CAPSTONE COMPANIES INC

Previous wording

There is substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain further financing. Our public auditor’s report for the 2023 Annual Report stated that the Company has incurred operating losses, has incurred negative cash flows from operations and has an accumulated deficit, and these and other factors raise substantial doubt about the Company’s ability to continue as a going concern. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty.

Current wording

While the Note and MTA provided funding of essential working capital needs, there is substantial doubt about our ability to continue as a going concern if Coppermine or another source does not provide funding past March 31, 2025, of which an ongoing concern may hinder our ability to obtain further financing. Our public auditor’s report for the 2023 Annual Report stated that the Company has incurred operating losses, has incurred negative cash flows from operations and has an accumulated deficit, and these and other factors raise substantial doubt about the Company’s ability to continue as a going concern. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty.

Previous wording

If funding sources are not available or are inadequate or unwilling to fund operations, or the products at hand and under development are not capable of generating sustainable revenues in the future, we will be required to reduce operating costs even further, which could further jeopardize any future strategic initiatives and business plans. Furthermore, uncertainty concerning our ability to continue as a going concern may hinder our ability to obtain future financing. Continued operations and our ability to continue as a going concern are dependent on our ability to obtain additional funding in the near future and thereafter, and there are no assurances that such funding will be available to us at all or will be available in sufficient amounts or on reasonable terms.

Current wording

If funding sources are not available or are inadequate or unwilling to fund operations beyond funding under the Note and MTA, or any new business line is not capable of generating sustainable revenues in the future, we will be required to reduce operating costs even further from existing reductions in operating costs, which could further jeopardize any future strategic initiatives and business plans. Furthermore, uncertainty concerning our ability to continue as a going concern may hinder our ability to obtain future financing. Continued operations and our ability to continue as a going concern are dependent on our ability to obtain additional funding in the near future, whether to supplement, or provide funding after using, the funding under the Note and MTA, and thereafter, and there are no assurances that such funding will be available to us at all or will be available in sufficient amounts or on reasonable terms.

Previous wording

There may be risks that are not presently material or known and not discussed in this Form 10-Q or other SEC filings. There are also risks within the economy, the industry, and the capital markets that could materially adversely affect the Company, including those associated with an economic recession, inflation, a global economic slowdown, political instability, war, government regulation (including tax regulation), employee attraction and retention, and customers inability or refusal to pay for the products and services provided by the Company. There are also risks associated with the occurrence of extraordinary events, such as COVID-19 pandemic re-emerging due to new virus variants, terrorist attacks or natural disasters (such as tsunamis, hurricanes, tornadoes, and floods). These factors affect businesses generally, including the Company, its customers and suppliers and, as a result, are not discussed in detail below, but are applicable to the Company. As a “penny stock” without primary market maker support, and due to the decline in financial performance of the Company in 2022, 2023 and continuing into 2024, an investment in our common stock involves a very high degree of risk. You should carefully consider the risks described below, together with all of the other information included in this Form 10-Q Report and other SEC filings, before making an investment decision. If any of the following risks actually occurs or continues to impact our business, our business, financial condition or results of operations could worsen. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment. You should read the section entitled “Cautionary Statement Regarding Forward-Looking Statements above for a discussion of what types of statements are forward-looking statements, as well as the significance of such statements in the context of this Form 10-Q Report.

Current wording

There may be risks that are not presently material or known and not discussed in this Form 10-Q or other SEC filings. The Company’s status as a company with no active operations as of the date of the filing of this Form 10-Q and the doubt about the viability of the Company as a going concern creates substantial about the ability of the Company to develop or acquire a new business line or sustain operations beyond funding under the Note and MTA. There are also risks within the economy, the industry, and the capital markets that could materially adversely affect the Company’s ability to develop or acquire a new business, including those associated with an economic recession, inflation, a global economic slowdown, political instability, war, government regulation (including tax regulation), employee attraction and retention and funding working capital needs for a new business line. These factors affect businesses generally, including the Company and, as a result, are not discussed in detail, but are applicable to the Company. As a “penny stock” without primary market maker support, and due to the decline in financial performance of the Company in 2022, 2023 and continuing into 2024, an investment in our common stock involves a very high degree of risk. If any of the following risks actually occurs or continues to impact our business, our business, financial condition or results of operations could worsen. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment. You should read the section entitled “Cautionary Statement Regarding Cautionary Statement Regarding Forward-Looking Statements on page 18 above for a discussion of what types of statements are forward-looking statements, as well as the significance of such statements in the context of this Form 10-Q Report.