
||||||||||||
(In thousands, except percentages)
|
||||||||||||
Net Revenue
|
$
|
15,924
|
$
|
13,625
|
$
|
14,594
|
||||||
Gross Profit
|
$
|
3,824
|
$
|
2,782
|
$
|
3,610
|
||||||
Operating Margin
|
24.0
|
%
|
20.4
|
%
|
24.7
|
%
|
||||||
Assets
|
2015
|
2014
|
2013
|
|||||||||
(In thousands, except percentages)
|
||||||||||||
Total Assets
|
$
|
8,773
|
$
|
4,335
|
$
|
11,278
|
Payments Due by Period
|
||||||||||||||||||||
Total
|
2016
|
2017
|
2018
|
After 2018
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Purchase Obligations
|
$
|
2,164
|
$
|
2,164
|
$
|
0
|
$
|
0
|
$
|
0
|
||||||||||
Short-Term Debt
|
4,339
|
4,339
|
0
|
0
|
0
|
|||||||||||||||
Long-Term Debt
|
0
|
0
|
0
|
0
|
0
|
|||||||||||||||
Operating Leases
|
119
|
111
|
8
|
0
|
0
|
|||||||||||||||
Total Contractual Obligations
|
$
|
6,622
|
$
|
6,614
|
$
|
8
|
$
|
0
|
$
|
0
|
2015
|
2014
|
2013
|
||||||||||
(In thousands)
|
||||||||||||
Net cash provided (used) by:
|
||||||||||||
Operating Activities
|
$
|
(1,849
|
)
|
$
|
5,137
|
$
|
(2,944
|
)
|
||||
Investing Activities
|
$
|
(88
|
)
|
(90
|
)
|
(513
|
)
|
|||||
Financing Activities
|
1,989
|
(5,170
|
)
|
3,482
|
1.
|
Stewart Wallach. Mr. Wallach has been a Director since April 2007.
|
2.
|
Gerry McClinton. Mr. McClinton has been a Director since February 2008.
|
3.
|
Jeffrey Postal. Mr. Postal has been a Director since January 2004.
|
4.
|
Jeffrey Guzy. Mr. Guzy was appointed as a Director on May 3, 2007. Mr. Guzy is deemed an "Independent Director."
|
5.
|
Larry Sloven. Mr. Sloven was appointed as a Director on May 3, 2007.
|
(1)
|
Company's management has represented to the Audit Committee that the 2015 audited financial statements were prepared in accordance with accounting principles generally accepted in the United States of America. The Audit Committee has reviewed and discussed the audited financial statements for year 2015 with Company's management and the independent registered public accounting firm.
|
(2)
|
The Audit Committee has received written disclosures and a letter from the independent registered public accounting firm, Mayer Hoffman McCann P.C. required by the PCAOB and has discussed with Mayer Hoffman McCann P.C. their independence.
|
(3)
|
Based on the review and discussion referred to above, the Audit Committee recommended to the board, and the board has approved, that the audited financial statements be included in Company's Annual Report on Form 10K for the year ended December 31, 2015, as filed with the Commission on March 23, 2016
.
|
·
|
discharge the Board's responsibilities relating to compensation of our executive officers;
|
·
|
administer our stock option plans, stock purchase plans, restricted stock plans and any other equity incentive plans adopted; and
|
·
|
provide disinterested administration of any employee benefit plans in which our executive officers are eligible to participate.
