CAPC Shifts to Fitness Tech Amid Zero Revenue, Going Concern Doubts

TL;DR

**CAPC is a speculative bet on a pivot to fitness tech, currently generating zero revenue and relying on related-party loans to stay afloat.**

AI Summary

Capstone Companies, Inc. (CAPC) reported no revenue for the three and six months ended June 30, 2025, a significant decline from $137,818 and $143,268 in the comparable 2024 periods, respectively. The company incurred a net loss of $76,533 for Q2 2025, an improvement from a $124,010 net loss in Q2 2024, and a net loss of $187,612 for the six months ended June 30, 2025, down from $386,270 in the prior year. Operating expenses decreased substantially to $70,429 in Q2 2025 from $193,154 in Q2 2024. CAPC is actively transitioning its business focus to the health, fitness, and social activities (HFS) industry, including software development for customer registration and management, following the dormancy of its LED lighting and liquidation of Smart Mirror product lines. The Connected Chef product line has not generated any license revenue as of the filing date. The company faces substantial doubt about its ability to continue as a going concern, with negative working capital of $325,205, an accumulated deficit of $11,947,212, and a cash balance of $41,777 as of June 30, 2025. It relies on debt financing from Coppermine Ventures, LLC, which provided $361,469 of a $485,163 promissory note by June 30, 2025, to cover essential corporate maintenance expenses.

Why It Matters

This filing reveals CAPC is in a critical transition, having generated no revenue in the first half of 2025 while burning cash. For investors, the substantial doubt about its going concern status and reliance on related-party debt from Coppermine Ventures, LLC, for basic operations signals extreme risk. Employees face uncertainty given the lack of revenue-generating operations. Customers of its legacy LED and Smart Mirror products will find no support, and the new Connected Chef licensing has yet to yield sales. The competitive landscape in health, fitness, and social activities is fierce, and CAPC's entry, currently focused on software development for a related party, is highly speculative without external, unrelated funding or a proven business model.

Risk Assessment

Risk Level: high — The company reported no revenue for the three and six months ended June 30, 2025, and has negative working capital of $325,205 and an accumulated deficit of $11,947,212 as of June 30, 2025. Management explicitly states "substantial doubt about the Company's ability to continue as a going concern" due to these liquidity conditions and its inability to secure unrelated, long-term funding.

Analyst Insight

Investors should avoid CAPC given its zero revenue, significant accumulated deficit, and explicit going concern warning. The reliance on related-party debt for corporate maintenance, rather than business development, indicates a highly distressed situation. Wait for clear evidence of sustained, independent revenue generation and a solidified business model in the HFS sector before considering any investment.

Financial Highlights

debt To Equity

2.10

revenue

$0

operating Margin

N/A

total Assets

$848,842

total Debt

$575,355

net Income

$(187,612)

eps

N/A

gross Margin

N/A

cash Position

$41,777

revenue Growth

-100.0%

Revenue Breakdown

Key Numbers

• $0 — Revenues, net (For the three and six months ended June 30, 2025, a significant drop from $137,818 and $143,268 in 2024, respectively.)
• $(76,533) — Net Loss (For the three months ended June 30, 2025, an improvement from $(124,010) in Q2 2024.)
• $(187,612) — Net Loss (For the six months ended June 30, 2025, an improvement from $(386,270) in H1 2024.)
• $41,777 — Cash balance (As of June 30, 2025, indicating limited liquidity.)
• $(325,205) — Negative working capital (As of June 30, 2025, highlighting severe liquidity issues.)
• $(11,947,212) — Accumulated deficit (As of June 30, 2025, reflecting historical losses.)
• $373,686 — Notes payable related parties and accrued interest-current (As of June 30, 2025, a significant increase from $180,760 at December 31, 2024, showing reliance on related-party debt.)
• $361,469 — Proceeds from notes payable related parties (Received from Coppermine Ventures, LLC, as part of a $485,163 promissory note by June 30, 2025.)

