Capstone Companies Inc (QB) (CAPC) News

very thoughtful.
...the plot thickens

They have a few options to address this.  Here are a few, but not limited to these. To make the Series B-1 Convertible Preferred Shares work for both Capstone ($CAPC) and Coppermine in a reverse merger, they would likely negotiate a conversion or restructuring deal that protects Coppermine’s control post-merger while still giving legacy Capstone stakeholders (like Stewart Wallach and Jeffrey Postal) a meaningful stake.Here’s how that might look:
1. Conversion to Common Shares at a Negotiated Ratio • Before the merger, Series B-1 holders could agree to convert their preferred shares into a reduced number of common shares, based on a fair valuation. • This avoids excessive dilution for Coppermine and allows the deal to go through cleanly. • Example: If 10M preferred shares would normally convert into 100M common shares, the holders may agree to a 10:1 conversion ratio, getting only 10M common shares instead.Benefits: • Coppermine gets majority ownership and control (e.g. 80–90%). • Series B-1 holders still retain equity in the new company, giving them upside if the deal succeeds.
2. Partial Cancellation or Buyout • Some Series B-1 shares could be canceled or bought out as part of the deal. • For example, Wallach and others could be compensated with cash, consulting agreements, or a smaller equity stake in exchange for releasing their conversion rights.Benefits: • Coppermine gets a cleaner cap table. • Legacy insiders get a defined exit or a lower-risk position.
3. Conversion Plus Role in New Entity • Wallach or Postal could convert their shares at a reduced rate and receive a board seat or advisory role in the new company, aligning interests but not interfering with control.Benefits: • Keeps continuity and honors past leadership without giving up future control. • May make the deal more acceptable to existing CAPC shareholders.
 Example Post-Merger Cap Table: • CAPC Common (existing): 50M shares • Series B-1 Converted: 10M shares (after a reduced conversion rate) • Coppermine New Issuance: 360M shares➡️ Total: 420M shares➡️ Coppermine holds ~86%➡️ CAPC + B-1 holders hold ~14%
Bottom Line:The Series B-1 shares will need to be converted or restructured in a way that preserves control for Coppermine while giving existing CAPC insiders a reasonable, minority equity stake and possibly future upside. It’s all about negotiated trade-offs between dilution, control, and value sharing.

You forgot the 50 Million when converted shares

To get voting control for Coppermine/whomever.

What is the value of an unincumbered shell?

seems like 1.5 million right now

Big trading for CAPC today!

I do think there is reason to suspect the RM has hit a snag

Zero Compensation paid in 3Q2024, 4Q2024, 1Q2025. No employees. No economic activity.

Shell, in my opinion. Regardless of Stewart's word salad.

That UK company that's supposed to be licensing the cutting board? Look them up. I did. It's a farce.

Coppermine paying Capstone to create a bespoke CRM application? Why would that make ANY business sense. Who supports the application after it's written by hired contractors? It's a farce. Why would you risk your business operations on that? Buy something off the shelf, with a full company standing behind the software, servicing the account.

Clearly, Coppermine's RM has hit a snag. Maybe the money guys decided to not invest. Maybe now is not a good time to be building more Social Fitness clubs. Who knows? But things keep getting extended. First it was 1Q2025, then 3Q2025. I see no tangible movement.

Again, the shell company issue was addressed in the most recent 10K.  “In light of the viability and continuous operation of the third party licensing program for the Connected Chef throughout 2024 and into 2025, and the Company’s concurrent operational efforts and progress in the HFS business in 2024 and into 2025, the Company has determined that it was not a public shell company during fiscal year 2024, and is not a public shell company in 2025 to the date of the filing of this Form 10-K report, under applicable SEC rules. Prior references to shell status in forward looking statements or otherwise by the Company were the result of an underestimation of the third party licensing program for the Connected Chef as an ongoing, viable continuation and replacement of the traditional”
To further address the licensing issue, the registered trademark is being addressed by the company.  I believe Wolf, who was responsible for the mishap, was replaced by Rosen and Sessions as members of the company’s new Board of Directors.  Hence, he no longer has a working capacity at the company.  Additionally, CAPC haS already entered a licensing agreement for the Connected Chef.  “ On March 21, 2025, the Company executed a License Agreement with a company (“Licensee”) based in the United Kingdom. The Licensee received a limited, exclusive, non-transferable, worldwide license to promote, market, sell, distribute, produce and manufacture Connected Chef. Under the License, the Company would receive a license fee of $15 for each Connected Chef sold and received by a buyer. Promotion, marketing and sale of the Connected Chef is subject to finalizing production arrangements with the contract manufacturer of the Connected Chef. The term of the License is 5 years plus one (1) year, post-termination extension to permit sell off of any inventory.”

