Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

This discussion should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's 2024 Annual Report.

Cautionary Statement Regarding Forward-Looking Statements

This Form 10-Q Report contains forward-looking statements that are contained principally in the sections describing our business as well as in "Risk Factors, and in "Management's Discussion and Analysis of Financial Condition and Results of Operations". These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance, or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. All statements other than statements of historical facts contained, or incorporated by reference, in this Form 10-Q Report, including, without limitation, those regarding our business strategy, business development efforts, financial position, results of operations, plans, prospects, actions taken or strategies being considered with respect to our liquidity position, valuation and appraisals of our assets and objectives of management for future operations, our ability to weather the impacts of the any pandemic or similar event, financing opportunities, and future cost mitigation and cash conservation efforts and efforts to reduce operating expenses and capital expenditures are forward-looking statements. These risks and uncertainties include, but are not limited to, the factors described in the section captioned "Risk Factors" in our latest 2024 Annual Report. In some cases, you can identify forward-looking statements by terms such as "anticipates, "believes, "could, "estimates, "expects, "intends, "may, "plans, "potential, "predicts, "projects, "should, "would and similar expressions (including the negative and variants of such words). Forward-looking statements reflect our current views with respect to future events and are based on assumptions and are subject to various risks and uncertainties. Given these uncertainties, a reader of this Form 10-Q Report should not place undue reliance on these forward-looking statements. The forward-looking statements contained in this Form 10-Q Report are made as of the date of filing this Form 10-Q Report. You should not rely upon forward-looking statements as predictions of future events. The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law. Examples of these risks, uncertainties and other factors include, but are not limited, to the impact of:

· Company has no product line or operations generating sufficient revenues to sustain corporate operating overhead and has relied on loans or advances from related parties to sustain basic executive operations, which funding is not assured to fund those operations past the third fiscal quarter of 2025. If Company cannot find outside funding to develop and promote a new product line or acquire a new business line in fiscal 2025, Company may lack sufficient funds to sustain operations in 2026.

· Company needs to find third party funding to fund the development, marketing and acquisition of any new product line or business. Since the Company lacks hard assets suitable for asset financing, has revenue generating operations that are not currently producing sufficient or any revenues to sustain operations into 2026, and has significant debts, and as the Common Stock has a low market price and limited liquidity, third party funding may not be available to produce and promote a new product line or acquire a new business or to sustain operations into 2026.

· Company may be unable to acquire a new business line or acquire a new business line that is able to fund the overhead necessary to maintain the Company as a public company into 2026.

· The financial condition of the Company raises a substantial doubt about the Company's ability to continue as a going concern.

· The debt obligations, if not resolved or restructured, may pose a hinderance to developing a profitable new product line or acquisition of a new business line, or sustaining operations into 2026. The Company is uncertain about whether it could restructure or resolve its debt obligations, whether in connection with business development or otherwise.

· The Company may be unable to restructure or resolve all or most of its debt obligations in any transaction for acquisition of a new business or business line, or to fund production and promotion of any new product line.

· Other risk factors are stated in Item 1A of Company's 2024 Annual Report.

It is not possible to predict or identify all such risks. There may be additional risks that we consider immaterial, or which are unknown as of the date of the filing of this Form 10-Q.

Risk Factors affecting Efforts to Develop or Acquire a New Business Line

The challenge facing the Company is to acquire a new business line, or to establish a new profitable product line, whether the licensing of the Connected Chef or another product line, before the cost of marketing and penetrating a new product market company impose unsustainable financial burdens and losses on the Company. There are no assurances that the new management members will result in the development of a new business line for the Company or will enhance the ability or capabilities of the Company's management to develop or acquire a new business line for the Company. The funding under the New Note and the financial support of essential corporate overhead expenses of the Company under the MTA, if provided in accordance with the MTA, will allow the Company to continue efforts to develop a new business line in 2025. Funding from Coppermine under the New Note and MTA is the sole source of working capital funding for the Company as of the date of the filing of this Form 10-Q. Additional funding from Coppermine is uncertain and there is no assurances of any additional funding from Coppermine or any other funding sources.