|
Name
(1)
|
Audit Committee
|
Nomination and Compensation Committees
|
Total Awards
|
|||||||||
Stewart Wallach
(2)
|
-
|
-
|
-
|
|||||||||
Gerry McClinton
(2)
|
-
|
-
|
-
|
|||||||||
Jeff Guzy
(3), (4)
|
$
|
15,134
|
$
|
30,269
|
$
|
45,403
|
||||||
Jeff Postal
(3), (4)
|
$
|
15,134
|
$
|
30,269
|
$
|
45,403
|
||||||
Larry Sloven
(2)
|
-
|
-
|
-
|
(1)
|
The individuals listed were appointed to the Board of Directors for 2015;
|
(2)
|
Mr. Wallach, Mr. McClinton and Mr. Sloven as Company Employees did not receive compensation for participating as a Director on the Board;
|
(3)
|
On January2
nd
,
2015 Mr. Guzy and Mr. Postal each received 1,500,000 stock option grants for participating in the Audit and Nomination and Compensation Committees for the year 2014-2015. The market value using the Bionomial Lattice pricing model for each grant was $34,500.
|
(4)
|
On August 6
th
,
2015, Mr. Guzy and Mr. Postal each received 1,500,000 stock option grants for participating in the Audit and Nonmination and Compensation Committees for the year 2015-2016. The market value using the Bionomial Lattice pricing model for each grant was $27,000. As the grant period covered 2015-2016, the cost impact in 2015 was $10,903 for each grant.
|
Ø
|
contributions to the range of talent, skill and expertise appropriate for the Board;
|
Ø
|
financial, regulatory and business experience, knowledge of the operations of public companies and ability to read and understand financial statements;
|
Ø
|
familiarity with the Company's market;
|
Ø
|
personal and professional integrity, honesty and reputation;
|
Ø
|
the ability to represent the best interests of the shareholders of the Company and the best interests of the institution;
|
Ø
|
the ability to devote sufficient time and energy to the performance of his or her duties; and
|
Ø
|
independence under applicable Commission and listing definitions.
|
1.
|
The name of the person recommended as a director candidate;
|
2.
|
All information relating to such person that is required to be disclosed in solicitations of proxies for election of directors pursuant to Regulation 14A under the Securities Exchange Act of 1934;
|
3.
|
The written consent of the person being recommended as a director candidate to being named in the proxy statement as a nominee and to serving as a director if elected;
|
4.
|
The name and address of the stockholder making the recommendation, as they appear on the Company's books; provided, however, that if the stockholder is not a registered holder of the Company's common stock, the stockholder should submit his or her name and address along with a current written statement from the record holder of the shares that reflects ownership of the Company's common stock; and
|
5.
|
A statement disclosing whether such stockholder is acting with or on behalf of any other person and, if applicable, the identity of such person.
|
1.
|
Stewart Wallach, age 64, was appointed as Chief Executive Officer and President of the Company on April 23, 2007. Mr. Wallach is also the senior executive officer and director of Capstone.
|
2.
|
Gerry McClinton, age 60, is the Chief Financial Officer and Chief Operating Officer and a director (appointed as a director on February 5, 2008) of the Company. Mr. McClinton is also a senior executive of Capstone.
|
3.
|
Aimee Gaudet, age 37
,
was appointed on January 16, 2013 as Company Secretary. She is also Executive Assistant to Stewart Wallach at CAPC.
|
-
|
Energie Holdings, Inc.
|
-
|
Cyalume Technologies Holdings, Inc.
|
-
|
Evolucia Inc.
|
-
|
Leatt Corp.
|
-
|
Lighting Science Group, Inc.
|
-
|
Safety Quick Lighting & Fans Corp.
|
-
|
Xenonics Holdings, Inc.
|
·
|
reviewing the structure and competitiveness of our executive compensation programs to attract and retain superior executive officers, motivate officers to achieve business goals and objectives, and align the interests of executive officers with the long-term interests of our shareholders;
|
·
|
reviewing and evaluating annually the performance of officers in light of company goals and objectives and approving their compensation packages, including base salaries (if at issue or in consideration), long-term incentive and stock based compensation and perquisites;
|
·
|
monitoring the effectiveness of the Company's sole incentive stock option plan and approving annual financial targets for officers; and
|
·
|
determining whether to award incentive bonuses that qualify as "performance-based compensation" for executive officers whose compensation is covered by Code Section 162(m), the elements of such compensation, whether performance goals have been attained and, if appropriate, certifying in writing prior to payment of such compensation that the performance goals have been met.