https://tsdr.uspto.gov/documentviewer?caseId=sn97365117&docId=PNR20250515133237&linkId=1#docIndex=0&page=1

This is comically sad. They're trying to say no one knew they were on the clock and had to respond.

No revenue, no Sales and Marketing, no Compensation paid. But, yeah, Stewart says Capstone is NOT a shell. Smells like Shell to me.

I figure they entered Shell status when they liquidated the Mirrors in June 2024. A Shell company can remain on the OTCQB for 18 months max. That's why Stewart rewrote history. I wonder if OTCMarkets is buying it?

I agree, this is not a good look right now.  Especially with a relatively low cost item.  Even without registering the trademark, they can still license the product by product design, technology, or patent.  They also can clearly define the terms in the licensing agreement, especially regarding branding, usage, territory, and duration in any contract they do sign with a potential third party.  This is not full-proof though.

The document is posted on uspto.gov

https://tsdr.uspto.gov/documentviewer?caseId=sn97365117&docId=ABN20250514075825&linkId=1#docIndex=0&page=1

How did you get a copy of that email?

From: tmng.notices@uspto.gov
Sent: Wednesday, May 14, 2025 07:58:25 AM EDT
To: gwolf@capstoneindustries.com;swallach@capstoneindustries.com;************************
Subject: Official USPTO Notification: U.S. Trademark Application SN 97365117
OFFICIAL USPTO NOTICE OF ABANDONMENT
TRADEMARK APPLICATION ABANDONED
FAILURE TO RESPOND TIMELY TO OFFICE ACTION
U.S. Application Serial No. 97365117
Mark: CONNECTED CHEF
Owner: Capstone Industries, Inc.
Docket/Reference No. n/a
Issue date: May 14, 2025
====================
Going to be harder to license the Connected Chef product without a registered trademark.

The answers to these questions are in the 10k:
Regarding their shell status “Corporate Status. In light of the viability and continuous operation of the third party licensing program for the Connected Chef throughout 2024 and into 2025, and the Company’s concurrent operational efforts and progress in the HFS business in 2024 and into 2025, the Company has determined that it was not a public shell company during fiscal year 2024, and is not a public shell company in 2025 to the date of the filing of this Form 10-K report, under applicable SEC rules. Prior references to shell status in forward looking statements or otherwise by the Company were the result of an underestimation of the third party licensing program for the Connected Chef as an ongoing, viable continuation and replacement of the traditional”
Why didn't Stewart include CEO Jacobs and the two Coppermine selected Directors in the Annual Report on sunbiz?Not sure about Jacobs.  He wasn’t appointed till mid-December.  The other 2 guys may not be mentioned cause they were appointed in 2025 and the filing only represents 3rd quarter 2024. in the end, all 3 were mentioned in the published 10K.
With what money will CAPC hire and pay for a software programmer to complete the MOU contemplated transaction with Coppermine?“Upon and subject to acceptance of the completed Plan by Coppermine, which Plan is anticipated to be completed by May 31, 2025, the Company and Coppermine intend to enter into an application development agreement based on the Plan accepted by Coppermine (“CRM Agreement”) whereby Capstone will produce the CRM Application with assistance from a Capstone software developer contractor.Under a signed CRM Agreement, Coppermine would fund the development of the CRM Application by Capstone. The contract cost of that development will be determined as part of producing the Plan and will be set forth in the CRM Agreement”

They did not 'time' their audit.

It was required for filing the 10K on EDGAR. Same as any previous filing.

And, they were a shell, before they weren't a shell again. Why?

Why didn't Stewart include CEO Jacobs and the two Coppermine selected Directors in the Annual Report on sunbiz?