No assurances can be given that any new management members or funding by Coppermine will in fact result in a new business line for the Company or cover all future operating expenses of the Company for fourth fiscal quarter of 2025 or into 2026. The financial commitment under the New Note extends only through the third fiscal quarter of 2025 and, if Coppermine does not provide additional funding after the third fiscal quarter of 2025, or the Company does not develop revenue generating operations producing sufficient working capital prior to the end of the third fiscal quarter of 2025, then the Company will need to obtain a new source of working capital funding for operating expenses after the third fiscal quarter of 2025 in order to sustain operations and efforts to develop a new business line, unless the Connected Chef licensing arrangement or software development for Coppermine generates sufficient working capital in the second half of fiscal 2025. The Company does not have an alternative source of working capital funding to funding by Coppermine as of the date of the filing of this Form 10-Q and is uncertain about whether it can obtain any alternative funding.

Even if the Company locates a new business or business line to develop or acquire, the Company may lack the funding necessary to consummate the development or acquisition of a new business line or to sustain that business line. Further, the low market price and liquidity of the Company's Common Stock, the Company's status as a 'penny stock company' under SEC rules, the status of the Company as a company without operations producing sustain, sufficient or any revenues to fund overhead as of the date of the filing of this Form 10-Q, and the costs of and regulatory requirements for consummating an acquisition with another company or for a new business and the limited working capital funding available to the Company are factors adversely affecting the Company's ability to develop or acquire a new business line. The Company requires adequate, affordable and timely funding to acquire and operate a new business line or business with revenue-generating operations and such funding may not be available to the Company.

The Company lacks sufficient operating history for its licensing arrangement for the Connected Chef to determine or predict the impact of U.S. Government's 2025 policies and actions in respect of tariffs.Under the licensing arrangement, both the licensor and proposed OEM are located outside of the U.S.

As an ongoing strategic plan, the Company intends to develop or acquire a new business line that is not involved in the production of consumer products that are discretionary purchases for consumers, which was the Company's prior business line. The shift in focus is due to the low profit margins typically provided by those consumer products; the funding needed for developing, producing, warehousing and marketing those consumer products; the Company's lack of an effective e-commerce operation and reliance on bulk orders by a limited number of retailers for those consumer products; and vulnerability of those consumer products to changing consumer preferences and retailers' buying preferences.

General Risk Factors for Investment in Company's Common Stock.

The Company is a "penny stock" company under Commission rules and the public stock market price for our common stock is impacted by the lack of significant institutional investor and any primary market maker support. Investment in our common stock is highly risky and should only be considered by investors who can afford to lose their investment and do not require on demand liquidity. Potential investors should carefully consider risk factors in our SEC filings. The Company's common stock lacks the primary market maker and institutional investor support to protect the public market from being unpredictable and volatile. Investors may not have liquidity or desired liquidity in our common stock as an investment. With the lack of any revenues and revenue generating operations, and doubt as a going concern, any investment in the Company's common stock is highly risky.

The above risk factors are not exhaustive and new risks may emerge from time to time. Such forward-looking statements are based on our current beliefs, assumptions, expectations, estimates and projections regarding our present and future business strategies and the environment in which we expect to operate in the future. These forward-looking statements speak only as of the date made. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in our expectations with regard thereto or any change of events, conditions, or circumstances on which any such statement was based, except as required by law.

Overview of Our Business

Capstone Companies, Inc. ("Company" or "CAPC") is organized under the laws of the State of Florida. The Company has been a designer, manufacturer and marketer of consumer inspired products that simplify daily living through technology, including the Connected Chef. Since 2024, the Company has adopted a new strategic focus to develop a HFS Business or a business related to HFS Business (defined below in Health, Fitness and Social Activities Business). Outside of the licensing of the Connected Chef, the Company is not engaged in the consumer product business as of the date of filing of this Form 10-Q. Over the past decade, the Company's various product lines have been distributed globally including consumer markets in Australia, Japan, Korea, North America, South America, and the United Kingdom. The primary operating subsidiary was Capstone Industries, Inc. ("CAPI"), a Florida corporation located at the principal executive offices of the Company. Capstone International Hong Kong, Ltd., or "CIHK", was established to expand the Company's product development, engineering, and factory resource capabilities. With the 2021 shift of manufacturing to Thailand from China, the CIHK operation was dormant as of the first fiscal quarter of 2025, the Company's business operations are conducted by the Company and not CAPI.