|
·
|
base salary;
|
·
|
annual incentive;
|
·
|
long-term incentive compensation (restricted stock awards); and
|
·
|
perquisites and other benefits.
|
Name & Principal Position
|
Year
|
Salary $
|
Bonus $
|
Stock Awards $
|
Non-Equity Incentives $
|
All Others $
|
TOTAL
|
|||||||||||||||||||||||
Stewart Wallach, Chief Executive Officer
(1,2,4,5,8,9)
|
2015
|
$
|
287,163
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
287,163
|
|||||||||||||||||
|
2014 |
$
|
287,163
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
287,163
|
|||||||||||||||||
|
2013
|
$
|
287,163
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
287,163
|
|||||||||||||||||
|
2012
|
$
|
273,488
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
273,488
|
|||||||||||||||||
|
2011
|
$
|
180,000
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
180,000
|
|||||||||||||||||
|
2010
|
$
|
186,923
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
186,923
|
|||||||||||||||||
|
2009
|
$
|
236,250
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
236,250
|
|||||||||||||||||
James G. McClinton, Chief Financial Officer & COO
(1,3,6,7,8,9)
|
2015
|
$
|
191,442
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
191,442
|
|||||||||||||||||
|
2014
|
$
|
191,442
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
191,442
|
|||||||||||||||||
|
2013
|
$
|
191,442
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
191,442
|
|||||||||||||||||
|
2012
|
$
|
182,325
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
182,325
|
|||||||||||||||||
|
2011
|
$
|
146,250
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
146,250
|
|||||||||||||||||
|
2010
|
$
|
124,615
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
124,615
|
|||||||||||||||||
|
2009
|
$
|
157,500
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
157,500
|
(1)
|
Each Employment Agreement provided for an annual minimum salary increase of 5% up to year 2015, however Stewart Wallach earned $287,163 in 2015 and Gerry McClinton earned $191,442 in 2015 the same as amounts earned in 2014.
|
(2)
|
Although approved for a salary of $301,521, Stewart Wallach earned $287,163 in 2014.
|
(3)
|
Although approved for a salary of $201,014, Gerry McClinton earned $191,442 in 2014.
|
(4)
|
Although approved for a salary of $260,465, Stewart Wallach took a voluntary salary reduction and earned $180,000 in 2011.
|
(5)
|
Although approved for a salary of $248,060, Stewart Wallach took a voluntary salary reduction and earned $186,923 in 2010.
|
(6)
|
Although approved for a salary of $173,643, Gerry McClinton took a voluntary salary reduction and earned $146,250 in 2011.
|
(7)
|
Although approved for a salary of $165,375, Gerry McClinton took a voluntary salary reduction and earned $124,615. In 2010.
|
(8)
|
The Company has no non-equity incentive plans.
|
(9)
|
The Company has no established bonus plan. Any bonus payments are made ad hoc upon recommendation of Compensation Committee and approval by Board of Directors. Bonuses are only paid on a performance basis.
|
Name
|
No. of Shares
Underlying
|
% of Total Options
Granted Employees
in 2015
|
Expiration
Date
|
Restricted
Stock Grants
|
No. Shares
underlying Options
Options Granted
in 2015
|
Stewart Wallach
|
22,733,333
|
-0-
|
4/27/2017
|
-0-
|
-0-
|
Gerry McClinton
|
32,250
,000
|
-0-
|
4/27/2017
|
-0-
|
-0-
|
NAME/POSITION
|
YEAR
|
SEVERANCE
PACKAGE
|
CAR
ALLOWANCE
|
CO. PAID
SERVICES
|
TRAVEL
LODGING
|
TOTAL($)
|
Stewart Wallach
|
2015
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
Chief Executive
|
2014
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
Officer
|
2013
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
Gerry McClinton
|
2015
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
Chief Operating
|
2014
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
Officer & Chief
|
2013
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
Financial Officer
|
NAME
|
Securities Underlying
Unexercised Options
|
Option Exercise
Price
|
Option
Expiration Date
|
Stewart Wallach
|
22,733,333
|
.029
|
4/27/2017
|
Stewart Wallach
(2)
|
1,764,706
|
.017
|
10/01/2017
|
Gerry McClinton
|
32,250,000
|
.029
|
4/27/2017
|
(1)
|
The Company does not have any stock awards for the years specified.
