CAPSTONE COMPANIES, INC.

You should carefully consider the “Risk Factors” disclosed under “Item 1A. Risk Factors” in our 2024 Annual Report (as amended or revised by the Risk Factors set forth in this Form 10-Q reflecting the worsening financial condition of the Company in 2025). You should be aware that these risk factors and other information may not describe every risk facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

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.

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.

Except for low-cost initiatives, such as the licensing of the Connected Chef, or such as work like the development of the Proposal for customer management and registration system for Coppermine, where there is a customer advance payment for the work, the current funding of the Company under the New Note is insufficient to fund the launch and promotion of a new business line or to acquire a new business line. The Company will have to raise additional funding from third parties to fund any launch and promotion of a new business line or to fund acquisition of a new business line requiring upfront or sustained working capital.

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.

As of the date of the filing of this Form 10-Q, the Company cannot assess or predict the impact of the Trump Administration’s tariffs and changes in the imposition of those tariffs on: (1) Company’s licensing of the Connected Chef product; (2) general economic conditions that may affect the ability of the Company to obtain necessary working capital funding or the ability of Coppermine to fulfil funding obligations under the New Note; or (3) the willingness of third parties to enter into and consummate any mergers-and-acquisitions transaction or any alternative transaction with the Company. Uncertainty about tariffs and resulting disruption of normal trade relationships is likely to create the sort of economic uncertainty and conditions that are likely to be adverse to the Company’s efforts to obtain additional funding, develop or acquire a new business or business line, or consummate any alternative transactions.

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.

Item 2.