LED Lighting Product Line. Historically, LED lighting products were the Company's core consumer product business. The Capstone Lighting and Hoover Home LED brands, combined, sold millions of LED lighting products, but by 2023 the LED lighting products had matured and ceased to garner sufficient orders to maintain production. The impact of tariffs also adversely impacted the commercial viability of the LED lighting products. The Company switched its business focus to its Connected Surface products as a replacement product line. The first Connected Surface product was the Smart Mirror, but the Company's Smart Mirror product line did not achieve sustainable sales to allow the continued production and promotion of the Smart Mirror products beyond fiscal year 2023. As a replacement for the Smart Mirror product line, the Company pursued commercialization of the Connected Chef, as a product under the Connected Surfaces initiative, which initiative sought to develop Internet-connected, "smart" consumer products. As of the date of the filing of this Form 10-Q, the Connected Chef licensing arrangement described in the following paragraph has been the only commercialization of the Connected Chef.

Connected Chef Product Line. During 2023, the Company developed the Connected Chef ("Connected Chef"), a purpose-built kitchen tablet with an accessory platform to accommodate food prep accessories such as a cutting board. The Connected Chef has Google mobile service allowing for pre-installation of specific Google applications including Playstore, voice assistant, and YouTube. The ability of the Company to promote any new, related "connected" consumer products was dependent on securing adequate, affordable and timely funding from lenders and investors, which the Company was unsuccessful in obtaining over the last few years. 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. As of the date of this Form 10-Q filing, there have been no sales of the Connected Chef and no license revenue generated for the

Health, Fitness and Social Activities Business. During 2024, the Company commenced its business development of a business line or software development project focused on year-round health, fitness and social activities (this business line being referred to as "HFS" or "HFS business"). Due to the popularity of sports like pickle ball and flag football, health, fitness and social activities at dedicated facilities are being developed nationwide. Pickle ball has been the fastest growing sport in America since 2021 and its popularity is based in large part in that it can be played by all fitness active demographics groups (e.g. children, adults and elders (since it does not require the skills and athleticism of tennis or other physically demanding sports)) and can be played as a recreational or competitive amateur/collegiate and professional sport. Professional pickle ball is increasingly popular sports entertainment. A typical HFS facility offers sports like indoor and outdoor pickle ball, padel and often another recreational sport or sports (e.g. martial arts, swimming, basketball, racquetball, tennis) with a food-drink-entertainment area. Some HFS facilities add field sports like soccer, lacrosse, and football (traditional and flag) in order to host tournaments, local school competitions, or recreational league play. The HFS facilities typically seek individual, family and group memberships charging periodic fees as well as additional fees for special offerings or events. Special events consist of children summer camps, birthday parties, corporate employee outings, or corporate sponsor events promoting their specific products (e.g. drinks, cooler products, drink ware, sporting equipment, apparel) through branding which may be performed in house by the HFS facility.

As part of business development efforts for the proposed HFS business, on March 13, 2025, the Company entered into a Memorandum of Understanding ("MOU") with Coppermine whereby the Company will produce a development plan ("Plan") for an online customer registration and management application ("CRM Application") for Coppermine's owned, affiliated or managed HFS business facilities in the State of Maryland ("Facilities"). These Facilities currently lack an integrated, single customer registration and management application. On May 13, 2025, the Company and Coppermine signed an agreement whereby Capstone will make an assessment and, based on that assessment, produce a written plan and proposal ("Proposal") for the development, testing and installation of an online customer management and registration application ("Application") for Coppermine's year-round social, athletic, and fitness programs and events conducted at twenty (20) facilities in the State of Maryland ("Sites"). This Agreement covers only the assessment and production of the Proposal. If the Proposal is accepted by Coppermine, then the two companies would seek to negotiate a written agreement for the actual development, testing, installation and support of the Application. Coppermine will pay a flat Twenty-Four Thousand Dollars and No Cents ($24,000) for the assessment and production of the Proposal. If the Company develops the Application, then the Company would explore possible commercialization of the Application through licensing of the Application to other providers of social, athletic, and fitness programs and events in the United States, subject to the terms and conditions of any written agreement for the actual development, testing, installation and support of the Application for Coppermine. As of the date of this Form 10-Q filing, there is no written agreement for the development, testing and support of the application.

