CAPSTONE COMPANIES, INC.

Previous wording

The Company has insufficient revenues to support its basic operating overhead and relies on funding from a director and senior officer to pay basic operating overhead. The Company may be unable to sustain operations through 2024 without continued financial support from the directors and senior officer or investment or funding from a third party. There can be no assurance that the Company can obtain sufficient funding from current funding sources or any new funding sources to sustain operations through 2024. The financial difficulties of the Company severely hamper the pursuit of Connected Surface products and any new business lines and new products.

Current wording

The Company has insufficient revenues to support its basic operating overhead and relies on funding from Coppermine under an amended promissory note to meet basic operating and overhead for the first three fiscal quarters of 2025. The Company may be unable to sustain operations through 2025 without continued financial support from the third-party funding sources, either debt or equity. In 2024, the Company received financial support from a senior officer and director, but the Company does not believe (based on discussions with the director and senior officer) that any financial support from personal funds by the senior officer or director will be forthcoming in any amount or in any significant amount. There can be no assurance that the Company can obtain sufficient funding from current funding sources or any new funding sources to sustain operations through 2025. The financial difficulties of the Company severely hamper efforts to launch, sustain or otherwise commercially exploit any new business lines and new products, or to attract potential acquisition candidates or candidates for other alternative transactions.

Previous 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.

Current wording

While the New 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 September 30, 2025. The ongoing concern may hinder our ability to obtain further financing or engage in alternative transactions. Our public auditor’s report for the 2024 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 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.

Current wording

If funding sources are not available or are inadequate or unwilling to fund operations beyond funding under the New Note and MTA, or any new developed or acquired 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 New 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. The lack of sufficient working capital also hinders or undermines Company’s efforts to develop, launch and sustain any new business line, or to acquire a new business or new business line.

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. 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.

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 of the Company. The Company’s status as a company without sustained revenue generating 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 New 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 2023, 2024 and continuing into 2025, 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.