|
(2)
|
Mr. Wallach acquired 1,764,706 Company warrants on 10/01/2007 as part of $100,000 investment in the Company's 2007 private placement under rule 506 of restricted shares of common stock.
|
Name
|
Number of Shares
Acquired on Exercise
|
Value Realized on
Exercise
|
Stewart Wallach
|
-0-
|
-0-
|
Gerry McClinton
|
-0-
|
-0-
|
SALARY
SEVERANCE
|
BONUS
SEVERANCE
|
GROSS UP
TAXES
|
BENEFIT
COMPENSATION
|
GRAND TOTAL
TOTAL
|
||||||||||||||||
Stewart Wallach
|
$
|
287,163
|
-0-
|
$
|
12,200
|
$
|
10
,000
|
$
|
309,363
|
|||||||||||
Gerry McClinton
|
$
|
191,442
|
-0-
|
$
|
10,200
|
$
|
10
,000
|
$
|
211,642
|
OWNERSHIP OF OFFICERS, DIRECTORS AND PRINCIPAL SHAREHOLDERS
|
|||||||
as of December 31, 2015
|
|||||||
ALL OPTION WARRANT SHARES
|
|||||||
NAME, ADDRESS & TITLE
|
STOCK OWNERSHIP
|
PERCENTAGE OF STOCK OWNERSHIP
|
STOCK OWNERSHIP AFTER CONVERSION OF ALL OPTIONS & WARRANTS PLUS THOSE EXERCISEABLE WITHIN THE NEXT 60 DAYS
|
% OF STOCK OWNERSHIP AFTER CONVERSION OF ALL OPTIONS & WARRANTS PLUS THOSE EXERCISEABLE WITHIN THE NEXT 60 DAYS
|
VESTED
|
EXPIRED
|
NOT VESTED
|
Stewart Wallach, CEO, 350 Jim Moran Blvd, Suite 120, Deerfield Beach, FL 33442
|
147,618,822
|
20.4%
|
172,116,861
|
21.2%
|
24,498,039
|
0
|
0
|
Gerry McClinton, CFO, & Director, 350 Jim Moran Blvd, Suite 120, Deerfield Beach, FL 33442
|
504,949
|
0.1%
|
32,754,949
|
4.0%
|
32,250,000
|
0
|
0
|
Jeff Postal, Director, 350 Jim Moran Blvd, Suite 120, Deerfield Beach, FL 33442
|
128,381,748
|
17.8%
|
133,881,748
|
16.5%
|
5,500,000
|
1,000,000
|
1,500,000
|
Aimee C. Gaudet, Secretary, 350 Jim Moran Blvd, Suite 120, Deerfield Beach, FL 33442
|
0
|
0.0%
|
300,000
|
0.0%
|
300,000
|
0
|
150,000
|
Jeff Guzy, Director, 3130 19th Street North, Arlington, VA 22201
|
832,000
|
0.1%
|
6,832,000
|
0.8%
|
6,000,000
|
1,500,000
|
1,500,000
|
Larry Sloven, Director, 350 Jim Moran Blvd, Suite 120, Deerfield Beach, FL 33442
|
792,000
|
0.1%
|
2,792,000
|
0.3%
|
2,000,000
|
1,000,000
|
0
|
ALL OFFICERS & DIRECTORS AS A GROUP
|
278,129,519
|
38.5%
|
348,677,558
|
43.0%
|
70,548,039
|
3,500,000
|
3,150,000
|
PRINCIPAL SHAREHOLDERS
|
|||||||
Involve, LLC c/o Michael Harris, Esq.; Nason, Yeager, Gerson, White & Lioce, PA, 1645 Palm Beach Lakes Blvd. 12th Floor, WPB, FL 33401
|
67,979,425
|
9.4%
|
67,979,425
|
8.4%
|
0
|
0
|
0
|
SUBTOTAL PRINCIPAL SHAREHOLDERS
|
67,979,425
|
9.4%
|
67,979,425
|
8.4%
|
0
|
0
|
0
|
TOTAL
|
346,108,944
|
47.9%
|
416,656,983
|
51.4%
|
70,548,039
|
3,500,000
|
3,150,000
|
·
|
Benefits derived by the related person from the transaction versus the benefits derived by the Company;
|
·
|
Total value of the transaction;
|
·
|
Whether the transaction was undertaken in the ordinary course of business of the Company; and
|
·
|
Were the terms and conditions of the transaction usual and customary and commercially reasonable.