Liquidity and Going Concern

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.

For the six months ended June 30, 2025 and 2024, the Company reported a $143,268 decrease in net revenue from $143,268 in 2024 to $0 in 2025. The decrease in revenue is due to a liquidation sale of the Smart Mirrors for $80,000 during the second quarter of 2024 while the Company does not currently have an operating product line. The net loss for the six months ended June 30, 2025 was $187,612 as compared to $386,270 in 2024. During the six months ended June 30, 2025 and 2024 the Company used cash in operating activities of approximately $156,600 in 2025 and $109,800 in 2024. The increase in net cash used in operations primarily relates to a decrease in accounts payable and accrued expenses as a result of the New Note working capital funding received in the fourth quarter of 2024 with installments received through June 30, 2025.

As of June 30, 2025, the Company has negative working capital of $325,205 and an accumulated deficit of $11,947,212. The Company's cash balance increased by approximately $26,000 from $16,000 as of December 31, 2024 to $42,000 as of June 30, 2025. These conditions raise substantial doubt about the Company's ability to continue as a going concern.

The Company is actively seeking alternative sources of liquidity, including but not limited to accessing the capital markets, strategic partnerships, or other alternative financing measures, but has been unable to secure unrelated, long-term funding or secure other sources of liquidity. As stated, Company's low market price for its common stock and poor financial condition and performance hinder these efforts.

Besides the license of the Connected Chef kitchen appliance product, the Company is seeking to establish revenue generating operations in the HFS business by internal development of HFS operations or acquiring or being acquired by an existing, operating HFS company. Management is closely monitoring its operations, liquidity, and capital resources and is actively working to minimize the current and future impact of this unprecedented situation.

The Company reviews alternatives to its current business approach, including, without limitation, sale of the public company or merger of the Company with a private operating company and other common strategic alternatives to a company facing business and financial challenges and uncertainties such as ours. Management is closely monitoring its operations, liquidity, and capital resources and is actively working to minimize the current and future impact of this unprecedented situation.

Our Current Strategy

The strategic focus of the Company's business operations in 2025 are the pursuit of the HFS Business and related apparel and logo branding business of the HFS industry, development of a customer registration and management application ("CRM Application") for the HFS industry, and the third-party licensing of the Connected Chef. The long-term business strategy of the Company is focused on the HFS Business (including the apparel and logo branding business) and development of the CRM application and potential licensing to other HFS businesses, with the third-party licensing of the Connected Chef as a secondary business. The Company has expanded the scope of its HFS business strategy in the first half of 2025 due to perceived opportunities in that segment of the HFS industry. The implementation of the long-term business strategy will depend on having adequate working capital until revenue flow from operations replaces third party funding as the principal means of funding overhead. We have third party funding for basic operational overhead through the third fiscal quarter of 2025. We may be unable to achieve sufficient working capital when and, in the amounts, required to meet operational overhead beyond three fiscal quarters of 2025.

In terms of any pursuit of the apparel and logo branding business of the HFS industry, the Company is seeking to penetrate an industry that is perceived by the Company as rapidly expanding nationwide with many existing and new companies that have established operations and brand recognition. The HFS industry also has emerging regional or potentially national HFS chains and franchises. The Company may be unable to establish a competitive, sustainable apparel and logo branding business in the face of a rapidly growing industry with competitors who have established operations, greater funding than the Company and established brand recognition. The Company needs to raise sufficient working capital to acquire an existing HFS operation or establish an HFS operation that has offerings that appeal to a broad demographic range of customers. The Company believes that a competitive edge in HFS industry is offerings that appeal to a broad demographic group (children, families and adults) as opposed to offerings that are primarily aimed at appealing to adults seeking pickle ball courts with a sport bar or social activities environment.