With what money will CAPC hire and pay for a software programmer to complete the MOU contemplated transaction with Coppermine?

Coppermine's extended monies don't allow for that, only keeping the corporation current with reporting requirements.

It's a mess.

You don't need to be a shell to complete a reverse merger.  Most likely filed that way to aid with their audit.  Additionally, with the Connected Chef deal it appears they are trying to liquidate all remaining assets from their balance sheets.  As far as the timing of the audit, it looks to me that they are completing theirs to coincide with Coppermine's audits to make for an easier approval process.  

Capstone no longer calls itself a Shell company

Which is a condition you need for a typical reverse merger.

CAPC just filed it's annual audit in March.

Capstone now purports to be a software company (the MOU for athletic club management software), with no software employees.

Capstone says it will license the Connected Chef IP for $15/unit, but they're about to lose their Trademark application for Connected Chef on Apr. 15th.

It's a mess.

I hoping this means CAPC and Coppermine are moving forward with their annual  financial audits so they can proceed with the reverse merger.

CFO Dana Perez filed the Management Certification for CAPC on 4/1/2025

https://www.otcmarkets.com/otcapi/company/financial-report/451250/content

Where are the Coppermine folk in all of this?

Stewart filed the Annual Report on Sunbiz on 3/24/2025

No mention of the Coppermine folks as CEO/Directors, just Wallach and Guzy.

https://search.sunbiz.org/Inquiry/CorporationSearch/GetDocument?aggregateId=domp-p04000056287-375ba949-ab09-4802-a376-d8f31a994b74&transactionId=p04000056287-d04662ed-9670-4221-a674-ca61d2ec5faf&formatType=PDF

DEERFIELD BEACH, Fla.--(BUSINESS WIRE)--Capstone Companies, Inc. (OTCQB: CAPC) announced today that Capstone and Coppermine Ventures, LLC, a private Maryland company that operates year-round health, fitness and social activities facilities (“Facilities”) in the State of Maryland, entered into a Memorandum of Understanding (“MOU”) stating their intent to produce a plan for development of an online customer registration and management application (Application) by Capstone for Coppermine organization’s 20 Facilities. The development of the Application is subject to acceptance of the Plan, signing of a definitive application development agreement with Capstone and funding of development fees and costs by Coppermine. The companies expect the completion of the Plan by May 31, 2025, and hope to implement a CRM Application in 2025.“The Memorandum of Understanding (MOU) is another step forward in the health, fitness and social activities business (HFS business) by Capstone and in its relationship with Coppermine. Besides improving Coppermine’s operations, a functioning Application could potentially be licensed by Capstone to third party operators in the health, fitness and social activities industry as well as be used in any future HFS business facilities developed or acquired by our company,” said Stewart Wallach, Capstone’s Chairman of the Board of Directors.Coppermine has provided working capital funding for Capstone’s basic corporate maintenance overhead through the third fiscal quarter of 2025 and Coppermine’s founder, owner and manager is Alexander Jacobs, who is also Capstone’s Chief Executive Officer and a director.About Capstone. Capstone is engaged in the development of HFS business and licensing of its Connected Chef smart device.About Coppermine. Coppermine is the managing company for a HFS business that operates 20 HFS business facilities in State of Maryland that annually services estimated 35,000 customers. Coppermine’s offerings include pickle ball, padel, field sports (e.g. soccer, football, lacrosse), basketball, and swimming as well as food-drink gardens or sports bars and live entertainment.

I'm not expecting the reverse merger till 3rd quarter, but what are the odds we get an update at the end of Q1?

It's 90 days to sell once the Restricted Legend is temporarily removed. It's because CAPC was once a shell company, I believe.

The 22 million still Restricted are most likely insider's shares.

hmm. interesting. So it's saying there are about ~22M shares still restricted. So some of those could be shares that were once unrestricted and then moved back to restricted because they weren't sold in a certain period? Is there anyway to tell how many of those 22M shares restricted could still come to the market?

How do you know the length of time allowed to sell unrestricted shares? Couldn't find that anywhere.

And thanks for the securities lesson

OTC Markets has a breakdown between Restricted and Unrestricted stock

2.5 million shares were added to the Restricted count in April 2021 when the private placement occurred. As the shares were un-restricted for sale, they moved over to the Unrestricted count (decrement Restricted, increment Unrestricted).