|
Name of Lending Officer or Director
|
Amount of Principal of Loan as of December 31,2015
|
Interest Rate
|
Maturity Date
|
Principal Balance as of March 4, 2016
|
|||||||||
Stewart Wallach
|
$
|
250,000
|
8
|
%
|
04/01/2016
|
$
|
250,000
|
||||||
Jeffrey Postal
|
$
|
250,000
|
8
|
%
|
04/01/2016
|
$
|
250,000
|
||||||
Stewart Wallach
|
$
|
209,473
|
8
|
%
|
04/01/2016
|
$
|
209,473
|
||||||
JWTR Holdings LLC
|
$
|
209,473
|
8
|
%
|
04/01/2016
|
$
|
209,473
|
||||||
Stewart Wallach
|
$
|
75,000
|
8
|
%
|
04/01/2016
|
0
|
|||||||
Jeffrey Postal
|
$
|
100,000
|
8
|
%
|
04/01/2016
|
$
|
100,000
|
||||||
Postal Capital Funding
|
$
|
498,000
|
8
|
%
|
04/01/2016
|
$
|
498,000
|
||||||
Total
|
$
|
1,591,946
|
$
|
1,516,946
|
2015
|
2014
|
|||||||
Audit Fees
|
$
|
0
|
$
|
25,906
|
||||
Tax Fees
|
$
|
0
|
$
|
0
|
||||
Total
|
$
|
0
|
$
|
25,906
|
2015
|
2014
|
|||||||
Audit Fees
|
$
|
83,000
|
$
|
49,000
|
||||
Tax Fees
|
$
|
4,550
|
$
|
7,000
|
||||
Total
|
$
|
87,550
|
$
|
56,000
|
*
|
Incorporated by reference to Annex G to the Special Meeting Proxy Statement, Dated April 15, 2004, filed by CHDT Corporation with the Commission on April 20, 2004.
|
**
|
Incorporated by reference to Exhibit 3(I) to the Form 8-K filed by CHDT Corporation with the Commission on July 10, 2007.
|
***
|
Incorporated by reference to Annex H the Special Meeting Proxy Statement, Dated April 15, 2004, filed by CHDT Corporation with the Commission on April 20, 2004.
|
****
|
Incorporated by reference to Exhibit 99.2 to the Form 8-K filed by CHDT Corp. With the Commission on November 6, 2007.
|
+
|
Incorporated by reference to Exhibit 2 to the Form 8-K filed by CHDT Corporation with the Commission on January 31, 2006.
|
++
|
Incorporated by reference to Exhibit 2 to the Form 8-K filed by CHDT Corporation with the Commission on January 26, 2007.
|
+++
|
Incorporated by reference to Exhibit 2.1 to the Form 8-K filed by CHDT Corporation with the Commission on September 18, 2006.
|
++++
|
Incorporated by reference to Exhibit 99 to the Form 8-K filed by CHDT Corp. With the Commission on December 3, 2007.