With a third-party licensing consumer product, the Connected Chef, the Company competes in competitive consumer market channels that can be affected by volatility from a number of general business and economic factors such as, consumer confidence and preferences, employment levels, new technologies, credit availability, costs and barriers of producing products from foreign original equipment manufacturers ("OEMs") and commodity costs. Demand for the consumer products like the Connected Chef is highly dependent on economic drivers such as consumer spending and discretionary income. Technological changes can also undermine the appeal of devices like the Connected Chef. Consumers can opt to use a smart cell phone, tablet or laptop for Internet access for recipes and kitchen arts instead of using a dedicated device like the Connected Chef. Further, Amazon.com offers the Echo Show 21-inch kitchen hub with built-in Fire TV and Alexa functions. While the Echo Show is not focused on recipes and kitchen arts like the Connected Chef, being more a general smart TV with Internet connection for the kitchen, it is still potentially competitive to the Connected Chef. The purported market appeal of the Connected Chef is that it's tailored to kitchen use for recipes and kitchen arts and designed to withstand the conditions of a kitchen, which is not the case for smart cell phones, tablets and laptops. The Connected Chef is counting on consumers preferring a dedicated kitchen device rather than using and risking damage to devices primarily designed and used for other functions and uses.

As is true for any consumer product company, the Company faces competition from numerous competitors in the consumer product industry, foreign and domestic, and some of those competitors have substantially greater market share, brand recognition, distribution and financial and technical resources than the Company. The Company's strategy has been to develop well designed and well-made products that appeal to a niche market. The Company also relies on the production and engineering resources and technical expertise of its contract manufacturers to compensate for a lack of those resources internally. The lack of working capital hinders the ability of the Company to leverage the development, design and production capabilities of OEMs.

Due to working capital constraints, the Company's focus for the Connected Chef is licensing of the promotion, marketing, production and sales/distribution to third parties. A typical arrangement would be a distributor or product company licensing the right to promote, market, distribute and sell the Connected Chef, which would be ordered from a Company's authorized contract manufacturer. The Company would be merely the licensor and would not be required to fund or handle the promotion, marketing, production, distribution and sale of the product. The Company is exploring such an arrangement with a limited number of prospective distributors.

Sales and Marketing of Consumer Product Line

As a consumer product company in fiscal years prior to 2025, we used direct sales by our former Chief Executive Officer and sales agents to sell our consumer products, which effort included direct sales aimed to Big Box and home-goods chain retailers. There were no sales during the first quarter of 2025.

The Company has historically promoted its products to retailers and distributors at North American trade shows, such as the Consumer Electronics Show ("CES") or the International Hardware Show but also relied on the retail sales channels to advertise its products directly to the end user consumers through various promotional activities. With the License, promotion of the Connected Chef will be conducted by the licensee.

In the six months ended June 30, 2025, the Company had no major customers.

When we promoted the Connected Surface Smart Mirrors, we utilized social media platforms and online advertising campaigns to further grow the Company's online presence. In addition to Facebook, Instagram, Pinterest and LinkedIn, The Company has launched a You Tube channel to host Smart Mirror videos and established a X account. Our Social Media marketing did not result in any significant sales of products. We were not able to effectively compete in e-commerce and Social Media marketing and sales. The Company has a Social Media presence on the following Social Media platforms; however, the Company is not emphasizing Social Media marketing in 2024 due lack of results and lack of funding to pursue active Social Media marketing. As of the filing of this Form 10-Q, the Company has not used Social Media marketing for its business development initiatives. The Company's Social Media accounts are:

FACEBOOK¹: https://www.facebook.com/capstoneindustries and https://www.facebook.com/capstoneconnected

INSTAGRAM²: https://www.instagram.com/capstoneconnected

PINTEREST³: https://www.pinterest.com/capstoneconnected/

X^{4 :} https://x.com/CAPC_Capstone

YOUTUBE5^{5 :} https://www.youtube.com/channel/UCMX5W8PV0Q59qoAdMxKcAig

¹ Facebook is a registered trademark of Facebook, Inc.