Key Players & Entities

• CAPSTONE COMPANIES, INC. (company) — Registrant
• Coppermine Ventures, LLC (company) — Related party lender and strategic partner
• Alexander Jacobs (person) — Company's Chief Executive Officer and founder/owner of Coppermine
• Brian Rosen (person) — Non-employee director, Coppermine nominee
• Warner Session (person) — Independent director, real estate lawyer and lobbyist
• United Kingdom (company) — Location of Connected Chef Licensee
• Maryland (company) — State where Coppermine operates HFS facilities
• U.S. Securities and Exchange Commission (regulator) — Regulatory body for filing

FAQ

Risk Factors

• Going Concern Uncertainty [high — financial]: The company faces substantial doubt about its ability to continue as a going concern due to a lack of revenue, negative working capital of $325,205, and a limited cash balance of $41,777 as of June 30, 2025. Reliance on debt financing from related parties exacerbates this risk.
• Dependence on Related Party Financing [high — financial]: CAPC relies heavily on debt financing from Coppermine Ventures, LLC, which provided $361,469 of a $485,163 promissory note by June 30, 2025. This dependence creates a significant risk if such financing is not continued or is withdrawn.
• Lack of Revenue Generation [high — operational]: The company reported $0 revenue for the three and six months ended June 30, 2025, a stark contrast to the $137,818 and $143,268 in the prior year periods. This complete cessation of revenue indicates a critical operational challenge.
• Business Transition Risks [medium — operational]: The company is actively transitioning its business focus to the HFS industry, including software development. This transition involves significant execution risk, including the successful development and market adoption of new software products.
• Accumulated Deficit [high — financial]: CAPC has an accumulated deficit of $11,947,212 as of June 30, 2025, indicating a history of significant losses that have eroded equity and raise concerns about long-term viability.
• Negative Working Capital [high — financial]: The company reported negative working capital of $325,205 as of June 30, 2025. This indicates that current liabilities exceed current assets, posing a short-term liquidity challenge.

Industry Context

The company is pivoting from LED lighting and smart mirrors to the health, fitness, and social activities (HFS) industry, focusing on software for registration and management. This sector is characterized by rapid technological advancement and increasing consumer demand for integrated digital wellness solutions. However, it is also competitive, with established players and new entrants constantly innovating.

Regulatory Implications

While no specific regulatory issues are detailed in this excerpt, the company's financial distress and going concern status could attract scrutiny from regulatory bodies if not addressed. Compliance with financial reporting standards remains paramount.

What Investors Should Do

1. Monitor closely for any signs of improved revenue generation in the new HFS software segment.
2. Evaluate the terms and sustainability of related-party debt financing from Coppermine Ventures, LLC.
3. Assess the company's ability to manage operating expenses effectively during its business transition.
4. Consider the high risk associated with the 'going concern' status and the potential for bankruptcy.

Key Dates

• 2025-06-30: End of Q2 2025 — Reported $0 revenue, a net loss of $76,533, and a cash balance of $41,777. Negative working capital of $325,205 and an accumulated deficit of $11,947,212 highlight severe financial distress.
• 2025-06-30: Promissory Note from Coppermine Ventures, LLC — $361,469 of a $485,163 note was drawn, underscoring reliance on related-party debt for operational survival.
• 2024-06-30: End of Q2 2024 — Reported revenue of $137,818 and a net loss of $124,010, providing a comparative baseline for the significant decline in the current period.

Glossary

Going Concern

An accounting assumption that a company will continue to operate for the foreseeable future. If substantial doubt exists, it must be disclosed. (CAPC faces substantial doubt about its ability to continue as a going concern, indicating a high risk of insolvency.)

Working Capital

The difference between a company's current assets and current liabilities. Positive working capital indicates liquidity, while negative indicates potential short-term financial distress. (CAPC's negative working capital of $325,205 highlights its immediate liquidity challenges.)

Accumulated Deficit

The total cumulative net losses of a company since its inception that have not been offset by profits or additional paid-in capital. (CAPC's large accumulated deficit of $11,947,212 reflects a history of unprofitability.)

Related Parties

Entities or individuals that have the ability to control or significantly influence the financial or operating decisions of another entity. (CAPC's significant reliance on debt financing from Coppermine Ventures, LLC, a related party, is a key financial risk.)