|
+++++
|
Incorporated by reference to Exhibit 14 to the Form 10-KSB for the fiscal year ended December 31, 2006 and filed by CHDT Corp. With the Commission on April 17, 2007.
|
∞
|
Incorporated by reference to Exhibit 3.1 to Form 8-K filed by Capstone Companies, Inc. with the Commission on July 14, 2009.
|
∞∞
|
Incorporated by reference to Exhibit 10.1 to Form 8-K filed by Capstone Industries, Inc. with the Commission on April 6, 2012.
|
^^
|
Filed as an exhibit to the Form 10-K for the fiscal year ending December 31, 2007.
|
^
|
Filed Herein.
|
Computer equipment
|
3 - 7 years
|
Computer software
|
3 - 7 years
|
Machinery and equipment
|
3 - 7 years
|
Furniture and fixtures
|
3 - 7 years
|
December 31, 2015
|
December 31, 2014
|
|||||||
Basic weighted average shares outstanding
|
698,709,332
|
654,524,231
|
||||||
Dilutive Warrants
|
2,033,169
|
-
|
||||||
Diluted weighted average shares outstanding
|
700,742,501
|
654,524,231
|
·
|
Level one
— Quoted market prices in active markets for identical assets or liabilities;
|
·
|
Level two
— Inputs other than level one inputs that are either directly or indirectly observable; and
|
·
|
Level three
— Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.
|
Gross Revenue %
|
Accounts Receivable
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Customer A
|
89
|
%
|
68
|
%
|
$
|
4,610,852
|
$
|
1,088,610
|
||||||||
Customer B
|
7
|
%
|
24
|
%
|
1,063,755
|
-
|
||||||||||
96
|
%
|
92
|
%
|
$
|
5,674,607
|
$
|
1,088,610
|
Purchases %
|
Accounts Payable
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Vendor A
|
73
|
%
|
-
|
%
|
$
|
1,486,648
|
$
|
-
|
||||||||
Vendor B
|
18
|
%
|
99
|
%
|
350,770
|
462,269
|
||||||||||
91
|
%
|
99
|
%
|
$
|
1,837,418
|
$
|
462,269
|
Year Ended December, 31,
|
US
|
HK
|
Total
|
|||||||||
2016
|
$
|
90,579
|
$
|
20,325
|
$
|
110,904
|
||||||
2017
|
7,559
|
-
|
7,559
|
|||||||||
Total lease obligation
|
$
|
98,138
|
$
|
20,325
|
$
|
118,463
|
Weighted
|
||||||||||||||||
Weighted
|
Average
|
|||||||||||||||
Average
|
Remaining
|
Aggregate
|
||||||||||||||
Exercise
|
Contractual
|
Intrinsic
|
||||||||||||||
Shares
|
Price
|
Term (Years)
|
Value
|
|||||||||||||
Outstanding, January 1, 2014
|
74,383,333
|
$
|
0.029
|
3.28
|
$
|
-
|
||||||||||
Granted
|
3,150,000
|
0.029
|
-
|
-
|
||||||||||||
Exercised
|
-
|
-
|
-
|
-
|
||||||||||||
Forfeited/expired
|
-
|
-
|
-
|
-
|
||||||||||||
Outstanding, December 31, 2014
|
77,533,333
|
$
|
0.029
|
2.36
|
$
|
-
|
||||||||||
Granted
|
6,300,000
|
0.029
|
-
|
-
|
||||||||||||
Exercised
|
-
|
-
|
-
|
-
|
||||||||||||
Forfeited/expired
|
(4,750,000
|
)
|
0.029
|
-
|
-
|
|||||||||||
Outstanding, December31, 2015
|
79,083,333
|
$