² Instagram is a registered trademark of Instagram.

³ Pinterest is a registered trademark of Pinterest.

⁴ X is a registered trademark of X Corp.

⁵YouTube is a registered trademark of YouTube Corporation.

Research, Product Development, and Manufacturing Activities

The Company did not engage in research, product development or manufacturing during the period ended June 30, 2025.

Information Technology

The efficient operation of our corporate activities is dependent on our information technology systems. We rely on those systems to manage our daily operations and maintain our financial and accounting records. When the Company was making and selling consumer products, and in the normal course of business, we received information regarding customers, associates, and vendors. Since we do not collect significant amounts of valuable personal data or sensitive business data from others, our internal computer systems are under a light to moderate level of risk from hackers or other individuals with malicious intent to gain unauthorized access to our computer systems. Cyberattacks are growing in number and sophistication and are an ongoing threat to business computer systems, which are used to operate the business on a day-to-day basis. Our computer systems could be vulnerable to security breaches, computer viruses, or other events. The failure of our information technology systems, our inability to successfully maintain our information or any compromise of the integrity or security of the data we generate from our systems or an event resulting in the unauthorized disclosure of confidential information or degradation of services provided by critical business systems, whether by us directly or our third-party service providers, could adversely affect our business operations, sales, reputation with current and potential customers, associates or vendors, results of operations, product development and make us unable or limit our ability to respond to customers' demands.

We have incorporated into our data network various on and off-site data backup processes which should allow us to mitigate any data loss events, however our information technology systems are vulnerable to damage or interruption from:

●	hurricanes, fire, flood and other natural disasters
●	power outage
●	internet, computer system, telecommunications or data network failure Hacking as well as malware, computer viruses, ransomware and similar malicious software code
●	Cybersecurity. The Company did not experience any cybersecurity incidents for the six months ended June 30, 2025.

Environmental Regulations

We believe that the Company is in compliance with environmental protection laws and regulations and that these laws and regulations will not have a material impact on our financial position and results of operations.

Critical Accounting Policies

We believe that there have been no significant changes to our critical accounting policies during the six months ended June 30, 2025, as compared to those we disclosed in Management's Discussion and Analysis of Financial Condition and Results of Operations included in our 2024 Annual Report.

CONSOLIDATED OVERVIEW OF RESULTS OF OPERATIONS

Results of operations.

Net Revenues

The Company does not have a product line that is generating revenues as of the date of the filing of this Form 10-Q.

Cost of Goods Sold

With respect to the Connected Surface product line, our cost of goods sold consisted primarily of purchased products from contract manufacturers and when applicable associated duties and inbound freight.

Gross Profit

Our gross profit was affected by a variety of factors, including average sales price for our products, product mix, promotional allowances, our ability to reduce product costs and fluctuations in the cost of our purchased components.

Operating Expenses

Operating expenses include sales and marketing expenses, advertising expense and costs related to employee's compensation. In addition, operating expense include charges relating to product development, office and warehousing, accounting, legal, and insurance.

CONSOLIDATED RESULTS OF OPERATIONS AND OUTLOOK

Three Months Ended June 30, 2025, Compared to Three Months Ended June 30, 2024
(In Thousands)
		June 30, 2025								June 30, 2024
		Dollars				% of Revenue				Dollars				% of Revenue
Revenues, net		$	-				-	%		$	138				100	%
Cost of sales			-				-	%			38				27	%
Gross Profit			-				-	%			100				63	%
Total Operating Expenses			70				-	%			193				302	%
Operating Loss			(70	)			-	%			(93	)			(228	)%
Total Other Income (Expense)			(6	)			-	%			(30	)			(41	)%
Loss Before Tax Benefit			(76	)			-	%			(123	)			(269	)%
Income Tax (Expense)			-				-	%			1				0	%
Net Loss		$	(76	)			-	%		$	(124	)			(269	)%