It's important to note that the removal of the Restricted Legend on the shares is a temporary situation. The shares need to be sold into the market, or they re-restrict after period of time.

This is interesting information.

How do you track when the restricted stock is sold? Is this disclosed somewhere?

The last 500+K restricted shares from the 2021 private placement were finally unrestricted.

2.5 million shares were sold for 60 cents per share. About 2 million shares were unrestricted and sold since 2021. Should be done now.

They probably hit the market on Feb. 7th, the 3M volume day. The holders of the restricted stock have a limited amount of time to sell before they re-restrict.

You can say what you want about Stewart Wallach, but he wants this to succeed more than anyone and he's never purposely screwed over investors.  People forget he put in almost an additional $1 million of his own money when the company should've declared bankruptcy to keep this thing on life support.  He's also the biggest shareholder so he had skin in the game.  If he's to recoup any of the money he put into CAPC, this reverse merger has to materialize. This will happen!  Everything is lining up!  I just don't foresee it completing till the 3rd quarter per the most recent PR.

Wallach led the charge to keep CAPC on the OTCQB

https://www.sec.gov/Archives/edgar/data/814926/000190359625000069/xslF345X05/ownership.xml
https://www.sec.gov/Archives/edgar/data/814926/000190359625000070/xslF345X05/ownership.xml

CAPC faced being kicked to the Pinks for Bid price deficiency. Some timely buying by Wallach, starting in September 2024 lifted the stock back to a penny+. It seems clear that Coppermine desires an OTCQB shell.

I'm not entirely sure why these purchases weren't reported on Form 4 as they occurred.

Edit: Ahh, $10,000 worth or less, in a 6 month period, is eligible for reporting on Form 5, due within 45 days of the end of the fiscal year.

3 million in volume in one day...at least people are watching!  Wow!  I expect a bit of ride going into 3rd quarter.  I know we all feel the underlying excitement brewing...it's coming!

Great post, I fully agree, needs sticky note.

Thanks for sharing.

After that recent news time is one of the factors before a merger with them takes place.

I added more today in the .03 range!

Adding huge !!!

After reading the 8k's, I'm 100% confident the reverse merger will take place.  Based on yesterday's PR, I just don't see it happening till later this year...hence, the extension.  Jacobs had no incentive to increase the funding and to extend the deadline through Q3 unless he plans to follow through.  Remember, many time consuming things must happen first.  He owns multiple companies.  He probably has to decide how many, if not will all of them be rolled over.  Documents and proxy statements must be submitted to the SEC, company must remain current with SEC, companies on both sides of the merger need 2 years of financial audits, etc.  As far a shell companies come, CAPC is as good as it gets.  Low share structure, debt cleaned up, ex-CEO is largest shareholder so he has skin in the game. and all SEC filings are current with the OTCQB. This will be a huge success and has potential to be a huge regional or national fitness chain.  So yes...third time is the charm!

Can lighting strike three times?

1) Generators-roof tiles for China (right after hurricane Andrew I believe) $
2) Hype...mirror launch (meme stock) $$$
3) Merger with a real company ???

Let's see this one play out.

Fortunate that I actively traded this during all three events.

Third Time a Charm?

Yeah...the new CEO, Jacobs, is throwing a ton of cash in this to keep the shell current.  My guess is they are working on getting everything inline for the SEC such as 2 years of audited financials.  They are definitely showing their hand.  They will complete the reverse merger.  The already stated the new product line is their current product line, the new board members are strategic picks to aid in their expansion to other states and they are funding the company to keep it current.  This is a no brainer.  Just wish it was complete already.

Nice thoughts, I like the potential here. I have been holding a while 1000% up

With much recent news has been getting accumulated slowly moving upward with potential. Nice charts and technicals and ss.

Another low floater I have too holding since bottom is $nich

What would you like to see or hear from the company right now?

I guess the issue is, there isn't really a company right now. There's a shell (CAPC), and there's a group that desires to reverse merge into that shell (Coppermine, et al).

