NOTES PAYABLE TO RELATED AND UNRELATED PARTIES

3 Months Ended

Mar. 31, 2025

Debt Disclosure [Abstract]

NOTES PAYABLE TO RELATED AND UNRELATED PARTIES

NOTE 3 – NOTES PAYABLE TO RELATED AND UNRELATED PARTIES

Purchase Funding Agreement with Directors and Unrelated Party

On July 2, 2021, the Board of Directors (“Board”) resolved that the Company required a purchase order funding facility to procure additional inventory to support the online Smart Mirror business. The Board resolved that certain Directors could negotiate the terms of a Purchase Order Funding Agreement for up to $1,020,000 with Directors S. Wallach and J. Postal and E. Fleisig, a natural person who was not affiliated with the Company. This agreement was finalized on October 18, 2021, and the Company received the funding of $1,020,000 on October 18, 2021 with an original maturity of April 2023 which was extended through November 30, 2024. Under this agreement the interest terms are 5% based on a 365- day year. See cancellation agreement below.

Working Capital Loan with Directors and Unrelated Party

On May 1, 2022, the Company negotiated three $200,000 working capital funding agreements, to provide $600,000 in funding for daily operations. The Board resolved that certain Directors could negotiate the terms of a Working Capital Funding Agreement for up to a total of $600,000, with Directors S. Wallach (through Group Nexus, a company controlled by Mr. Wallach) and J. Postal and M. Khoury, a natural person. Under these agreements the interest terms are 5% based on a 365-day year, amended to mature November 30, 2024, for J. Postal and S. Wallach. The $200,000 note payable held by M. Khoury matured November 1, 2024 and was not amended. On December 9, 2024, the Unrelated Party note with M. Khoury was purchased by Directors S. Wallach and J. Postal. In accordance with the purchase agreement, S. Wallach and J. Postal assumed the $200,000 note payable owed to M. Khoury. See cancellation agreement below.

On October 13, 2022, the Company negotiated a $50,000 Working Capital Funding agreement with Jeffrey Postal, a director, to provide funding for daily operations. The initial term of this agreement was 18 months and amended to mature November 30, 2024. Principal accrues simple interest at a rate of 5 percent per annum. See cancellation agreement below.

On December 1, 2022, the Company negotiated a $50,000 Working Capital Funding agreement with Jeffrey Postal, a director, to provide funding for daily operations. The term of this agreement was for 18 months and was amended to mature November 30, 2024. Principal accrues simple interest at a rate of 5 percent per annum. See cancellation agreement below.

On January 3, 2023, the Company negotiated a $40,000 Working Capital Funding agreement with Director S. Wallach (through Group Nexus, a company controlled by Mr. Wallach), to provide funding for daily operations. Principal accrues simple interest at a rate of 5 percent per annum, amended to mature November 30, 2024. See cancellation agreement below.

On March 27, 2023, the Company negotiated a Working Capital Funding agreement with Director S. Wallach to provide funding for daily operations. Total funding under the agreement amounted to $632,500 as of December 31, 2024. Principal accrues simple interest at a rate of 5 percent per annum, amended to mature November 30, 2024. See cancellation agreement below.

On January 16, 2024, the Company negotiated a Working Capital Funding agreement with Director Jeffrey Postal to provide $50,000 in funding for daily operations. Principal accrues simple interest at a rate of 5 percent per annum, amended to mature November 30, 2024. See cancellation agreement below.

On October 31, 2024, the Company executed an unsecured promissory note with a then unrelated party, Coppermine Ventures, LLC (“Coppermine”), to provide $125,914 in working capital funding for daily operations. Principal accrues simple interest at a rate of 7 percent per annum, maturing July 31, 2025. On November 26, 2024, Coppermine provided an additional $53,018 in working capital funding for daily operations. On February 3, 2025, Coppermine provided an additional $111,363 in working capital for daily operations. See Note 7 - Subsequent Events.

On December 4, 2024, the CEO of Coppermine Ventures, Alexander Jacobs, was appointed as CEO and Director of Capstone Companies, Inc. with former CEO Stewart Wallach resigning and remaining as Capstone Companies, Inc Chair of the Board of Directors.

On December 18, 2024, the Company’s Board of Directors approved the cancellation of the aforementioned notes payable, with the exception of the Coppermine Ventures promissory note, in exchange for shares of Series B-1 Convertible Preferred Stock (“B-1 Stock”) of the Company, calculated at a price of $0.07 per share (“the Exchange Price”). The B-1 preferred stock is convertible into common shares, at a rate of 66.66 of common stock for each share of B-1 convertible preferred stock. Each aforementioned note holder executed the cancellation agreement and received their pro-rata B-1 Stock in accordance with the Exchange Price. A total of 750,075 B-1 Stock was issued for cancellation of $3,665,303 in principal and accrued interest, inclusive of deferred salary and consulting wages for Stewart Wallach and George Wolf, respectively, as reflected in the table below. As the cancellation of debt was agreed upon by existing equity holders and related parties, the Company recorded the cancellation as a capital transaction and recorded in the statement of stockholder’s deficit as of December 31, 2024. The shares of B-1 Stock were issued in reliance on an exemption from registration under Section 4(a)(2) and Rule 506(b) under the Securities Act of 1933. See Note 5 - Stock Transactions.

As of March 31, 2025 and December 31, 2024, the Company had a total of $290,295 and $178,932, respectively of outstanding principal, on the above referenced funding agreements, and accrued interest of $6,113 and $1,829, respectively. The outstanding principal balances and accrued interest has been presented on the condensed and consolidated balance sheet as follows:

		Notes Payable
		March 31, 2025			December 31, 2024
Current portion of notes payable and accrued interest, related parties	$	296,408		$	180,760
Total notes payable principal and accrued interest		296,408			180,760
Less accrued interest		(6,113	)		(1,829	)
Total notes payable	$	290,295		$	178,931