Six Months Ended June 30, 2025, Compared to Six Months Ended June 30, 2024
(In Thousands)
		June 30, 2025								June 30, 2024
		Dollars				% of Revenue				Dollars				% of Revenue
Revenues, net		$	-				-	%		$	143				100	%
Cost of sales			-				-	%			38				27	%
Gross Profit			-				-	%			105				73	%
Operating Expenses			177				-	%			432				302	%
Operating Loss			(177	)			-	%			(326	)			(228	)%
Total Other Income (Expense)			(10	)			-	%			(59	)			(41	)%
Loss Before Tax Benefit			(187	)			-	%			(385	)			(269	)%
Income Tax (Expense)			-				-	%			1				0	%
Net Loss		$	(187	)			-	%		$	(386	)			(269	)%

Net Revenues

There were no revenues for the six months ended June 30, 2025, a 100% from $143,268 in the same period 2024, as the Company did not have an operating product line during the six month period ended June 30, 2025.

The following tables disaggregates revenue by geographic area:

		For the Three Months Ended June 30,								For the Three Months Ended June 30,
		2025								2024
		Revenues				% of Total Revenue				Revenues				% of Total Revenue
Lighting Products- US		$	-				-	%		$	57,829				42	%
Smart Mirror Products- U.S.			-				-	%			79,990				58	%
Total Revenue		$	-				-	%		$	137,818				100	%

		For the Six Months Ended June 30,								For the Six Months Ended June 30,
		2025								2024
		Revenues				% of Total Revenue				Revenues				% of Total Revenue
Lighting Products- US		$	-				-	%		$	57,829				40	%
Smart Mirror Products- U.S.			-				-	%			85,439				60	%
Total Revenue		$	-				-	%		$	143,268				100	%

Gross Profit and Cost of Sales

Gross profit for the three months ended June 30, 2025, and 2024, was $0 and $99,799 respectively as the Company did not have a revenue generating product line as of the period ended June 30, 2025. Gross Profit as a percent of revenue was 0% in the three months ended June 30, 2025 as compared to 70% in the same period of 2024.

Gross profit for the six months ended June 30, 2025, and 2024, was approximately $0 and $105,249, respectively, a decrease of $105,249 from the previous year, as the Company did not have a revenue generating product line as of the period ended June 30, 2025. Gross Profit as a percent of revenue was 0% in the six months ended June 30, 2025 as compared to 73% in the same period of 2024.

Operating Expenses and Other Income (Expenses)

The Company made concerted efforts to reduce operating expenses during 2025 as the Company did not have a revenue generating product line during the six month period ended June 30, 2025.

Sales and Marketing Expenses

For the three months ended June 30, 2025, and 2024, sales and marketing expenses were $0 and $7,812 respectively.

For the six months ended June 30, 2025, and 2024, sales and marketing expenses were $0 and $17,403, respectively, a decrease of $17,400 or 100%, as the Company did not have a revenue generating product line as of the period ended June 30, 2025.

Compensation Expenses

For the three months ended June 30, 2025, and 2024, compensation expenses were $0 and $70,460, respectively.

For the six months ended June 30, 2025, and 2024, compensation expenses were $0 and $153,400 respectively. The company ceased salary deferrals effective June 30, 2024.

Professional Fees

For the three months ended June 30, 2025, and 2024, professional fees were approximately $43,000 and $77,000 respectively, a decrease of $35,000 or 45%.

For the six months ended June 30, 2025, and 2024, professional fees were approximately $120,900 and $194,400 respectively, a decrease of $73,500 or 61%. The Company was cognizant to reduce expenses as a result of not having a revenue generating product line as of the period ended June 30, 2025.

Product Development Expenses

For the three months ended June 30, 2025, product development expenses were $0 as compared to $1,903 in 2024.

For the six months ended June 30, 2025, product development expenses were $125 as compared to $1,903 in 2024.

Other General and Administrative Expenses

For the three months ended June 30, 2025, other general and administrative expenses were approximately $28,000 as compared to $36,000 in 2024 for a reduction of $8,000 or 36%.