|
0.029
|
1.73
|
$
|
-
|
||||||||||
Vested/exercisable at December, 31, 2014
|
77,533,333
|
$
|
0.029
|
2.36
|
$
|
-
|
||||||||||
Vested/exercisable at December, 31, 2015
|
75,933,333
|
$
|
0.029
|
1.60
|
$
|
-
|
Exercise Price
|
Options Outstanding
|
Remaining Contractual Life in Years
|
Average Exercise Price
|
Number of Options Currently Exercisable
|
||||||||||||||
$
|
.029
|
54,983,333
|
1.33
|
$
|
.029
|
54,983,333
|
||||||||||||
$
|
.029
|
2,500,000
|
2.33
|
$
|
.029
|
2,500,000
|
||||||||||||
$
|
.029
|
700,000
|
3.33
|
$
|
.029
|
700,000
|
||||||||||||
$
|
.029
|
1,000,000
|
1.83
|
$
|
.029
|
1,000,000
|
||||||||||||
$
|
.029
|
150,000
|
2.08
|
$
|
.029
|
150,000
|
||||||||||||
$
|
.029
|
850,000
|
3.42
|
$
|
.029
|
850,000
|
||||||||||||
$
|
.029
|
300,000
|
4.42
|
$
|
.029
|
300,000
|
||||||||||||
$
|
.029
|
4,500,000
|
0.50
|
$
|
.029
|
4,500,000
|
||||||||||||
$
|
.029
|
150,000
|
5.50
|
$
|
.029
|
150,000
|
||||||||||||
$
|
.029
|
4,500,000
|
1.58
|
$
|
.029
|
4,500,000
|
||||||||||||
$
|
.029
|
3,000,000
|
3.00
|
$
|
.029
|
3,000,000
|
||||||||||||
$
|
.029
|
150,000
|
8.00
|
$
|
.029
|
150,000
|
||||||||||||
$
|
.029
|
3,000,000
|
4.00
|
$
|
.029
|
3,000,000
|
||||||||||||
$
|
.029
|
150,000
|
9.00
|
$
|
.029
|
150,000
|
||||||||||||
$
|
.029
|
3,000,000
|
4.58
|
$
|
.029
|
-
|
||||||||||||
$
|
.029
|
150,000
|
9.58
|
$
|
.029
|
-
|
2015
|
2014
|
|||||||
Provision (Benefit) at US Statutory Rate
|
$
|
240,000
|
$
|
(149,000
|
)
|
|||
Alternative Minimum Tax
|
7,500
|
-
|
||||||
Depreciation and Amortization
|
(29,000
|
)
|
(33,000
|
)
|
||||
Accrued Sales Allowance and Other Liabilities
|
(31,000
|
)
|
67,000
|
|||||
Non-Deductible Stock Based Compensation
|
32,000
|
15,000
|
||||||
Other Differences
|
51,000
|
45,000
|
||||||
Increase (Decrease) in Valuation Allowance
|
(263,000
|
)
|
55,000
|
|||||
Income Tax Provision (Benefit)
|
$
|
7,500
|
$
|
-
|
2015
|
2014
|
|||||||
Deferred tax assets:
|
||||||||
Net operating loss carryforward
|
$
|
742,000
|
$
|
1,054,000
|
||||
Intangible assets
|
395,000
|
351,000
|
||||||
Fixed assets
|
-
|
9,000
|
||||||
Valuation allowance
|
(1,084,000
|
)
|
(1,347,000
|
)
|
||||
53,000
|
67,000
|
|||||||
Deferred tax liabilities:
|
||||||||
Liabilities and reserves
|
(36,000
|
)
|
(67,000
|
)
|
||||
Inventory
|
(11,000
|
)
|
-
|
|||||
Fixed assets
|
(6,000
|
)
|
-
|
|||||
(53,000
|
)
|
(67,000
|
)
|
|||||
Net deferred tax assets and liabilities
|
$
|
-
|
$
|
-
|
2015
|
2014
|
|||||||
AC Kinetics Series A Convertible Preferred Stock
|
$
|
500,000
|
$
|
500,000
|
1 Year Capstone Companies (QB) Chart |
1 Month Capstone Companies (QB) Chart |
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