The final chapter on Capstone Companies, Inc (CAPC) will be written in the 10K. Outstanding issues to resolve: writing off the plastic molds for the Connected Chef, carried on the balance sheet as a capital asset (about $40K), and settling the Mouhaned Khoury loan ($200K plus interest, in Default).

The reverse merger, if it happens, is in 1Q2025, and will be announced if/when it happens. For it to happen, Coppermine investors have to buy a controlling interest in CAPC. To do that, in my opinion, they'll buy the B-1 shares from Wallach, Postal, Wolf, and Fleisig. That will give them control of 50 million when-converted shares, a bit over 50% of the fully diluted O/S.

What Coppermine does with the company and the share structure will be evident after the reverse merger happens.

General question:


What would you like to see or hear from the company right now?

Truthfully, that's what I'm looking at in the long game.  I see a reverse merger, expansion across multiple states as planned, uplisting to the Nasdaq and then being bought out by Lifetime or another national chain.

If Coppermine does a reverse merger into this, the closest publicly traded company analogy I can find would be Life Time Group (LTH) which has 177 fitness centers and a market cap of $5.9B. Divide that by 177 and you get about $33M per center.

Not saying that Coppermine centers are anywhere as good, or generate the same level of revenue as LTH (I've never seen one), but a 1-1 comparison would value the company at $627M (with the current 19 centers). Even if they were valued at half of LTH centers it would put this company at $313M.

That's like 100x from here.... or 50x fully diluted.

Brian Rosen, Commercial Strategy Senior Executive, Appointed as Director of Capstone Companies, Inc.
Capstone Companies, Inc. (OTCQB: CAPC) announced today the appointment of Brian Rosen as a non-employee director, effective January 20, 2025.Mr. Rosen has extensive experience in marketing, business development, contract negotiation and government relations as well as experience as a member of two public companies’ management. He served as Senior Vice President, Global Market Access, Public Policy & Alliances (2021 - 2023), Senior Vice President, Commercial Strategy (2018 - 2021) and Vice President, Market Access, Policy, & Government Affairs (2015 - 2017) with Novavax, Inc. (NASDAQ: NVAX). Before Novavax, Inc., Mr. Rosen served as Chief Policy, Advocacy & Patient Services Officer (2014 - 2015), Senior Vice President, Public Policy (2013 - 2014) and Vice President, Legislative and Regulatory Affairs (2012 - 2013) for the Leukemia & Lymphoma Society,Washington, D.C. He also has a J.D. degree from Hofstra University School of Law.“Brian is skilled at pursuing new business opportunities and developing resulting revenue streams and in negotiating contracts. He has a record of accomplishment in the pursuit of revenue generating opportunities. I believe his skills, coupled with government relations and public company experience, will prove valuable to Capstone Companies’ efforts to establish a new business line and pursue a growth strategy for year-round social, fitness and health programs and facilities,” said Stewart Wallach, Chair of the Company’s Board of Directors.

My guess is they'll get a dollar per preferred B-1 share

(the liquidation preference) when they sell the controlling block to Coppermine principals. That will be the change of control that Coppermine needs to follow through with the reverse merger.

Ah, ok. That makes more sense.

You're right. Made a typo… it was $3.6M (but it still comes to $4.88/share).

By 'Par', I meant the $1 liquidation preference value.

Perhaps 'par' was the wrong term.

The shares are 'locked-up', except for certain conditions. A sale in a reverse-merger would be one of those conditions.

The debt forgiven was $3,665,303.

huh? Why would the current holders of the B1 shares sell at par (.0001)? They just forgave $6.6M in debt for them (~4.88 per share).

Also there is a 1 year lock up for transfer and conversion of the B1 shares.

Preferred B1 shares don’t have voting power

They convert into 50 million common shares. Not coincidentally representing a bit over half of the fully diluted OS, for voting control of the shell.

The holders of the Preferred B-1 will sell to Coppermine principals, or Coppermine will walk away, my opinion. It's the best deal the debt holders could get. The alternative is all shares are worthless in a defunct company.

Most likely scenario is for Alexander Jacobs to have the company issue shares to purchase his Coppermine company. He owns 19 sports facilities
“ As CEO, Mr. Jacobs will focus on developing a new business line and revenue generating operations for the Company by internal development, mergers or acquisitions, strategic or joint venture relations”