For the six months ended June 30, 2025, other general and administrative expenses were approximately $56,200 as compared to $64,400 in 2024 for a reduction of $8,000 of 15%. The Company was cognizant to reduce expenses as a result of not having a revenue generating product line as of the period ended June 30, 2025.

Total Operating Expenses

For the three months ended June 30, 2025, and 2024, total operating expenses were approximately $70,000 and $193,000, respectively, a decrease of approximately $123,000 or 46%.

For the six months ended June 30, 2025 and 2024, total operating expenses were approximately $177,200 and $431,600, respectively, a decrease of approximately $254,400 or 144%.

Operating Loss

For the three months ended June 30, 2025 and 2024, the operating loss was approximately $70,000 and $93,000, respectively, a decreased in loss of $23,000 or 25%.

For the six months ended June 30, 2025, and 2024, the operating loss was approximately $177,200 and $326,300, respectively, a decrease in loss of approximately $149,100 or 84%. Company was cognizant to reduce expenses as a result of not having a revenue generating product line as of the period ended June 30, 2025.

Total Other Income (Expense), net

For the three months ended June 30, 2025, and 2024, other income (expense) was ($6,000), net as compared to ($30,000) for 2024.

For the six months ended June 30, 2025, and 2024, other income (expense) was ($10,400), net as compared to ($59,000) for 2024.

Net Loss

For the three months ended June 30, 2025 the net loss was approximately $77,000 compared to a net loss of $123,000 in the same period 2024, a decreased loss of $47,000 or 38%.

For the six months ended June 30, 2025, and 2024, the net loss was approximately $187,600 compared to a net loss of $386,300 in the same period 2024, a decreased loss of $198,700 or 106%.

Off-Balance Sheet Arrangements

The Company does not have material off-balance sheet arrangements that have or are reasonably likely to have a material future effect on our results of operations or financial condition.

Contractual Obligations

There were no material changes to contractual obligations for the six months ended June 30, 2025.

Cash Flow

Cash flow from operations are primarily dependent on our net income adjusted for non-cash expenses and the timing of payments to suppliers. Cash as of June 30, 2025, and December 31, 2024, was approximately $42,000 and $16,000 respectively, an increase of approximately $26,000.

Summary of Cash Flows		For the Six Months ended June 30,
		2025				2024
(In thousands)
Net cash used in:
Operating Activities		$	(157	)		$	(110	)
Financing Activities			183				90
Net decrease in cash		$	26			$	(20	)

As of June 30, 2025, the Company's working capital deficit was approximately $325,000. Current assets were approximately $54,000 and current liabilities were approximately $379,000 and include:

●	Accounts payable of $5,711.
●	Note payable related parties of $361,500 with accrued interest of approximately $12,000.

Cash Flows used in Operating Activities

Cash used in operating activities in the nine months ended June 30, 2025, and 2024 was approximately $156,600 and $109,800, respectively, a decrease of $46,800 compared to last year.

Cash Flows provided by Financing Activities

Cash provided by financing activities for the six months ended June 30, 2025 and 2024, was approximately $182,500 and $90,000, respectively.

As of June 30, 2025, and December 31, 2024, the Company had outstanding notes payable $374,000 and $181,000 which includes accrued interest of $12,000 and $2,000, respectively.

Directors and Officers Insurance

The Company currently has Directors and Officers liability insurance, and the Company believes the coverage is adequate to cover likely liabilities under such a policy.

Exchange Rates

We sell all of our products in U.S. dollars and pay for all of our manufacturing costs in U.S. dollars.

Country Risks: Changes in foreign, cultural, political, and financial market conditions could impair the Company's international manufacturing operations and financial performance.

Currency: Currency fluctuations could significantly increase our expenses during periods when we produced and sold consumer products and could affect the results of operations, especially where the currency is subject to intense political and other outside pressures.

Interest Rate Risk: The Company does not have significant interest rate risk during the six-month period ended June 30, 2025. All outstanding loans have been disclosed including the agreed interest rates.

Credit Risk: The Company has not experienced significant credit risk.