Year-Over-Year Comparison

Compared to the prior year's comparable periods, CAPSTONE COMPANIES, INC. has experienced a catastrophic decline, with revenues plummeting from $137,818 (Q2 2024) to $0 (Q2 2025). While the net loss has improved from $(124,010) to $(76,533) for Q2, this is primarily due to a drastic reduction in operating expenses from $193,154 to $70,429, rather than revenue recovery. The company's financial position has worsened significantly, evidenced by negative working capital and a substantial increase in current liabilities related to notes payable to related parties.

Key Financial Figures

• $15 — Company would receive a license fee of $15 for each Connected Chef sold and receiv
• $24,000 — Application. Coppermine will pay a flat $24,000 for the assessment and production of th

Filing Documents

• capc_10q.htm (10-Q) — 629KB
• ex31_1.htm (EX-31.1) — 10KB
• ex31_2.htm (EX-31.2) — 11KB
• ex32_1.htm (EX-32.1) — 6KB
• ex32_2.htm (EX-32.2) — 6KB
• 0001903596-25-000408.txt ( ) — 3186KB
• capc-20250630.xsd (EX-101.SCH) — 20KB
• capc-20250630_cal.xml (EX-101.CAL) — 28KB
• capc-20250630_def.xml (EX-101.DEF) — 81KB
• capc-20250630_lab.xml (EX-101.LAB) — 172KB
• capc-20250630_pre.xml (EX-101.PRE) — 138KB
• capc_10q_htm.xml (XML) — 453KB

Management's Discussion and Analysis of Financial

Management's Discussion and Analysis of Financial Condition and Results of Operation 20 Item 3.

Quantitative and Qualitative Disclosures about Market

Quantitative and Qualitative Disclosures about Market Risk 32 Item 4.

Controls and Procedures

Controls and Procedures 32 PART II Other Information 33 Item 1.

Legal Proceedings

Legal Proceedings 33 Item 1A.

Risk Factors

Risk Factors 33 Item 2. Unregistered Sale of Equity Securities and Use of Proceeds 35 Item 3. Defaults of Senior Securities 35 Item 4. Mine Safety Disclosures 35 Item 5. Other Information 35 Item 6. Exhibits 35 3 CAPSTONE COMPANIES, INC., AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS June 30, December 31, 2025 2024 Assets: (Unaudited) Current Assets: Cash $ 41,777 $ 15,850 Prepaid expenses 12,415 20,455 Total Current Assets 54,192 36,305 Property and equipment, net 21,485 28,647 Goodwill 773,165 773,165 Total Assets $ 848,842 $ 838,117 Liabilities and Stockholders' Equity: Current Liabilities: Accounts payable and accrued liabilities $ 5,711 $ 300 Notes payable related parties and accrued interest-current 373,686 180,760 Total Current Liabilities 379,397 181,060 Long-Term Liabilities: Deferred tax liabilities -long-term 195,958 195,958 Total Long-Term Liabilities 195,958 195,958 Total Liabilities 575,355 377,018 Commitments and Contingencies: (Note 4) — — Stockholders' Equity: Preferred Stock, Series B-1, par value $ .0001 per share, authorized 5,000,000 shares, issued and outstanding- 767,075 shares at June 30, 2025 and December 31, 2024 (Liquidation Preference $ 767,075 ) 77 77 Preferred Stock, Series C, par value $ 1.00 per share, authorized 67 shares, issued and outstanding - 0 - shares — — Common Stock, par value $ .0001 per share, authorized 295,000,000 shares, issued 49,643,031 and outstanding 48,826,864 shares at June 30, 2025 and December 31, 2024. 4,884 4,884 Additional paid-in capital 12,335,140 12,335,140 Accumulated deficit ( 11947,212 ) ( 11,759,600 ) Less: Treasury stock, at cost ( 816,167 shares at June 30, 2025 and December 31, 2024) ( 119,402 ) ( 119,402 ) Total Stockholders' Equity 273,487 461,099 Total Liabilities and Stockholders' Equity $ 848,842 $ 838,117 See accompanying notes to these unaudited condense

View Full Filing

View this 10-Q filing on SEC EDGAR